By Neal Weinberg
Network World, 8/10/98

Kanematsu USA, a subsidiary of a Japanese import/export company, has slashed its international phone bill 60% to 70% by sending voice and fax traffic from eight U.S. branches to Japan over the public Internet.

More than 100 faxes per day and voice calls from about 50 Japanese-speaking employees are funneled through a Lucent Technologies Internet Telephony Server located at Kanematsu's New York office, then across the Internet to Tokyo and Osaka, says George Emmett, assistant telecommunications manager.

As with any new technology, there were initial bugs to work out. When Kanematsu first installed a beta version of the system last April, the echo was so severe "it sounded like you were talking in a bubble," Emmett says. The delay was so bad, even fax transmissions got disconnected. After several upgrades from Lucent, the quality is now acceptable, but Emmett has no plans to risk moving domestic voice traffic onto the Internet.

Such is the state of IP convergence circa mid-1998. Pioneers are dabbling with the technology at the fringes of their networks, installing IP gateways to provide cost savings and more efficient use of bandwidth. We are beginning to see the potential IP holds for bringing together the voice, video and data worlds, but nobody yet is embarking on major infrastructure changes aimed at creating a fully converged IP network or large-scale domestic voice deployment (see story, page 58).

The most popular early applications are IP voice and fax over the public Internet, especially for international calls, and IP voice over frame relay nets. Companies are also experimenting with IP for videoconferencing and Web-enabled call centers, and to support voice over wireless nets.

Sold - to a point

A year ago, when Universal Sewing first installed two voice-over-IP gateways from VocalTec Communications, latency problems were so bad the $27,000 system was unusable, says Technical Systems Administrator Curt Geiler. Today, thanks to software revisions from VocalTec and hands-on support from Motorola, voice quality is "on a par with [the public switched telephone network] a majority of the time," Geiler says.

There are still occasional latency problems, however, and sometimes a call can't be completed because of Internet congestion. Overall, though, the cost savings associated with IP over the Internet for international traffic outweighs concerns about voice quality, Geiler says.

While the initial experiment has proven successful, Geiler doesn't expect Universal Sewing or any large company to move a significant amount of voice traffic onto the public Internet until it becomes more stable and reliable, such that carriers offer service guarantees.

In the meantime, an alternative to the Internet is to run IP voice over frame relay networks. About a year ago, Amcore Financial pulled its data traffic off its leased-line, time-division multiplexer (TDM)-based net and moved it to a frame relay service from MCI Communications.

Amcore's 65-site frame relay network provided the performance, flexibility, scalability and cost savings the Rockford, Ill., banking company was looking for. But there was a hitch: "It left us with parallel networks," says Bob Davis, network operations manager.

Just about the time Davis was looking for a way to ditch the dedicated lines altogether, Cisco Systems came out with a module that allows its 3600 series routers, which Amcore already used, to handle voice-over-IP traffic.

So far, Amcore has IP voice over frame relay running on its five most expensive leased lines. For an investment of $5,000 per router, or $25,000, the bank expects to save $70,000 per year in dedicated line costs, Davis says. Sound quality has been fine, although he says some users grumble about having to learn new phone numbers and access codes. He plans to add IP voice at 20 more sites.

Still, Davis can't envision the bank swapping out its existing phone equipment for an all-IP network. "I don't see it happening for some time," Davis says. "There's some pretty old stuff still in place, and if we can get use out of it, we will."

For Computer Services in Valparaiso, Ind., conserving bandwidth was the prime motivation behind the decision to add IP voice to its 15-node private frame relay network. Telecommunications Manager Perry Sheetz says when he first ran voice over frame relay, he had to nail up a permanent 32K bit/sec connection to accommodate the traffic.

The voice compression features of a voice-over-IP gateway from Micom Communications allow him to support the same volume of voice traffic with only 8K bit/sec of bandwidth. This will help him stave off additional T-1s as his overall traffic increases.

IP without wires

Raymond Weller, international telecommunications analyst at Amoco, is bullish about the Nuera equipment. "The savings on bandwidth is just tremendous" compared with TDM, and the voice quality is "superb," he says.

IP also helps Weller with some addressing problems associated with the offshore platforms. The eight main rigs and 30 satellite rigs move into new physical configurations every few months. Before he installed the IP gateways, each time there was a change, Weller had to remap the data link control identifiers on the frame relay router at the Trinidad office to create new frame relay subnets for each new combination of rigs and satellite rigs. Weller describes that process as "a nightmare.'' Now, Weller is able to avoid a fullscale reconfiguring of the frame relay network by using the gateways located on the rigs to direct offshore traffic. When the main rigs and their satellite rigs move, Weller simply changes the IP addresses for the ships, which can be done with a single command.

Another company sending IP voice and fax over wireless links is PCS Phosphate Company, headquartered in Aurora, N.C. Until recently, the mining company had to pay its local phone company $15,000 whenever it moved its mining operations from one location to another, which typically occurs two or three times per year. PCS mining trailers are located in remote areas, and large cranes and other equipment interfere with above ground wires. So the company had to pay to bury phone lines underground.

In June, PCS began using a Micom voice-over-IP gateway and wireless equipment from Solectek to bypass the PSTN, says Rick Lehner, supervisor of information services. The company created eight wireless IP links - seven for voice and one for fax - between a mining trailer and the main processing facility eight miles away. PCS expects to recoup its $50,000 investment in less than two years, Lehner says. From then on, it will incur only the expense of moving dishes and other equipment associated with the wireless setup. Lehner reports the quality of the 8K bit/sec voice is excellent. But he has no plans to swap out the firm's PBX because it still provides features that can't be matched by IP voice products, such as automated call-back and the ability to assign restrictions to certain classes of traffic.

Web calls and video teams

At koshersupermarket. com, online shoppers with questions can click on an icon to initiate a voice call over the Internet to the company's customer service center - without interrupting their Internet sessions. "It certainly helps us close deals, and it makes it more convenient for the customer," says Alex Schleider, vice president of operations at the online supermarket.

But for customers, using the IP voice connection requires some effort. In addition to having a PC equipped with a full-duplex sound card and microphone, shoppers have to download a plug-in from IDT in Hackensack, N.J.

That kind of inconvenience on the customer end, along with concerns over security and voice quality, may explain why only 1% of companies have Web-enabled call centers, says Robert Mirani, senior analyst at The Yankee Group, a research firm in Boston.

As vendors satisfy those concerns, Web-enabled call centers will increase in popularity, Mirani says. He predicts 10% of call centers will be Web-enabled by 2000, and 33% will be enabled by 2002.

While voice is the most oft-cited new IP application, IP video perhaps best illustrates the benefit of carrying all types of traffic on one pipe.

The University of South Florida's Health Sciences Center has installed an all-IP network to link 28 departments scattered in a 20-mile radius. Using IP-based videoconferencing systems from VCON Telecommunications, the center's staffers and researchers can transmit voice, video and data from their desktops.

And a team from Lockheed Martin Tactical Aircraft Systems in Fort Worth, Texas, is in the early stages of a project aimed at creating a virtual design team that will conduct multiparty IP videoconferences using Lucent's MultiMedia Communications eXchange server. The goal is to increase collaboration among engineering groups working in England, Texas and California on the design of a new aircraft, the Joint Strike Fighter.

But Lockheed Martin has some obstacles to overcome, including securing enough bandwidth to support video and dealing with voice quality that isn't always up to snuff, says software specialist Wynn Joness. During the latest videoconference trial, Joness had to shut off the IP voice feature and revert to the PSTN to improve voice quality.