Enterprise VoIP Adoption? Gradual but Rapid, Say Experts

The one thing we can say with certainty about enterprise adoption of VoIP is that there is no consensus. Many take a cautious, toe-in-the-water approach, yet pressures for migration are increasing.

By Ed Sutherland | Posted Mar 28, 2005
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As an increasing number of enterprises investigate VoIP to combat rising telecommunications costs, migration to IP telephony will not be a wholesale swap of current PBX installations, say some experts. Rather, VoIP's appearance in enterprises will be a gradual transition.

Introduction of VoIP in enterprises typically happens in stages, according to ABI Research analyst Michael Arden. "Often, enterprises begin by putting in one IP PBX," says Arden. If all goes well, expansion or total conversion may follow.

Enterprises considering integrating VoIP support with their existing PBX or Centrex communications face a variety of issues connected with the transition to IP telephony.

Memories of Y2K
Remember Y2K? Many enterprises confronted with the specter of systems possibly going haywire over the new millennium did forklift upgrades. Will those companies easily embrace another round of major network upgrade—this time for VoIP?

Decisions on when or whether to invest in VoIP will in many cases be made with reference to how much the company spent for Y2K, says Arden. "A lot of companies put in new equipment for the event," says Arden. "Those are the guys who are hesitating," says the analyst.

While all companies have the eventual goal of being all IP—and Arden says companies with all-IP installations are seeing significant savings—enterprises don't get much savings from gradual migration, Arden believes. Furthermore, while large enterprises moving to VoIP are capturing the headlines, "smaller companies are actually more ready for VoIP," says the analyst.

Deciding factors
How does a company decide when it is best to integrate VoIP into their legacy infrastructure? To help tailor the decision to specific scenarios, Arden created a database of fictitious companies. Included are "differing characteristics such as the number of extensions and remote offices, desired phone system features, and brand allegiance," said Arden. A company's level of technical expertise is also included in the equation.

Enforcing Arden's view of the importance of integrating VoIP with legacy gear is the report from In-Stat/MDR analyst Daryl Schoolar. While noting the percentage of companies using VoIP grew from 3 percent in 2003 to 12 percent in 2004, Schoolar said most companies will still rely on "a mix of voice technologies" rather than depending solely on VoIP.

The most common way enterprises ease into VoIP is by installing an IP PBX instead of an outsourced IP Centrex.

A side-effect of companies migrating to VoIP is the changing way traditional IP providers must handle customers. Each installation requires a certain amount of customization," said Schoolar. "For service providers this requires a more consultative customer approach than what they were used to with traditional services."

Although significant numbers of companies "aren't sure they can trust the quality" of VoIP, "soon there will be no choice" but to migrate," says Arden.

Mixed signals
A survey by VoIP testing company Empirix of those attending two recent VoIP conferences found while only 2 percent of those responding don't plan to deploy VoIP, two out of three said they are concerned about putting a VoIP phone on the CEO's desk.

Yet Michael Osterman of Osterman Research—echoing Arden's contention that the days of choice may be drawing to a close—feels VoIP is on the cusp of large-scale acceptance and government regulation.

Osterman believes 2005 and 2006 will see major VoIP rollouts. Government regulation of VoIP could silence VoIP's initial driving forces—lower costs. As the cost saving element diminishes, Osterman sees integration becoming the major advantage of enterprise VoIP.

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