Cisco has been on a roll in VoIP lately – announcing three huge wins with Fortune 50 companies in three months.
Cisco has been on a roll in VoIP lately – announcing three huge wins with Fortune 50 companies in three months.
Users and analysts cite a convergence of several factors, including the improved ability of Cisco VoIP gear to work with legacy PBXs, refinements in telephony features, and the recent adoption of large-bandwidth and QoS-based WAN services in big businesses. Observers also notice a change in approach by the company and its integration partners on how VoIP is pitched to and installed in large IT shops.
The list of companies signing up for vast VoIP implementations is impressive. In July, Boeing said it would put in 150,000 Cisco IP phones, and last month Ford announced a 50,000-phone network. Last week, Bank of America topped them all, announcing a 180,000-phone deal with Cisco.
Bank of America said it will start to replace 362 PBXs in more than 5,000 branches next year with Cisco CallManagers – Windows-based servers running Cisco IP PBX software. Electronic Data Systems is providing network integration and support services as well. Bank of America would not comment on the project’s details.
“Cisco’s [IP telephony] products have matured quite a bit in the years we’ve been studying them,” says Cliff Naughton, director of network services for Boeing’s Shared Services Group. Cisco CallManagers have been running in various pilot deployments throughout Boeing’s network since 1999, when Cisco first entered the market. Past problems with the technology included scaling – such as problems in supporting more than 100,000 phone extensions – and missing features that were common on many traditional PBX products, he says.
“We’ve worked through those situations, and right now we’re feeling very confident about the technology,” Naughton says.
Network upgrades in WANs by companies such as Boeing and Bank of America also have paved the way for the IP telephony services.
Boeing recently switched from an ATM and frame relay WAN to a Multi-protocol Label Switching (MPLS)-based network managed by Sprint.
“Right now we’ve got an any-to-any model,” Naughton says. This lets any location in the network communicate over IP through the MPLS mesh service rather than the hub-and-spoke topology of the past frame relay network. “This network has QoS, and we’ve already moved a lot of internal long-distance traffic onto it,” he says. “It will also make it that much easier to connect sites as we [install] IP telephony.”
As for Bank of America, it recently replaced its ATM backbone and T-1 and T-3 branch connections with a nationwide optical network. It now has 4,200 offices connected to an optical backbone based on Cisco ONS 15454 switches.
According to printed statements by Bank of America IT executives, the optical backbone is doing more than just leading its VoIP rollout. It also has been integral in helping the bank take on the enormous additional IT burden from its recent acquisition of Fleet Bank.
Legacy integration
A shift in convergence strategy and message by Cisco might be another reason large businesses are adopting the technology. While most large companies want a strategy to migrate PBXs from TDM to IP over time, “that was not the message Cisco had in the past,” says Brian Riggs, an analyst with Current Analysis. “It was more like, rip out your PBX and put in CallManager.”
He says Cisco’s approach to customers now is to work CallManagers into telephony networks alongside the big-iron PBXs that eventually will be retired.
Cisco also made changes to its CallManager software earlier this year that make it easier for Cisco IP PBXs to run parallel to TDM-based PBX systems, Riggs says. Previous CallManager versions offered limited support for a protocol called Q Signaling (QSIG), a standard for PBX signaling. But CallManager 4.0 expanded this greatly, letting CallManagers interoperate with a larger number of PBXs and support more features, such as caller ID and conferencing, across the platforms.
“Cisco’s story now is that they will use QSIG, analog gateways and whatever technologies they can to help customers migrate more slowly,” Riggs says.
This legacy integration will be important for the likes of Bank of America and Boeing, which have hundreds of old PBXs that must stay in service as the new gear is installed.
“This is not a big bang or forklift type of approach,” Boeing’s Naughton says. “We’re expecting this to be a five- to seven-year migration.”
Boeing uses more than 125 PBXs throughout its network. In its large manufacturing campuses and headquarters, carrier-class Class 5 phone switches from Lucent also are running.
“We’ve triaged these [PBXs and switches] into old systems, really old systems, and systems we absolutely have to do something about,” Naughton says. “We’re also being opportunistic about putting in new systems.”
That means any time a Boeing group changes facilities or moves into a new building, a Cisco IP PBX and phones will follow.
Hitting home with VoIP
One of the biggest challenges for large companies moving to IP telephony will be migrating very large campuses or headquarter sites. Typically, large IP telephony installations have involved replacing a few hundred or thousand IP phones at remote sites tied together via a WAN. The largest single-site and campus deployments of a Cisco IP network today is still Cisco’s 40,000-seat headquarter campus in San Jose.
Boeing says it won’t be turning on CallManagers on that scale for some time.
“We have not yet turned over any of our carrier switches in our large campuses,” Naughton says, and he is in no rush to make that change. “The way we hope to do this in larger sites is to work from the edge in.”
This means continuing to convert branches and remote offices to IP telephony and saving for last the big changeovers in the company’s Chicago headquarters and Seattle manufacturing campuses.
Changes in Cisco’s sales strategy also might help the company get the larger deals. Riggs says some of the perception in the industry that Cisco IP telephony gear was technically lacking might have been because of poorly installed systems by the flood of Cisco partners authorized to resell the telephony gear. Two years ago, Cisco revamped its training and certification requirements for channel partners and integrators to install Cisco IP telephony products.
“This got rid of some poorperforming systems integration companies,” Riggs says. “What was left was a smaller but stronger set of partners.”
Competition on notice
While Cisco’s Boeing, Ford and Bank of America deals certainly have put telephony competitors on alert, those vendors say they are not worried about these recent gains.
“Obviously one hates to see any big deal go to the other guy,” says Alex Pierson, general manager of enterprise business networks for Nortel.
Pierson says Nortel is evolving its IP telephony strategy to meet the needs of larger companies that might be getting closer to taking the IP plunge.
“Certainly, our initial strategy was to protect our installed base,” of PBX users, he says. Now, the company is more aggressively marketing all-IP products. It also recently introduced an upgrade to its Succession Communications Server IP PBX, letting it scale to 200,000 IP endpoints.
Pierson says Nortel’s customers are signing on to this, citing recent hybrid IP/TDM PBX deals with the state of Virginia and the U.S. Department of Defense.
Another competitor says there is still something to be said for having the ability to blend TDM and IP on one phone switch. According to Jorge Blanco, Avaya’s vice president of product marketing, the ability of his company’s products to support IP and legacy digital sets is still appealing to many customers.
It’s something Cisco still can’t do, which led to a large Avaya win at Merrill Lynch last year. The brokerage giant decided to replace the Cisco VoIP system it installed in 2001 with a mix of Avaya IP and digital PBX phones. Merrill Lynch said the pullback was because of security concerns about having all its voice and data applications running on IP.
Blanco says this hybrid approach “is much less disruptive than having to visit every desktop” and switch the phone from a digital set to IP.
“This also lets you get to convergence quicker without having to wait for a vendor to reinvent features and functionality that have been in place for years” on existing PBX products, he says.
