Technology catches up with the VoIP hype

There has been renewed interest in voice over IP telephone systems as falling prices and increasing functionality make it a...

There has been renewed interest in voice over IP telephone systems as falling prices and increasing functionality make it a viable proposition for most users

Lan-based voice over IP has been around for 10 years, yet to date, take-up has been far more restricted than early industry forecasts would have had users believe.

Now, just as everything seemed to be going quiet, everyone is talking about VoIP again, as though it is the latest, greatest new kid on the IP services block.

At the Netevents industry symposium in Spain this month, dedicated sessions were given over to the topic for the first time in years. VoIP supplier Zultys said the reason for this is that the technology has progressed to the point where it is now an economically viable solution for the vast majority of businesses, and call costs between VoIP handsets are free with the right system.

"Only low-end key systems will remain for those companies that simply want a basic phone service at the lowest possible cost. For any other business, deploying a legacy PBX [private branch exchange] or a hybrid PBX is a crazy choice compared with deploying a true IP PBX," said Justine Cross, director of business development at Zultys.

At the heart of Zultys' belief is its feature set, which is a big departure from those of the products Broadband-Testing has assessed, as is its scalability.

For example, Zultys' MX1200 VoIP "media exchange" supports between 25 and 1,200 users and has a rich set of features - some standard, others optional - which are expandable in capacity and function without the need to purchase additional hardware. So no "forklift" upgrades are required, unlike many times in the past. Given the importance of ease of deployment, management and long-term return on investment, this approach bodes well for the development of VoIP.

Cisco too is bringing more to the VoIP party with a range of integrated service routers that includes IP telephony, voice, mail and auto attendant functionality. The company said its sales figures show how the technology is moving. It took Cisco three and a half years to sell its first million IP telephones but only 12 months to sell its next million.

"Cisco is replacing more than 6,000 traditional phones with IP phones every day," said Tim Stone, Cisco's head of marketing for IP communications. In Europe alone he said Cisco had shipped more than 450,000 IP phones in the past 12 months.

Stone cited three factors that are allowing VoIP to proliferate: deregulation in the telecoms market; technology readiness, or the improvement in quality of voice services to that of traditional phone networks; and financial incentives such as operating costs savings through voice and data convergence, simpler management and faster configuration.

"Enterprises migrating to Multi-protocol Label Switching virtual private networks are seeing the addition of IP telephony as a natural value-add. By the end of this decade, virtually all calls will run over an IP network at some point," said Stone.

But is there any justification in this new wave of optimism from the VoIP suppliers? According to Gartner's Ian Keene, the answer is, "Approach 2005 with guarded optimism."

In other words, the signs are right for VoIP, but users should not get carried away beyond what is realistically achievable. Time- scales will still be lengthy for mass uptake across all wired and wireless Lan and Wan options.

Keene pointed to the uptake of "IP-enabled" PBXs installed on traditional lines, which make up 55% of total shipments to date in 2004, whereas IP-enabled PBXs installed on an IP line is only 7%, likewise for pure networked IP products.

Tellingly, the traditional PBX installed on a traditional line still accounted for 32% of worldwide deployments this year. But a VoIP product supplier would argue that this still means that a whopping 68% are at the very least IP-enabled. The problem is how long it will take to change from enabled standby status to actually operating over IP.

Once installed, there is also the time span over which IP phones will be used to perform real IP applications, rather than simple telephone service functions, to take into consideration. Again, according to Keene, this will be a steady rather than spectacular process of deployment.

Keene said the first wave of applications are being deployed on the basis of obvious cost savings. These are functions such as the IP-PBX itself, basic call functions, branch office installations and toll-bypass.

Over the next two years, Gartner said more advanced call centre functions will be deployed, along with messaging, administration and reporting tools. During the second half of the decade, Gartner expects to see the onset of unified communications - the unified inbox - and application integration. By 2008, Gartner said that about 41% of "handset" equivalents will be IP devices, compared to about 5% today.

What does seem certain is that technology has moved on sufficiently to make VoIP an affordable proposition for a business, with an easily calculable return on investment.

Where the questions still lie are in the area of interoperability between different VoIP product suppliers - notably Session Initiation Protocol (SIP) versus proprietary mechanisms.

SIP is a signaling protocol for internet conferencing, telephony, presence, events notification and instant messaging. Developed by the Internet Engineering Task Force, it has been adopted by several VoIP suppliers, which will aid interoperability between multi-supplier connections in the future.

SIP compliance is seen by many as key to the advancement of the VoIP market and real integration between the different suppliers.

The adoption of VoIP in the enterprise will be driven by the availability of products that offer advanced functionality and interoperability with any IP system or platform, said Brian Strachman, senior analyst with In-Stat/MDR.

He said that as SIP becomes the standard of choice for enterprise VoIP applications, products that combine data handling capabilities, security, ease of use and SIP-compliance will not only win out, but perhaps lead the adoption of VoIP.

Zultys and other supplies are banking on SIP as the winner. This opinion is substantiated by analysts such as Burton Group, which said SIP is the key to truly open IP telephony, the problem to date being that there have been very few products available for businesses.

So are there any other barriers to widespread VoIP? Bert Whyte, president and chief executive of multi-service product supplier Net, said, "There is going to be a whole new wave of VoIP security that will have to be embedded."

Whyte said the real savings with VoIP will happen as the enterprise hits the Wan over the next two years.

Zultys' chief executive Iain Milnes said the biggest application is to implement VoIP within the business. A firm can get more than just a telephony system, it can get collaborative calls, special call handling rules, integration with e-mail applications such as Outlook and unified messaging.

"It is these intangible benefits that will increase productivity," said Milnes.

Steve Broadhead, Broadband-Testing 

Steve Broadhead runs Broadband-Testing Labs, a spin-off from independent test organisation the NSS Group.  

Author of DSL and Metro Ethernet reports, Broadhead is now involved in a number of projects in the broadband, mobile, network management and wireless Lan areas, from product testing to service design and implementation.

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