In order to get a better feel for what’s happening “in the trenches,”
we asked several leading vendors to share their views on the state of IP
telephony in the enterprise. Vendors responded to a number of questions
concerning IP telephony, the challenges facing their customers, and some of
the factors driving the deployment of IP telephony. Some of the questions
included:
- How is the enterprise market developing?
- What are some of the pressing telecommunications needs of enterprises?
- What are some of the challenges to implementing enterprise solutions?
- What are the applications that enterprises are looking for?
- What is driving enterprise customers to purchase IP-enabled systems?
- In this financially challenging time, with capital expenditures at
many companies “on hold,” what are some reasons that an enterprise
manager might want to consider IP telephony technologies now?
Their answers appear below.
NORTEL NETWORKS
Today’s enterprise is challenged to do more with less — demand for new
applications is coupled with reduced IT budgets.
Internet telephony plays a key role in long-term communications plans
that are reliable and secure, and ensure that employees are maximizing
productivity by using applications such as unified messaging, multimedia
contact center and self-service solutions, and wireless and remote office
applications. These services allow companies to utilize a geographically
dispersed workforce and improve customer service. Technology must drive
shareholder value by either lowering costs or driving revenue.
Enterprises can deploy Internet telephony without a huge outlay of
capital or a major operations disruption. Many companies are considering
IP-enabled systems to leverage existing infrastructures while offering the
benefits of new technology. These solutions allow enterprises to build a
flexible hybrid system that eliminates the uncertainty of a new technology
and its steep adoption curve.
The challenges enterprises face in implementing effective solutions
include: Assuring an evolution path to converged voice and data; assuring
QoS; leveraging existing investments while preparing for long-range needs;
and minimizing disruption.
Many corporations are turning to IP telephony technologies to realize
cost savings by consolidating infrastructure and eliminating toll charges,
to simplify network management, and to access new applications. When it
comes down to it, the business case is everything — enterprises’ ability
to compete in these economic times is driving them to look at ways to
implement technology for competitive and business-streamlining practices.
One approach is to move from two disparate networks into a more efficient
networking infrastructure.
– Greg Merritt, Vice President, Enterprise, Nortel Networks
TOSHIBA AMERICA INFORMATION SYSTEMS, INC.
Leading industry analysts predict a very positive forecast for the shipment
of IP-based systems over the next five years. In fact, Yankee Group is
estimating a jump from about 3 million units to be sold in 2002 to more than
14 million for 2006. There is no doubt that there will be tremendous growth
in the IP telephony marketplace, and that enterprises using traditional
circuit-switched telephones will have to evolve to meet the new value set
associated with IP as well as mobility.
Enterprises want telecom systems that allow them to be efficient, keep
them connected to their customers, and offer flexibility and mobility. In
fact, one of the real keys to selling IP systems to enterprise customers is
value-added applications, specifically those that enable mobility, unified
messaging, and CRM to help enterprises run their businesses more efficiently
and enable them to be more responsive to their customers.
However, one of the biggest challenges to an enterprise is the migration
from traditional to IP-based systems. Even if it’s a highly technical
user, the fact is that everyone is used to their traditional telephones, so
there’s always an adjustment period.
For an enterprise to make an IP purchasing decision, there must be
significant improvements to business practices and/or a reduction to the
bottom line. The solution must enable enterprises to be more competitive,
more efficient, and ultimately more successful. It absolutely has to fit the
way they work, or rather the way they want to work, and at the same level of
quality and reliability they’ve come to expect from their traditional
telephone systems. In today’s market, most enterprises also demand
investment protection. For example, here at Toshiba, every new system we
introduce provides a significant level of backward and forward
compatibility, thus ensuring good investment protection.
– Michael E. Durance, VP/General Manager, Toshiba America
Information Systems, Inc., Telecommunication Systems Division
NEC
NEC sees that enterprise is becoming more interested in deploying VoIP in
application-specific segments that make both technical and economic sense,
i.e., remote offices, new construction, converged applications, etc. For
example, in recent shipments of NEC’s NEAX 2000 IPS, 15 percent of these
shipments hold some degree of IP, higher than the industry average. In
addition, there is still a great deal of hesitancy in deploying IP
enterprise wide. The ROI is not strong, and most businesses are not
comfortable placing their entire communications system on one converged
network backbone without the benefit of the lessons learned from a gradual
deployment.
The most pressing needs for enterprise are to maintain the reliability
and functionality of their traditional voice platforms in an IP environment.
