VoIP Case Study #1

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Voice over Internet Protocol, commonly referred to by the acronym VoIP, is a communications technology originally designed to displace the public switched telephone network. Telephony’s evolution beyond POTS and PBXes has opened a wide spectrum of services able to marry voice and data, of which VoIP is but one.

The primary selling point for this technology is the potential for saving organizations money in toll calls and beyond. But interest extends well beyond that single factor.

“There are customers out there converging their networks and taking advantage of VoIP” says Alan Eng, product manager for the access communications group Cisco Systems, Inc. “Cost saving was the first easy application. The converged solution really addresses that plus, it has improved productivity. And the technology is really evolving.”

Although some pundits would argue that VoIP is still maturing, corporate users are extremely interested in implementing the technology, creating exponential growth. Within the last four years, VoIP minutes increased from less than 0.5 to 2 percent of outbound international calls, according to research from TeleGeography. Additionally, predictions as to the size of the market itself vary, with Allied Business Intelligence projecting the VoIP market to grow from $3.7 billion in 2000 to $12.3 billion in 2006 and Synergy Research Group projecting the VoIP equipment market to grow to $13.3 billion by 2005.

There are many misconceptions about VoIP. It’s not just for mammoth Fortune 500 companies. Governments and non-profit organizations now use these telephony services as are retail establishments like restaurants and car dealerships, even banks.

Eng says some of that misconception can be traced to the high profile, “household names” organizations such as Merrill Lynch and Dow Chemical that were among VoIP’s early users.

“We’ve actually seen activity not only across business sizes, but also across different verticals,” he says. These include education, financial services, insurance, retail and government. “We’ve also seen a lot of activity in the midmarket,” says Eng. “We have a lot of customers in the less than 100 user configurations. All businesses have the same needs. They have different price sensitivities and scalability issues as well as other internal operating guidelines.” The only difference between these different-sized businesses seems to be, Eng says, that larger companies tend to have more resources to deploy VoIP.

What doesn’t change is the cost savings. Less money is spent on equipment — infrastructure, telephones and switches — as well as toll calls. Administrators quickly point out they’re spending less time and money on training as well.

What’s also becoming more apparent is it doesn’t take a complete overhaul to implement VoIP effectively. The City of Daytona is an excellent case in point.

If Gene McWilliams, the City of Daytona, Florida’s manager of information services, isn’t in his office when you phone him, it’s as easy to talk with him as punching “5” on your telephone keypad. There’s no lengthy message with pager and alternate telephone numbers for callers to wait through. That simple gesture links your call to his cellular telephone over the city’s VoIP network.

The system, designed and implemented within the last year, eliminated a hodge-podge of telephone systems at 23 offices throughout the city. “We had been planning to put data in these,” explains McWilliams. “These locations ranged from fire stations throughout the city to two- and three-man offices. We could have either used single line services through OPX — very expensive — or key sets — also very expensive.

The city chose Voice over IP. “It works out to our advantage in that the phones ride free. We already had the data connection. The 23 offices we serviced had incompatible key sets on our central phone switch or were individual one FBs. These gave us none of the features we needed.” With VoIP, he explains, the city was able to centralize and integrate voice and data communication services. They’re enjoying features including the aforementioned digital forwarding and are able to give users full- featured PBX options on a single line.

McWilliams says the city eliminated 17 independent systems. They still have their PBX, but worked with Nortel to integrate VoIP into the traditional switch. This, he says, “gives us a lot more robustness. And, it’s the reason we went with the Nortel. … That’s what I like about it.”

Another deciding factor was the ease of adding voice and data services for remote, temporary offices. “Five times a year our population swells into in excess of a million [people] for weeks at a time,” McWilliams says. “We’ve set up temporary police precincts. Those are very expensive.” Typically, they would install 1FB line and dial up modems to the network. “Now, with this integrated system, we just run voice over IP over fiber.” The obvious advantage is enhanced public safety. Officers stationed in these locations for Bike Week or the Daytona 500 can access records, wants and warrants without any problem. They also have full telephone services. “It gives them full communication without having to learn something new. They use the same type of phones. To me that’s one of the key features of this system.”

They have also been able to extend city telephone services to city officials’ remote or home offices with the new VoIP system.

The city did eliminate one of its telephone operators, but the cost-savings has been nothing less of phenomenal. They’ve not only gotten their telephone directory listing down to a single published number, they also saved “right off the bat,” a quarter of a million dollars. Additionally, another quarter of a million was saved by bringing all the telephone maintenance in house as well as reducing the system from 17 various switches to one single switch. McWilliams ticks off other various savings.

The response has been positive thus far. So much so that information services was made its own independent city department. Typically in government agencies, technology resides under the umbrella of city or county finance departments.

McWilliams advises network administrators to disregard any existing misconceptions about VoIP they may have heard circulating. “With today’s money crunch we need to look at all avenues to save money and give users the same or better services at a reduced cost. [VoIP] really drives it home. Granted, we’re not having to worry about toll calls, but across state or across town, it’ll work really well.”

The services will be expanded. Videoconferencing was eliminated from the initial implementation. McWilliams hope that will be added in the next budget year. He is cryptic about other projects in the works, but says several ideas are being tossed around.

City-administered VoIP pay phones for all those Daytona tourists?

You never know. It could be quite possible.

What seems to be the most ideal scenario would be starting from scratch to build a combined voice and data network, which is exactly what the West Virginia University Foundation was able to do when they recently moved to new facilities. We’ll examine their situation tomorrow.

Related Articles:
Talk is Cheap
VoDSL Delivery Strategies
Any Calls For Enterprise LAN Telephony?
Convergence Without the Next Generation

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