Voice over IP: Small firms go first

Small businesses are leading VoIP adoption as they find it can cut costs to levels previously only enjoyed by corporates with the...

The cost proposition for VoIP is certainly appealing: do away with a dedicated voice network and instead convert voice to IP telephony and send it over one, integrated data network. As well as reducing infrastructure and maintenance costs - by up to 50%, say the optimists - there is an opportunity to make voice part of a multimedia experience that can transform business applications.

However, a survey by management consultancy Deloitte suggests that most corporations that have adopted IP telephony still have some reservations about its readiness for the corporate world. Just 26% of respondents already use VoIP all the way to the desktop and only one-third of those have deployed across the enterprise.

"There is still a substantial degree of caution. Most VoIP implementations have been limited in scope - in some cases restricted to a few dozen lines out of tens of thousands - with most VoIP adopters still relying on traditional analogue systems for an overwhelming majority of their phone connections," says the report. A key reason for reluctance so far is that the cost benefits so widely touted do not apply to vast corporations with buying clout.

"Companies with tens of thousands of employees discount the price arguments because they already have very good negotiating capability," explains Paul Lee, telecoms and technology director at Deloitte Research. Two companies surveyed had returned to the old public switched telephone network (PSTN) for price reasons, he says, and another discovered it had to retain analogue lines for fax and alarm. "This materialised after the VoiP went in and it cancelled out any cost savings."

Although the cost savings on tariffs have not convinced large companies to tear out their PBXs and replace them with IP systems, they are proving attractive to smaller firms. Companies that do not upgrade their own private networks are in the fortunate position of being able to buy and install a hosted VoIP service from a carrier very easily.

Small companies can have IP telephony without having to invest in their own PBX infrastructure or do any extra wiring. "All they need is a broadband connection and IP phones coming off the local Lan," says Eli Katz, chief executive of VoIP network specialist XConnect. With IP telephony services retailing for as little as £30 a month, it is small wonder that this end of the market has embraced VoIP so warmly, with an estimated 30 million users worldwide already.

Large companies that are not convinced they can save on tariffs are more likely to be attracted by the cheaper maintenance of VoIP. Traditional telephony calls for a PBX per site and this adds up once support, application integration and licensing overheads are factored in. In a distributed IP environment, it is possible to have one centralised IP PBX, with distributed gateways at remote sites. "With one PBX to administer, support, license and integrate applications to, it dramatically reduces overheads of multi-site voice communications," says Roger Jones, business development director EMEA at VoIP provider Avaya.

Companies tempted by the cheaper maintenance of VoIP or because they do not have a big capital expenditure burden, have the opportunity to sample the myriad features and data integration possibilities.

A big advantage is flexibility - users can access their phones from their client device wherever they are, with a set of headphones. Changing premises or opening new offices in the North East of England no longer means pulling out the telephone systems. "It really is just a case of unhooking the cable and relocating your PC," says John Sushames, data and communications director at Zodiac Training.

The training company, which operates in the North East, selected its VoIP supplier because it offered the facility to record interviews. Zodiac burns these telephone interview recording files onto CDs and offers them as a value-added product to customers. "It was the key driver in our selection and was included as a standard feature at no additional cost," explains Sushames.

Colin Curtis, research and development manager at VoIP supplier Xpert, says, "The telephone on the desk is no longer just a telephone. It becomes a device to read e-mail and access other office applications too." Schools are starting to use IP phones to help cut absenteeism. Teachers can take the register with the phone, which then performs an automated tally with a database. Parents whose children may be playing truant receive an SMS alert.

The IP voice phone handset clearly has an appeal for any satellite or field worker, but adding yet another access device to workers' armoury of IT tools may not appeal to the average company. "I have seen many fully featured phone sets go in and not get exploited," says Lee, although he points out that normal feature phone functions can be squandered just as easily.

For most companies, the biggest benefit is being able to merge voice into one giant multimedia network. "VoIP touches everything," says Rob Powell, consultancy practice technical leader at Computacenter. "It is more than a voice and data network - it becomes an enabling platform where any IP application can be delivered to any end device."

The most talked-about application that VoIP brings to life is the call centre, because operators can view customer data that is invoked as soon as the incoming call is received. Access to relevant data gives operators the capacity to deal with calls more efficiently. But the bigger advantage is the ability to distribute and manage voice so that the call centre no longer has to be treated as one physical location.

This has positive implications for any organisations with a serious customer service function. Many banks choose to include local branches as extra resources during peak times. Similarly, pure call centre businesses can offer teleworking as an option to their staff, keeping them in line with legislation on flexible working and reducing costs.

