Talk Is Cheap

...or, Why Your Next Phone System Will Be VoIP We take a look at the good, the bad, and the future of Voice over IP systems, and provide a guide to vendors.

By Eileen Calabro | Posted Jan 11, 2002
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Once a novelty used by individuals for circumventing pricey long-distance carriers, Voice-over-IP (VoIP) has finally found its niche as an inexpensive and flexible telephony solution for the enterprise.

VoIP breaks down voice signals into digital packets, allowing it to be transmitted via IP, avoid the public switched telephone network (PTSN), and use advanced call features such as call conferencing, call forwarding, unified messaging, and voicemail. Corporations can take advantage of the technology by purchasing a gateway that routes voice packets to other parts of the network or sends them over the PTSN. Some gateways work using existing PBX equipment, while others work on their own or with a Win NT backbone.

The technology is sound on paper, but many corporations have been slow to install VoIP solutions. All that is expected to change in coming years as the price of gateways and other costs come down and as quality of service improves. An industry survey conducted by Frost and Sullivan of San Jose concluded that VoIP sales are expected to climb to $349 billion by 2006.

The Good
VoIP's growing popularity is no surprise. The advantages of VoIP over traditional PBX are numerous. For one, the lifetime cost of a VoIP solution is a fraction of what you would pay for a traditional phone system. By bypassing the PTSN for long-distance calls and fax, the per-minute rate for both services can drop to as low as two or three cents per minute. VoIP can also utilize existing network and PBX equipment, thereby cutting down on installation and day-to-day operational costs. And while the initial investment may be pricey, users can see savings almost immediately, particularly if they are building their VoIP network from the ground up or are an international firm, according to Doug Fink, director of voice solutions for Calence, a Tempe, Arizona-based network solutions provider that both installs and uses VoIP solutions. "A typical installation with under 200 phones runs about $50,000 for hardware and $30,000 for implementation services, and maintenance runs just a couple of thousand versus $50,000 for a PBX," Fink says.

Streamlined management is also a realistic expectation with VoIP. Network managers, already familiar with IP, SNMP management, and the network backbone, can be trained to work with VoIP. Directory and security services can be shared and standard protocols (HTML, Java, XML, H.323, MGCP, and SIP) are used.

VoIPs flexibility should not be ignored. The enterprise has many architectural choices, including upgrades from traditional PBXs, brand-new IP gateways, and outsourced VoIP services, especially popular among smaller companies that want the same call features without the initial investment or day-to-day management. There is also geographical flexibility -- since all your phones can be connected via IP, you can give even remote locations the same advanced call features as your main office.

The final boon is the potential for new applications, something it does not share with traditional phone service. It is expected that VoIP will grow from a phone and fax solution to a multimedia service, creating voice-enabled Web sites and single-area storage and retrieval for voicemail and e-mail.

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