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Telecom revolution: voice over Internet is making the technology of the last 130 years obsolete.

YOU'VE ALWAYS WANTED a phone system that is reliable, shuttles your customers efficiently to their destination and grows easily as you grow. Increasingly, you also want a communications system that seamlessly follows you wherever you go, economically piggybacks on your data lines, and can do neat things like turning your emails into voice messages for your convenience.

Two radical things have happened in the telecom world recently, says Bill Dugdale, chairman of Dugdale Communications, Indianapolis. "The first one is the whole economic climate in the last four to five years. It's the closest thing to a Depression in the telecom industry." That resulted in major decreases in revenues for some companies and a shakeout in providers. The second is the technology itself. When changes occurred in the past, they were incremental, he says, hut voice over Internet protocol (Vole or simply IP telephony) is making the technology of the last 130 years obsolete.

Founded nearly 20 years ago, Dugdale Communications is a regional interconnect company, meaning it installs and supports telephone systems for business customers. After weathering the economic storm. "It's a good time to be in the IP telephony business," says Dugdale.

Voice over Internet According to a Deloitte research study, the vast majority of voice calls this year will still originate and terminate on the traditional public switched telephony network due to superior call quality and overall reliability, but those operators will reduce prices due to competition from low-cost mobile and VoIP providers. Shortfalls in VoIP's quality, consistency and reliability, it says, will lead to many companies using a hybrid approach, VoIP for internal communications and traditional service for external traffic.

The telephone system is now an enterprise software application, says Dugdale, "rather than a hunk of iron in the closet."

While its new system sales are about 75 percent to 80 percent IP telephony, Dugdale says switching over traditional phone users completely will happen gradually over the next eight to 10 years. Most add IP at a new office location while retaining a current phone system.

Telephony trends Key VoIP trends and companies to watch in 2005 are listed at, sponsored by PricewaterhouseCoopers. Traditional phone service providers will begin to swallow up small VoIP service providers, it says; VoIP is beginning to transition from a mere telephone technology into a multimedia service that provides CD-quality audio, full-motion video and other multimedia communications services; voice over WiFi networks is VoIP's next frontier, competing with wireless providers; Spam over Internet Telephony (SPIT) will surface; call centers will potentially be a major market for VoIP service providers; and security problems, which it calls VoIP's greatest weakness, are lurking.

Just how real are the security concerns for both privacy and total system meltdowns with VoIP? You might have a problem with a low-end Tonka toy, says Dugdale, but "pretty much all the high-end contenders have high levels of redundancy, resiliency and survivability" The servers you bring in for IP, he says, have no more or less of a security problem than the servers used for email or enterprise applications.

Regarding the trend of using VoIP in call centers, there's probably no company poised to benefit more than software company Interactive Intelligence, headquartered in Indianapolis. Its 3-year-old subsidiary, Vonexus, uses all-software IP telephony combined with Interactive Intelligence's call-center technology to bring voice and data together for small- to medium-sized businesses in its Enterprise Interaction Center. It provides a single, pre-integrated phone and communications platform to manage calls, voice mails, emails, faxes and Web contacts, along with an open architecture that easily integrates Microsoft Business Solutions and other desktop applications to manage data. Want more services? Add applications, not hardware.

One of the first decision points a company has to make is whether they want to go with a traditional phone system with separate lines that run to the desk, or VoIP where voice traffic runs right over the data network, says Interactive Intelligence founder, chairman and CEO Don Brown. "We'll see the old phone systems out there for many years to come. But at least 50 percent of new phone systems being installed are voice over IP In a couple years it will be rare to see anything but VoIP for new systems."

One advantage of VoIP is its flexibility and ease of use. If an employee switched locations under an old system, you called the company that put it in and reassigned the extension, says Brown. "With VoIP, you go into a graphical screen and say, I'm moving someone from one location to another."

Twenty years ago, hardly anyone had email, then it was available at work, now you can access it anywhere from your cell phone or Blackberry. "IP is taking things down the same path," says Brown. The mobility of VoIP is a major advantage. "Once you get the voice traffic on the network, it doesn't matter where you are anymore."

He uses his own experience to illustrate the IP possibilities. From his laptop at an airport in Europe he can get calls, view caller ID, see who's in the office and conference them in, and dick a button to record the call and route it on. "It's those sorts of rich applications that make VoIP so valuable."
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Author:McKimmie, Kathy
Publication:Indiana Business Magazine
Date:Sep 1, 2005
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