The failure of some vendors to maintain the user experience is one of the
biggest impediments to growing market share. Another concern among
enterprise is the notion that a business must change out its entire
infrastructure to deploy VoIP. This is a fallacy. For example, NEC’s VoIP
platforms can work within an existing infrastructure, such as Cisco, or, of
course, NEC’s own BlueFire system. But it should be the option of the
enterprise on what backbone to use. There is no need to forklift an entire
data infrastructure to deploy IP telephony. This is an important message
that the business community needs to understand.
We see the enterprise continuing to move, albeit slowly, to VoIP. Right
now, geographic necessity is what is driving interest in the market. But as
the technology continues to evolve, we feel there will be a stronger upswing
in IP deployments, though we think we are still several years away from
enterprise deploying IP telephony en masse.
– Jay Krauser, Assistant General Manager, NEC America
SIEMENS ENTERPRISE NETWORKS
The global slowdown forces companies to cut costs and increase operating
efficiencies. At the same time, customer expectations, increased
competition, and an increasingly mobile workforce require businesses to find
ways to improve their communications systems. The most pressing need for
enterprises is to simultaneously improve communications and cut costs.
Approaches to convergence range from doing nothing to embracing the
so-called “forklift” upgrade. The former means keeping existing voice
and data infrastructures separate, thus continuing multiple infrastructures
and application sets. The latter brings companies into the future in one
giant step, but requires them to jettison TDM infrastructure regardless of
its continuing viability.
The best options in terms of total cost of ownership often lie in
between. Siemens recently published a white paper detailing the five-year
overall ownership costs for five options:
- Buying a new traditional PBX;
- Keeping an existing PBX;
- Buying a new IP PBX;
- Buying a new IP converged system; or
- Migrating a traditional PBX to IP.
Based on a Forrester Research model assuming 10,000 users at two main
locations and 12 branch offices, the white paper concluded that latter
approach — migrating a traditional PBX to IP — offered the most
significant savings among all approaches. (The white paper can be found on
Siemens’ Web site at www.siemensenterprise.com/company/press_kit/index.shtml.)
Like infrastructure, applications play a critical role in the evolution
to IP. Businesses require applications that can span the TDM, IP, and
mixed-technology environments while increasing employees’ responsiveness
and facilitating knowledge sharing regardless of geography. The skillful
adoption of unified communications, teleworking, and personal call
management tools will increasingly differentiate the stronger players from
the weak.
Given the technology shift, the economic slowdown, and the ensuing market
opportunity for businesses in many sectors, technology must drive ROI. There
is no “one size fits all” solution. At the core of every convergence
solution is each enterprise’s unique value proposition.
– Mark Straton, Senior Vice President Global Marketing, Siemens
Enterprise Networks
VERTICAL NETWORKS
Recent analyst reports from The Yankee Group and Phillips InfoTech show
IP-PBX shipments continuing to exceed expectations. Since 1998, Vertical
Networks has seen customers adopting IP-PBXs and Integrated Communications
Platform (ICP) solutions, and each year the number grows.
Enterprises are realizing that large, centralized call centers are only
one piece of a complete solution to improve business or enhance customer
service. Many of Vertical Networks’ customers are looking to better
integrate branch offices into their existing customer strategy, and want a
system to be easily customizable to their business needs. Internet access,
high-speed computer networks, voice messaging, automated attendant features,
and call center functionality are all components required to remain
competitive and are now available in next-generation systems.
However, there is still a question about whether IP telephony is ready to
deploy as part of a customer strategy. Vertical Networks has answered this
in its own way by offering both a circuit-and packet-switched voice PBX in
its InstantOffice. This enables customers to decide when and how they deploy
voice over IP. Customers remain cautious about features, expectations, and
standards for IP phones, and many are taking a slow migration approach.
Cost/productivity and the ability to run customized business applications
are both key to enterprises choosing to deploy next-generation systems
today. Additionally, integrated broadband services are finally available
nationwide and companies are re-evaluating their data WAN and telecom
charges, especially for remote sites. Forward-thinkers are realizing that
there are millions of dollars to be saved in network service costs and are
looking at flexible systems that can grow with their company — and finding
that they can pay for these systems with the WAN and management savings
alone.
– Dean Schoen, Vice President of Marketing and Business Development,
Vertical Networks
TELCO SYSTEMS
VoIP, a hot technology in the carrier market just a few years ago, has lost
some of its momentum due to the capex issues that all service providers have
faced. However, advances in VoIP have made it a viable option in the
enterprise segment. This is especially true in the small-to-medium
enterprise environment where they are looking to provide big company voice
applications to their employees without the burden of equipment costs, real
estate, and management of traditional voice systems along with their
existing data network.
