InformationWeek

January 3, 2000

Who Needs Voice Over IP?

By Dawn Bushaus

Illustration by Dave Plunkett lthough voice over IP may be a brave new world for businesses and service providers, voice over frame relay and asynchronous transfer mode are old hat. During the past few years, many companies have started to converge their networks by running voice on their frame relay and ATM networks. The verdict? It works--and it saves money.

By running voice traffic over its frame relay network, Burlington Coat Factory Corp. has saved a bundle--$60,000 to $70,000 a month, to be exact. "We dropped $1 million to build our frame relay network and it was paid off in a year and a half with savings on voice," says Matt Fahrner, manager of networking for the Burlington, N.J., retailer.

Burlington Coat Factory has about 275 locations, most of them stores, linked by a frame relay network leased from Qwest Communications International Inc. Each store is equipped with a Cisco Systems 3810 router and a 56-Kbps frame relay connection. Burlington runs all its intracompany voice traffic on the network, which has let it eliminate all the leased lines and satellite services it previously used for voice traffic. "This has been one of the most successful projects we've ever done," Fahrner says. "For anyone who needs constant connectivity among locations, voice over frame relay makes a lot of sense. You'd be foolish not to do it."

Bell Atlantic Corp. didn't have to work hard to convince Hannaford Brothers Co., a Portland, Maine, supermarket chain, to run voice traffic over an ATM network connecting its 165 store locations along the East Coast. All of Hannaford's remote locations connect at T1 speeds (1.544 Mbps), while its headquarters office in Maine is on a Sonet ring running at OC-3 speeds (155 Mbps). "It was a no-brainer," says William Homa, CIO officer for Hannaford, which owns Hannaford Food and Drug Superstores and Shop 'n Save stores.

Hannaford installed an ATM network about a year ago to handle real-time batch data transfers, company intranet traffic, credit and debit authorizations, E-mail, and intracompany voice traffic. "We put in the ATM network for data and paid for it with voice," Homa says. Previously, Hannaford stores used the public switched telephone network for voice, with a couple of warehouses sharing a T1 line. "We expect to eliminate up to 1,000 voice lines in our stores," Homa says, adding that the company already has done away with 300 lines in its 45 stores in Maine.

Both companies are pleased with the quality of the technology. If latency gets high on the network overall, then voice quality does suffer--but that hasn't happened much, Fahrner says. "The quality is quite good," he says. "It's very near toll-quality, and we have minimal complaints."

Both Burlington Coat Factory and Hannaford say they will evaluate voice over IP as the technology matures. But some industry watchers question whether companies really need to look at voice over IP. Voice over ATM is the best bet, according to Tom Nolle, president of CIMI, a consulting firm.

"The local exchange carriers are not going to deploy an IP infrastructure," Nolle says. "It's been decided; there's no way it's going to happen." This means that even if companies want to run IP voice, data, and video applications, he says, they'll have to do it on top of an ATM network.

Return to main story, A New Era For Voice.

Illustration by Dave Plunkett

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