Vox Popular

Voice-over-IP technology still has problems, but now may be the time to buy.

It happens during a heated conversation when someone raises a tough question--that uncomfortable, lingering silence, when everyone's waiting for someone to speak up. During a teleconference, it's even more apparent when only the barely noticeable sound of static fills the void.

Turns out, people actually like that static--one of the many lessons business-technology executives are learning as more switch their telephone systems to voice-over-IP networks. When inChord Communications Inc. installed VOIP technology, calls became so crystal clear that employees thought they'd been cut off every time a conversation hit a lull. It got so irritating that inChord actually added static into calls, says Tony Jerig, VP of technology services at the $100 million-a-year marketing communications company.


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That was one of the few problems inChord experienced after deciding two years ago to shift its voice traffic from a circuit-switched network to an IP data network. It's a move most companies will follow. Slightly more than one-third of companies consider converged voice and data networks a priority this year, according to InformationWeek Research's 4Q Priorities survey of 300 business-technology executives. Almost 90% of large international companies plan to use voice over IP within three years, according to a recent Meta Group study.

Today's adopters of voice over IP don't give one dominant reason for using it. Some cite cost savings, but plunging phone rates have made that less of a benefit. Some like the consolidated management it allows, or specific applications. But for many, the appeal comes down to a vague notion of future-proofing: They don't want to sink more money into conventional phone systems where innovation has dried up, and they want to be prepared when high-value VOIP applications arrive.

What's emerged from the early adopters are general rules about when the technology makes sense.

Businesses have only a few options for setting up IP telephony. They can buy IP phones and IP PBXs from equipment vendors such as Avaya, Cisco Systems, and Nortel Networks, which means connecting to existing leased-line data networks and managing the systems themselves. Or they can buy services from carriers such as AT&T, Global Crossing, Sprint, and WorldCom, and let the carriers manage calls, similar to today's Centrex PBX services.

Telecommunications carriers and equipment vendors offer IP networks for integrated voice, data, and video communications. AT&T pledges to deliver all its future voice and data innovations over an IP backbone. Sprint and WorldCom earlier this month unveiled VOIP services for businesses, and WorldCom is running trials with Microsoft to let customers use XP as the IP telephony interface to WorldCom's network by early next year. And in unveiling its strategy to land sales from small businesses next year, Cisco this month identified IP telephony as one of three key growth areas, along with wireless and security.

Businesses moving to or opening new offices are prime candidates for IP, because they're generally buying new phone systems and wiring buildings. InChord examined voice over IP because it was creating a 400-person office and had outgrown its old PBX system. It had voice-capable Cisco Catalyst 5000 switches in its frame relay data network. By leveraging that design for voice traffic, the company realized some quick and significant cost savings.


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