The sluggish economy has forced companies to get creative in reducing
spending and cutting operating costs to ensure continued success. A fast and
easy way to do this is to reduce telecom spending by consolidating voice,
data, and video. VoIP enables enterprises to dramatically cut network costs
by reducing or eliminating costly equipment like PBXs, reduced real estate
usage with integrated solutions versus overlay voice and data networks, and
by reducing personnel expenses with a single team to support the network.
As far as some of the challenges facing enterprises, deployment of a VoIP
solution within a closed LAN environment is not that difficult, the
challenge comes when they want to expand the capability to the WAN. There
they’re faced with the need for gateway equipment and maintenance,
gatekeeper control, and interoperability issues with their carrier’s
network for handling of VoIP traffic from their LAN. If they have remote
offices, a decision needs to made whether they’ll maintain them on
traditional DID or push their VoIP capabilities out to their field offices
so they can utilize the IP PBX.
Within the enterprise segment, at this time it is not applications that
are driving VoIP, but rather the cost savings that can be achieved by using
a single network architecture to provide voice services expected within the
company as if they had a true PBX located. By using a true IP-based network,
enterprise IT managers can introduce features to the desktop phone that
until now where not available, such as text messages and simplified unified
messaging. Consolidation of telecom/datacom services under a single
platform/protocol allows enterprises to eliminate costly overlay voice and
data networks, and the resources needed to management and support two
distinct networks. It also affords full-featured PBX functionality without
the cost associated with installation and maintenance of a traditional PBX.
– Dave Boulos, Vice President of Product Line Management, Telco
Systems
CISCO SYSTEMS, INC.
Enterprise IP telephony is here. It’s real. It’s happening. According to
a recent study from InfoTech, over 40 percent of U.S. companies with more
than 500 employees are converting their corporate phone systems from the
traditional PBX model to IP-based LAN telephony. With more than half of
Cisco’s 500 largest customers implementing IP telephony, we see the
momentum clearly building.
What is driving the adoption of IP telephony systems is that these
products are viewed as an integral part of an overall intelligent IT
investment strategy, with the ability to impact an entire organization.
Whether it’s e-commerce, supply chain management, CRM, unified messaging,
or other productivity enhancing applications, a converged voice and data
network provides the necessary foundation to decrease implementation time
and maximize an organization’s investment in new technologies for a
competitive advantage.
Customers are telling Cisco the reasons they are implementing IP
telephony are cost savings, flexibility, and efficiencies gained by
leveraging a single, resilient network. With one converged voice and data
network, executives are re-deploying IT staff to other mission-critical
projects and developing next-generation communication applications for an
open, IP-based system.
In terms of the challenges, recent economic fluctuations have made it
difficult for IT managers to justify the strategic and financial value of
converged infrastructures. Additionally, internal politics, cultural issues,
outdated perceptions, and incomplete product portfolios from traditional
voice vendors continue to make some decision makers delay their
implementation.
Nonetheless, organizations that press forward and stay focused on reality
are reaping the benefits of a converged solution today.
– Eugene Lee, Vice President of Worldwide Enterprise Marketing,
Cisco Systems, Inc.
AVAYA
Enterprise customers have begun to deploy IP telephony within small but
significant pockets of their respective end user populations. Massive levels
of adoption have been slowed down by lack of solutions that combine the
feature functionality, scalability, quality, ease of management, and
performance of traditional PBXs with a distributed, client-server
architecture. IP telephony has come of age for the enterprise — it’s no
longer a matter of if, but when and how enterprises will implement IP.
A sensible migration to IP telephony can create positive economic and
operational benefits for enterprises of all sizes. It enables efficient use
and allocation of network bandwidth, unified network management, enhanced
remote office communications, and emergency readiness capabilities. IP
telephony delivers broader and simplified access to end users, increasing
their productivity by blending communications capabilities with all relevant
sources of information.
Avaya has recently introduced a flexible, modular architecture that
brings familiar PBX features, applications, and value into an IP
environment. Enterprises of all sizes can now have more services available
to more people with less equipment. With this portfolio, Avaya enables
companies to add remote offices instantly; have any location or laptop look
and act like headquarters; as well as handle peak call volumes of up to
300,000 busy-hour calls.
Avaya sees there is no longer compromise in IP telephony. Companies can
now bring together disparate networks with minimal disruption to their
operations in a cost-effective way that adds little capital expenditure in a
time if tight budgets.
– Mickey Tsui, Group VP, Converged Enterprise Solutions, Avaya
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