TECHNOLOGY : Clearing the voice blocks – Is there a business case for VoIP?

Companies that develop technologies allowing voice calls and messages to run across IP (Internet Protocol) based data networks can explain the business benefits of doing that in some depth. Service companies in charge of the actual implementation of those technologies will agree with those benefits, but also caution that the Voice over IP (VoIP) implementation process may not be as straightforward or as inexpensive as the business hopes it to be.
The expense, as all VoIP analysts know, is in readying the data network to carry voice, and possibly video, reliably; and in the purchase and integration of communication applications that converge and make the move to VoIP worthwhile. While the ‘unified messaging’ vision of VoIP – the delivery of highly efficient, integrated communication tools that give customers and staff great deal of flexibility and convenience – is valid, technological and business case challenges around VoIP dictate the need for an experienced VoIP implementation partner from the first stages of planning and product selection.
“It hasn’t got any easier to design and do VoIP implementations,” says Verdon Kelliher, northern ITS sales manager for IBM New Zealand.
“There is still large sales cycle as clients first gets their heads around VoIP; then take on the layers beyond the VoIP decision, like engineering, then more decisions around the right VoIP vendors and implementers. It requires lot of people resource, even when there is strong business case, as separate voice and data teams often need to be integrated within the business.”
Kelliher says when legacy PABX reaches the end of its life, the next tele-phony system, whether PABX or purely software based, will be IP-capable. But how and when the business harnesses that system to implement network-wide, fully-integrated VoIP system, complete with applications, is difficult to gauge as many businesses have yet to start.
“There’s still not that killer application to drive [network-wide] VoIP – after all, businesses already have voice, obviously. Certain useful IP applications are rolling out but for many businesses these are ‘nice to haves’ as opposed to productivity drivers,” says Kelliher.
One of the biggest obstacles to full VoIP implementation, according to Ross Goodfellow, solutions director network convergence for Fujitsu Australia and New Zealand, is clearly establishing the business case for the customer.
“The costs of traditional PABX operations are typically not well established and buried in operational and infrastructure costs. It can be hard to deliver businesses wider view of VoIP benefits when they can still see perfectly good piece of existing PABX equipment,” says Goodfellow.
There are also confusions around the technology, says Alan Register, unified communications sales manager for Cisco New Zealand. Some telephony vendors that claim to sell ‘full’ VoIP solutions are actually selling hybrid ‘IP-enabled’ systems that largely comprise usual PABX features. Businesses buy these solutions, says Register, either because they have financial investment in legacy telephony infrastructure or because they want to mitigate the risk of moving to full integrated VoIP environment.
“When VoIP vendor [properly] marries traditional telephony technology with new world IP technology, the whole network infrastructure has to be realigned and the business needs to continually invest in putting intelligence into the network. If hybrid VoIP system is not helping company to transform its business, then there’s no point having it,” he says.
No VoIP vendor wants to throw the baby out with the bath water for the sake of technology, says Goodfellow. They know customers need guidance to migrate to an integrated VoIP environment, whether that’s in phased or ‘big bang’ manner. Like Register, he says VoIP discussions should be centred on the value of data, voice and video convergence over the entire network, not voice alone.
“Video is one of those killer [communication] applications just like voice; video will be as ubiquitous as voice in the not-too-distant future. The network is there, the equipment is almost there – most VoIP handsets even have little screens in them. It’s just that people’s behaviours and demand hasn’t really caught up yet.”

Unified messaging and all that
When VoIP works, it seems it really does work.
In May, research organisation IDC observed that the 2006 market for enterprise VoIP applications in Western Europe alone was worth $194.8 million and that larger businesses were increasingly interested in VoIP applications in four key areas: unified communications applications; mobility applications tied to IP PBX functionality; vertically oriented applications and other applications running on IP PBXs; and IP telephones and enterprise applications tied to IP PBXs.
Closer to home, the 2007 MIS Top 100 book which surveys 134 of New Zealand’s largest organisations, found significant number of companies had committed to some form of VoIP investigation and analysis, while others had gone the ‘whole hog’ and implemented network-wide VoIP technologies and unified applications (see box story “Those Who Do”).
The desire for unified messaging and communication applications across IP certainly seems to be heating up. Rob Spray, general manager for Nortel New Zealand, says in the early days of VoIP, Nortel encouraged businesses to invest only if they deemed it absolutely necessary, but lost ‘thought leadership’ as result of not being “evangelical enough about VoIP”.
Seeking to re-seize market mindshare, Nortel decided the defining benefit of any VoIP system is application convergence and how those applications are delivered to the desktop. In savvy move that has piqued the interest of organisations nationally and internationally, Nortel recently formed four-year global alliance with Microsoft, ensuring the delivery of tightly integrated Microsoft/Nortel telephony and communications applications to the desktop.
“Our applications people are now on Microsoft’s premises in Redmond and we have shared intellectual property. The resulting products are now much simpler and pre-integrated,” says Spray.
Paddy O’Neil, who looks after enterprise customers for Agile, says while there is still limited understanding of how VoIP technologies enable wider communications platform, the desire for integrated communication applications is definitely there.
“VoIP is just the plumbing layer; facilitator to enable the applications for the business,” says O’Neil.
He says legacy telephony voice suppliers have traditionally worked in separated environment without data security implications or data network implications – to bring these together under VoIP requires strong and disciplined approach to network and traffic analysis.
“The routing, the network, the resilience on the network, the security implications – they all depend on cooperative approach between the customer, the network provider, and the software providers. Where it can go wrong is where people say ‘well I am looking after my part, you look after your part’. Voice is very unforgiving of that,” says O’Neil.

Tailored solutions
Large organisations are not the only beneficiaries of the telephony and messaging efficiencies and savings afforded by VoIP. Register says Cisco is about to embark on significant ‘push’ into the small business market in New Zealand with scaled Cisco VoIP solutions, and Dave Mason of Agile Technology (which represents the Avaya VoIP brand in New Zealand), says VoIP lends itself well to smaller businesses with head office of 20 or 30 people and satellite offices of up to 20 staff. (Small business Avaya customers in New Zealand include Tourism New Zealand and Allied Workforce.)
“The first VoIP question is always is there really business case? If business has 20 or 30 people at one standalone site, no branch offices and no need for remote working or telecommuting, then VoIP benefits are [finite],” s

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