But treating voice as another application on one integrated network, although tremendously attractive from a price and productivity viewpoint, instantly introduces risk. "The minute telephony is part of the Lan, it become susceptible to denial of service attacks," says Katz, co-founder of the Internet Telephony Service Providers Association (ITSPA). "The kind of things that have to be considered for the corporate Wan have to be applied to IP voice too."

Katz names three kinds of threats: hacking, such as denial of service; theft of IP - call could be hijacked and outbound calls made to satellites; and interception or spying on calls. While the VoIP is part of the internal network, it can be addressed by using the same methods as on the Lan. "Firewalls and filtering technology have to be applied to routers too," he says.

But once you go beyond your own IP island and into the wider IP world, Katz warns, "It is like the Wild West. The big problem is that without the facility to monitor borders, you have no idea whether a caller's ID is true. In the traditional world, you have absolute traceability of a caller - it is not something that can easily be spoofed."

Lack of traceability makes spam over internet telephony (Spit) a real concern. It is estimated that 97% of all e-mail travelling over the web is spam. If this volume is matched in telephony applications with cold-callers pumping out messages, the consequences are even worse. "When you clean your voice mail, you actually have to listen," says Katz.

Another aspect of network management that has to become more robust is optimisation. Management tends to be a misunderstood art anyway, says Powell, but once VoIP is introduced, IT directors need to be extra vigilant. Steven Wastie, international marketing director at Peribit Networks, says, "There is an immediate impact on the Wan and too much contention for bandwidth can affect the quality of service."

The IT department needs to go through a sizing exercise and divvy up bandwidth among applications, prioritising those that are business critical. Given that delays that exceed 250 milliseconds seriously affect the listeners' ability to hear and conduct conversation, voice has to be protected. "Voice is always going to be critical, but it is really down to what affects revenue the most. With banks, keeping the ATMs going is likely to be the number one contender," says Wastie.

Network optimisation should be undertaken before the introduction of voice, says Wastie, who is frequently called in after the event. "You need to optimise first, because otherwise you may have to go back to the board and ask for extra money for more bandwidth," he says. Compression can reduce the amount of traffic going across the network by between 30% and 70% depending on the type of application, according to Peribit.

Peribit uses a three-step method for optimising traffic:

  • Applications such as Powerpoint amends or database queries that send a huge volume of repeat data are addressed. Stripping out repeat data can reduce traffic by up 70%
  • The VoIP itself can be reduced by 30% by compressing routing information
  • The network manager needs to set parameters for allocating bandwidth to different applications. "You don't need an in-house PhD to do this, it can be done on a management console," says Wastie.

Although SMEs lead the way on VoIP adoption, large enterprises are getting to grips with the long-term advantages of merging voice and data traffic. Deloitte says 14% of its survey respondents are conducting trials and a further 28% are at the evaluation stage. It expects 66% of Fortune 2000 companies to have adopted VoIP partially or wholly by the end of the year.

Given the evidence of maturing protocols to deal with quality of service and security issues, the biggest obstacle to adoption may be internal politics. "Once you shift to VoIP there is a shift in budget and no longer a separation between systems that are supported by separate groups," says Powell. "People are protective of what they do."

Case study: Kent Police emphasises security    

Kent Police began implementing VoIP in 2002 and has linked 40 sites to date, with 10 sites to go.

It selected Cisco PBXs and routers and Computacenter staff to do the design and configuration. 

 "It has increased flexibility, which is particularly important in policing," says Andy Barker, head of information services at Kent Police.

"You need to be able to move people at very short notice. We can now move telephones around without having to reprogram PBXs."  Maintenance costs have been reduced by about 30% - a big saving but not quite in line with earlier expectations.

By maintaining one network instead of two, Kent Police had hoped to halve costs. "In practice we had to optimise the resilience and increase capacity," says Barker. 

He is satisfied that the network is secure and, contrary to concerns in the corporate world about security diminishing, he believes he has been able to secure voice more cheaply. 

"Tapping into POTs [plain old telephone services] was extremely easy unless you took precautions and these were not cheap. IP telephony uses standard encryption - our encrypted pipe is a highly secure link." 

The one remaining problem for Barker and his team is interfacing with the non-VoIP world. "The point at which we intersect is delicate and troublesome," he says.

"We have lost service connections at these points. The problem is that the systems work so differently."   

Read more on Voice networking and VoIP

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.