In Depth: Five Things You Must Know About VoIP - InformationWeek

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6/30/2006
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In Depth: Five Things You Must Know About VoIP

Ready to bring VoIP into your business? Getting pressure to implement it but trying to avoid it? Here's our five-point take on the state of the technology.

Like any emerging technology, voice over IP presents a painful series of "yes, but ..." trade-offs--Yes, it can lower calling costs, but the gear's expensive and finicky to get running. VoIP differs from most emerging technology, however, in two ways: how quickly it's being adopted and how much is at stake to get it right.

Our latest InformationWeek Research survey finds 39% of companies have installed voice over IP, and another 33% will install it in the coming months. A mere 12% say they have no plans to use it. The reasons for VoIP adoption vary. Lower costs leads (cited by two-thirds of those planning to use it), but many respondents also have higher-value returns in mind: 41% cite building a one-stop communications platform, and 36% expect increased collaboration by combining voice with data-sharing, videoconferencing, or presence technology.

Whatever the many reasons, the march is on to VoIP. At some point very soon, you're either an adopter or a holdout. This will be how most business calls are made. Here's our five-point take on the state of this technology in business.

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VoIP is inevitable

Maybe it's not quite in the same league as death and taxes, but at some point, not having the converged-network capabilities VoIP allows becomes a competitive liability. Picture this: Since installing VoIP, your largest customer says it's become a big user of its videoconferencing and presence tools. It would like to plug in your staff to speed up response times. Too bad you don't do VoIP.

For many companies, the big move comes when their PBX-based telecommunications system reaches the end of its life cycle. "We needed to replace our aging--frankly antique--equipment," says Jim Bare, IT manager for western North Carolina's Pepsi Bottling franchise. VoIP "is the future," Bare says. What his company got were new features, lower long-distance costs, and simpler internal call routing.

The phone companies see the writing on the wall. AT&T and Verizon already offer big-business VoIP services. They're upgrading their network backbones with Multiprotocol Label Switching, a way to label different types of IP traffic for prioritization. And they're starting to implement the IP Multimedia Subsystem, a standards-based network architecture that will let them provide and charge for services that enable both wired and wireless devices (like cell phones, PDAs, and laptops) to use VoIP and the applications that go along with it, including videoconferencing, instant messaging, and presence awareness.

For the first time last year, telecom and networking companies shipped more IP telephony ports--4.3 million, up 40% from the previous year--than conventional circuit-based ports--4.2 million, down 15%--according to TEQConsult Group.

It probably doesn't make sense for companies to move en masse to VoIP if their PBX gear is still viable or they aren't relocating or adding offices. But there's an interim step: a hybrid switch that's essentially a conventional PBX with interface cards or gateways that enable IP. This approach lets companies leverage legacy equipment and infrastructure. Hybrid PBXs are popular as they let companies rip and replace gradually. They accounted for 55% of PBX sales last year, bringing in $900 million in revenue in the fourth quarter; the number of lines shipped last year was up 21% from the year before, according to the Dell'Oro Group.

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