Ford Trades Up To IP Telephony System

Ford Motor Co. is buying a snazzy new communications system with all the extras. The automaker is trading in an old Centrex voice system and a point-to-point Ethernet data service for a converged voice, data, and video IP network that will serve 50,000 employees at 110 locations in southeast Michigan. When fully deployed over the next three years, it will be one of the largest IP telephony networks in the country.

Ford intends to merge its IP and wireless systems, Surdu says.

"We're looking at providing technology in a much more adaptive and on-demand manner," says George Surdu, director of IT infrastructure for the automaker. "We want to provide technology when and where the business needs it." The network eventually will be rolled out globally, Surdu says, although he wouldn't provide a timetable. Ford already uses IP telephony between North America and several overseas locations.

The Michigan network is part of an overall IT infrastructure upgrade that includes consolidation of servers and storage and the merging of a variety of communications networks. "We have every flavor of every thing, and trying to connect all of those dots is costly and time-consuming," Surdu says. "It also has performance and availability implications. We want to simplify and defragment our infrastructure. This is the beginning of a next-generation-network march we're on."

The automaker hired SBC Communications Inc. to design and manage the network, which will be based on equipment from Cisco Systems. Ford has been using a Centrex voice communications system from SBC for 18 years. It also uses SBC's Gigaman Service, a point-to-point Ethernet data service, to connect the Michigan facilities.

Surdu wouldn't discuss the cost of the network or potential savings, although some reports peg the value of the deal at $100 million. He did say that the move to IP telephony "will take money off the table." IP communication makes it easier for companies to move, change, or add users to the network quickly and cheaply. The network also will serve as a new platform for Ford's video services.

Ford has one of the largest private video networks in the world, which it uses to bring together teams to collaborate on product design and engineering, Surdu says. But it can be difficult to set up a video conference on the private network. "It's not the simplest technology to use," he says. Video over IP is easier to deal with since it's "just a computer application that rides on top of the network." The customer interface to create a video connection and to manage and monitor a video conference is much easier to use, he says.

The new network will facilitate Ford's growing use of video-to-the-desktop and Webcasts for internal communications and employee training, he says. "It's a very productive mechanism for communicating company strategies, updating the workforce, and education," he says.

Ford also is a big user of wireless systems, and Surdu expects eventually to merge all of these technologies. "The ability to use wireless solutions and have those seamlessly integrated with our terrestrial solutions will be a big plus," he says.

"This is a big deal and very exciting," says Bryan Van Dussen, director of telecom research at the Yankee Group research firm. "But the fact is that we're still in the early-adopter phase of this technology. There are 114 million business phones installed. Cisco says it has shipped 3 million IP phones. It will take a while before we displace 114 million handsets."

The Ford network is the second-largest IP telephone deployment, behind that of Boeing Co., which is in the process of deploying 60,000 IP phones to employees, Van Dussen says. "The vast majority of all deployments involve fewer than 60 handsets," he says. "Most companies are just kicking the tires on this."