Winning over skeptics, VoIP support builds

While brand-name companies are making news with ambitious convergence plans, other large businesses eyeing convergence say VoIP adoption will be more of a slow march than a sprint.

Industry experts say that IP PBX and phone technology is ready for mass deployment, after years of doubts about the technology's ability to scale and provide 99.999% uptime - the tenet for system reliability among corporate telecom executives. But just because the gear is ready to go doesn't mean every company is ready for a telecom rip-and-replace job, analysts and users say.

Last week, Bank of America announced plans to standardize on Cisco IP phones across the entire company, with an eventual 180,000 IP phones running worldwide. Last month, Ford and SBC announced plans to install 50,000 IP phones in the carmaker's U.S. offices and plants. And in July, Boeing said it would install 150,000 IP phones throughout the company worldwide.

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While brand-name companies are making news with ambitious convergence plans, other large businesses eyeing convergence say VoIP adoption will be more of a slow march than a sprint.

Industry experts say that IP PBX and phone technology is ready for mass deployment, after years of doubts about the technology's ability to scale and provide 99.999% uptime - the tenet for system reliability among corporate telecom executives. But just because the gear is ready to go doesn't mean every company is ready for a telecom rip-and-replace job, analysts and users say.

Last week, Bank of America announced plans to standardize on Cisco IP phones across the entire company, with an eventual 180,000 IP phones running worldwide. Last month, Ford and SBC announced plans to install 50,000 IP phones in the carmaker's U.S. offices and plants. And in July, Boeing said it would install 150,000 IP phones throughout the company worldwide.

Clearly, support for larger IP telephony rollouts is mounting; the number of IP phones planned among just Ford, Boeing and Bank of America represent about one-quarter of all IP phones shipped last year, according to IDC. The research firm says the installed base for enterprise VoIP gear will grow dramatically over the next several years. About 200,000 IP PBXs are installed in organizations now; 1.4 million IP PBXs are expected to be running by 2008. Meanwhile, worldwide IP PBX revenue will more than double from $2.6 billion this year to an anticipated $6 billion over the same time period.

But IDC's numbers show that the future of business telephone technology is not all VoIP - not even a majority. IP PBX revenue still will account for only two-fifths of all business phone equipment revenue in four years. By 2008, the number of circuit-switched PBX lines installed in businesses and organizations worldwide will still outnumber the amount of installed IP PBX lines by 3 to 1.

This is because swapping out large, entrenched business phone systems - usually consisting of multiple vendors' products - is very complicated, IT executives say. Also, some users say it is still challenging to prove the bottom-line case for exchanging current PBXs for IP gear.

On the bright side

The large IP deployment plans that are coming out now signal IP PBXs have finally overcome scalability and reliability issues that dogged the technology for years.

"When it comes to just building a phone system, most vendors' products are good enough [technically] for that," says Bob Hafner, director of research for Gartner, on recent IP telephony adoption. When VoIP installations go wrong, he says, "it's not the technology; it's the implementation - either the end user or supplier or channel didn't think of something."

But while the technology is now sound enough for big-time rollouts, besides the Boeings and Bank of Americas and Fords of the world, IP telephony "is not happening as fast as what I had expected," Hafner says. The holdup is that each company must justify the costs of a convergence project and judge whether the potential productivity enhancements and cost savings outweigh the cost of ripping out working telecom gear.

"Anyone looking at an IP PBX already has working phones on desks," Hafner says.

VoIP: How much, how soon?

Most IT professionals say IP telephony is an eventuality. In a survey of 500 IT professionals released last month by the Computing Technology Industry Association, 73% of respondents said they use or plan to use convergence hardware and software over the next 12 months. But plans on how much VoIP will be deployed and when can vary greatly among large organizations.

"Our viewpoint is that we don't want to deploy any new digital PBXs and handsets anymore," says Charles Goodall, director of telecommunications for GlaxoSmithKline, the pharmaceutical giant headquartered in the U.K. "Within the next three to four years, our goal is that the majority of our phones will be IP handsets and softphones."

GlaxoSmithKline has multiple phone systems from Avaya, Nortel, Cisco and Siemens, with various amounts of shelf life left in each respective PBX. This would make an immediate, company-wide change to IP difficult and uneconomical, he says.

"For the most part, you don't save a lot of money upfront," Goodall says when installing new IP voice gear. "Let's face it: [Legacy] digital handsets work. Whether or not you should get rid of them depends on where you are in terms of depreciation and support contracts for those phones," he adds.

The firm recently took its first steps toward convergence with an all-IP installation at a new 400-employee office in Charlotte, N.C. Every phone in that building is a Siemens IP phone, and the central phone system is a server-based HiPath 4000 IP PBX.

But GlaxoSmithKline will build voice networks on IP on a case-by-case basis over the next several years across the company.

"I would say IP phones are in use in a small percentage throughout the company" and will be for some time, Goodall says. He says the company will take its time choosing which vendors' equipment to install, with a plan to standardize on a few suppliers for different regions, such as the U.S., Mexico and Europe.

"The most important thing for us right now is to look at regional [VoIP] deployments and make sure we have standardization within various regions," Goodall says.