Lehman Brothers

Introduction Lehman Brothers Master Financial

Lehman Brothers provides voice service to a global employee base from clusters of Cisco CallManager IP PBXs that reside in redundant data center facilities in Manhattan and Jersey City, N.J. The firm began its foray into VoIP with a 50-phone IT pilot project in early 2001. That morphed by mid-year into a 1,000-seat deployment for the firm's investment bankers. Now, the VoIP network has grown to more than 8,000 IP phones in the New York area, the U.K. and Japan. John Manville, vice president of network services at the New York firm, takes away these five lessons from his three years of managing this large-scale VoIP deployment. The first, and the hardest learned, came out of the Sept. 11 attack.

1. IP telephony proves its worth for disaster recovery.

With all of Lehman's offices and its New York data center destroyed in the Sept. 11 catastrophe, the firm learned the real value of VoIP only months after providing its first IP telephony services. Despite the devastation, business continued at Lehman, via the company's disaster-recovery data center in New Jersey. The remote back-up site hosted all applications - voice and data - for ad hoc offices in Manhattan. As Lehman employees spread out to a number of buildings around the city, including hotels, their IP data and voice calls traversed Lehman's metropolitan-area network, 10G bit/sec dense wavelength division multiplexing links spanning the Hudson River.

"We found that IP telephony was the quickest way to get people set up and also to let them keep their phone numbers," Manville says. "We had people in Sheraton hotels with Category 5 wires running across the floor, but they were able to work."

2. IP telephony can lead to operational cost savings, but not necessarily at smaller sites.

Lehman has saved about 30% on hardware costs over the last several years by using more flexible IP PBX gear and phones than TDM PBXs, Manville reports. The firm has shaved several million dollars from its IT budget by eliminating costs incurred because of Centrex-related moves, adds and changes. "In the New York area, we've seen a lot of cost savings," he says.

But Manville cautions that cost savings have not been as dramatic in smaller installations as they have in the major metropolitan area. "It's been kind of a wash," he says of Lehman's VoIP effort at branches connected to its CallManager clusters.

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3. A killer app? No such thing.

Productivity applications such as unified messaging are a hit with employees, but the savings aren't as impressive, Manville says. "There really are no killer applications for IP telephony that we've found. It's more of a buildup of smaller applications and benefits that make the system as a whole valuable," he explains.

4. Larger deployments can bring out the bugs.

Lehman's IP PBXs got buggy when it took VoIP into the 5,000- to 8,000-phone range, Manville says. The most serious was a delay in dial tone. But, he adds, Cisco came on site and quickly squashed the major CallManager bugs.