Cisco And IBM Team To Offer VoIP Services

Cisco hopes partnership will cement its lead in the Voice-Over-IP equipment market

InformationWeek Staff, Contributor

May 21, 2004

3 Min Read

Amid surging demand for voice-over-IP gear and services, Cisco Systems and IBM last week formed a partnership to encourage business adoption of the technology. The vendors will jointly develop and sell VoIP products and services, enabling companies to buy a package of Cisco's IP-telephony software and hardware and IBM's services and integration capabilities.

Cisco and IBM also will work to ensure that their VoIP software and hardware complement each other. To do this, they're integrating Cisco Unity communications software with Lotus Domino; putting IBM information-management database software into Cisco's Call-Manager; delivering Tivoli systems-management certification with CallManager; supporting CallManager on the IBM eServer xSeries x345, x306, and x345 server platforms; and building industry-specific applications and services for the retail and financial-services sectors.

By teaming with IBM, Cisco hopes to further expand its dominance of the VoIP equipment market. According the Synergy Research Group, Cisco shipped 41% of all IP phones that hit the market in 2003, nearly four times as many units as its closest competitor, Alcatel. Two weeks ago, Cisco revealed that it had shipped 3 million VoIP phones in the last five years to more than 14,000 customers worldwide.

Meta Group analyst Elizabeth Ussher says the Cisco-IBM partnership isn't earthshaking. "IBM has partnerships with a lot of different vendors, as does Cisco," she says. "Unless there's a significant financial investment between the two, I don't think this means much." The companies declined to reveal the financial details of their partnership deal.

Cisco dominated worldwide IP-phone market share last yearBut some customers say the pairing of two companies may be a key factor in getting businesses to deploy VoIP. When law firm Preston, Gates & Ellis LLP moved into a new office about a year ago, it decided the time was right to ditch its old phone system and implement voice over IP. Initially, it planned to install the system itself but ultimately elected to have IBM act as its integrator, installing the hardware and software to connect 650 workers.

"We rarely use consultants for our implementations internally, but voice over IP was a new thing for us," says Kim Church, CIO at Preston, Gates & Ellis. "There are too many nuances and ins and outs that are unique to the system. We wanted to implement and manage the system ourselves but couldn't."

That's a common reaction to the challenges of VoIP, says Meta Group's Ussher. "Very seldom does an organization actually set up their own telephone system," she says. "There's usually someone doing it for them."

Since installing the VoIP system, Church says the law firm has eliminated a lot of long-distance, voice-conferencing, and maintenance costs. It has been so successful that the firm has already expanded the deployment to three other offices, and, next month, it's adding a fourth.

Consumer-oriented voice-over-IP systems were also in the news last week. VoIP service provider Vonage revealed that it's cutting the cost of its unlimited-calling home-user service from $35 to $30 per month. Competing services cost more, including AT&T's new CallVantage service, which runs $20 a month for the first six months and then $40 a month.

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