* Why VoIP is one of the hottest apps in the U.S. federal market
One of the hottest applications in the U.S. federal government IT market is VoIP, and it shows no signs of cooling down anytime soon.
Among the federal agencies that have migrated to VoIP are the Census Bureau, the Departments of Commerce and Education, the Securities and Exchange Commission and the Food and Drug Administration. Many other federal agencies are considering major VoIP implementations, vendors say.
“We have several agencies looking at pure VoIP, with 10,000 users or more,” says Wendy Bahr, operations director for civilian agencies at Cisco’s Federal Division. “We have many of these proposals on the table.”
On the horizon, the U.S. federal government’s massive telecommunications services buy called Networx is offering products and services designed to help agencies migrate to VoIP and other emerging IP applications. Networx is a 10-year, $20 billion contract that will provide voice, data and video services to all federal agencies. Networx bids are due in early August, with an award scheduled for April 2006.
“From Cisco’s perspective, we’ve reached the tipping point,” Bahr says. “We’re now seeing growth [in VoIP sales] at a very fast pace. When the Census Bureau first came out with VoIP in 1998, they were an industry forerunner. They’ve now led the way for other agencies to come along.”
Bahr says Cisco is selling twice the amount of VoIP gear in the federal market that it sold a year ago. “If you look at all federal telecom systems – TDM, Centrex, key systems – I would say that within the civilian agencies, we probably have a 20% penetration rate with VoIP,” she says.
Agencies are migrating to VoIP when it comes time to replace aging equipment or when they are moving to a new office location.
“Where we see rapid growth in VoIP is anytime there’s movement from one location to another or when current technology is aging,” Bahr says. “We’re not seeing any of our customers with TDM replace it with TDM. There are lots of key systems that have aged to the point where agencies can’t get parts and maintenance. Those are predominantly the two activities that cause customers to look at VoIP.”
The number of federal VoIP implementations may rise further due to the Pentagon’s recently announced plans to move thousands of office workers from locations inside the Washington D.C. area’s Beltway to new locations either on military bases or in outlying suburbs. This massive relocation, which aims to address the new security requirements instituted in response to the Sept. 11 terrorist attacks, will affect as many as 50,000 employees in Northern Virginia alone.
“Any time we see a greenfield approach, where people move from one location to another, people look for a cost-effective solution. That’s where I see VoIP really shines,” says Kevin Orr, Cisco’s director for armed services. “VoIP is cost-effective, highly scalable and secure. But the biggest thing is flexibility. It really helps when you have a transient workforce.”
Orr says VoIP fits well with the military’s relocation plans in the Washington D.C. area as well as its overall push towards IP communications on the battlefield. Orr points out that Cisco has already shipped more than 18,000 IP phones – both wired and satellite – to the military’s tactical operations in Iraq and Afghanistan.
“We’re seeing a very big demand in getting IP communications as far out as we can to the soldiers in the field,” Orr says. “In the past, they had to take out a data system and a PBX system. Now we’re enabling them to use one rack of equipment that can be quickly set up, quickly torn down and remobilized.”
Orr says the Army and Marine Corps are particularly active in rolling out VoIP on the battlefield. Overall, he says military sales of VoIP are up more than twice what they were last year.
“The transformation is occurring right now across the [Department of Defense] with IP communications, [and] VoIP is one of the significant enablers,” Orr says. “What’s really driving this in the [Defense Department] is not so much the return on investment, but the ability of VoIP to support the mission in a timely, secure and flexible way. The opportunity to run voice, video and data over a converged network allows for easy of deployment and scalability.”
