VoIP Begins Application 'Revolution'

VoIP got its foot in the enterprise door by offering substantial savings on the monthly phone bill. As the technology matures, it's the application capabilities that are driving sales.

By Ed Sutherland | Posted Apr 28, 2005
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VoIP first appeared on the radar of many enterprises as a way to save money by routing telephone calls through the Internet instead of convential phone connections. Now—in what some describe as a revolution and others simple evolutionary change -- VoIP is reaching beyond providing cheap phone calls to enhancing some of the most common enterprise applications.

While predicting VoIP will reach 27 million U.S. subscribers by 2009, IDT senior analyst William Stofega warned IP telephony "must prove that it is more than just a cheap replacement for POTs (Plain Old Telephone) service."

"Enterprises have become comfortable with VoIP," says Keith Nissen, senior analyst at Instat/MDR. Nissen says now that enterprises recognize what VoIP is, they want to know what IP telephony can accomplish.

For enterprises, the "focus will be shifting from 'what is it' to 'what's the benefit for me'," says Nissen.

Savings no longer VoIP's top draw Adopting VoIP as a way simply to save money for a company is so 2004, says Victoria Desidero, Vice President of Marketing at NetFabric. "Cost-saving has become less of a differentiator," says Desidero. Connecticut-based NetFabric produces what it calls Intelligent Call Directors which connect to a PBX allowing an enterprise to make telephone calls over an IP connection or the PSTN.

While cost-savings from IP-routed phone calls may have gotten enterprise customers 'in the door' and interested in VoIP, "over time they are interested in applications," according to Desidero.

Although the possibilities are "pretty much endless" of how VoIP applications or services enhance an enterprise, IP-enabled apps fall into three broad categories, according to Desidero: efficiency, cost-saving and customer service.

The top three VoIP application types are: integrating with core office tools, such as Microsoft Outlook and Internet Explorer, call center-related functions, and improved voice recognition.

VoIP's killer app
NetFabric's FUS1ON call controller lets customers dump call information into Microsoft Outlook. But the NetFabric executive says the ability of its software to automatically check outgoing calls against an online do-not-call list is a "critical VoIP application."

Scott Wharton, Vice President of Marketing at VoIP application developer BroadSoft, had a front seat overlooking the growth of IP telephony. Prior to BroadSoft, when Wharton was the VP of Marketing at VocalTec, he assisted with the first IP telephony product.

"You're finally seeing end-user applications driving the VoIP market," says Wharton. Wharton considers the introduction of VoIP into the enterprise equivalent to the migration from DOS to Windows. "VoIP is becoming like Webhosting and e-mail" in its ease and options, says Wharton.

"It's not about cost anymore—it's about leveraging broadband," according to Wharton. "You need more apps to go over it."

Among those applications is a click-to-dial toolbar BroadSoft's BroadWorks puts in Microsoft Outlook and Internet Explorer. By right-clicking on a name, contact information is brought up, including phone number.

Too many telephone numbers
"The problem with telephony is we have more telephone numbers," argues Wharton. VoIP's features must be easier to understand, he says.

"The challenge now is how to present this stuff," Wharton believes. While Wharton thinks multimedia telephony containing video messages for customer service workers is part of VoIP's future, he believes users face a steep learning curve. A similar challenge faced Sony when it had to convince consumers why they would want to walk around with a tape player.

Analyst firm Frost & Sullivan estimates the number of VoIP services used by businesses this year will almost triple. In the remainder of this series, we'll look at some of the most intriguing VoIP applications for the enterprise, including conference calls that transcribe themselves and databases you can search by voice.

"There will be a revolution," says BroadSoft's Wharton.

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