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Panelist R. Pierce Reid of Qovia answers our questions:
Q. IP Telephony's market share is increasing. What are your
predictions for continued growth of IP Telephony in the Enterprise space?
What about in the service provider space?
A.
Clearly, the enterprise
space is the proving ground for VoIP and Internet Telephony. Enterprise
installations are growing at a tremendous rate as Internet Telephony not
only brings savings through convergence, but offers businesses and
government users the productivity increases that are needed to stay
competitive in today's 7 x 24 economy. As more and more
enterprises adopt
VoIP technologies, this will bring the costs down further and make the
ROI of Internet Telephony even more attractive.
As this rolls out, however,
we will see a tremendous reliance on Hybrid systems -- with "Islands of VoIP" deploying in company divisions, branch offices or departments. To
date, it has been very painful for companies to do a complete
replacement of their "traditional" phones. So VoIP Telephony hardware
and systems are going to have to work well in a hybrid environment.
There will also be a tremendous need to pull together disparate
equipment (from many vendors) as enterprises move more completely into
VoIP.
Counter to years of predictions that
"Internet Telephony will make the Phone Company Obsolete," VoIP is
clearly on the horizon for carriers with all the major Long-Haul and LEC
carriers embracing the technology. Currently, a number of carriers are
acting as VoIP managed service providers for their enterprise and small
business customers. From this beachhead, they will certainly move into
the residential market and watch for consolidation of hot "consumer"
VoIP companies into larger telecom entities in the years ahead.
Q. How do IP Telephony systems compare to
legacy systems on a cost basis? Does it make financial sense to move from
legacy systems to IP telephony? And what of the "soft" cost savings
(productivity, ease of use)...? What impact does that have on the decision
to adopt new technology?
A.
Cost has long been the
rallying cry for VoIP. But costs come in many shapes and sizes. It
definitely makes financial sense for a lot of enterprises to move to
VoIP, not only as their legacy phone systems reach end of life, but to
take advantage of the productivity increases that VoIP delivers. For
enterprises (and this includes departments and branch offices) that are
highly dependant on their phone systems and, especially, for government
agencies, VoIP makes sense immediately. For the rest, as economies of
scale bring the costs down, VoIP will make sense. Currently, there is
probably not a single enterprise out there that isn't at least
considering VoIP as they look to upgrade their legacy phone systems.
The other thing that has to
be taken into consideration is the long term cost of owning a VoIP
system. Like data networks, VoIP phones don't just run themselves.
They require the same "care and feeding" that complex data networks have
long required -- with the added complexity of the critical nature of
Voice. If your e-mail if 5 seconds late, it is irrelevant. If your
voice packet is 1/10 of a second off, it is noticeable to everyone. As
companies move to VoIP and put the responsibilities for managing the
phone systems into the hands of their IT teams, the cost of reliability
(and the greater costs of lack of reliability) are a key consideration.
Q.
What
are some of the specific steps the industry needs to take in order to
ensure continued growth and user adoption of IP Telephony? What are some
potential pitfalls and how should they be avoided?
A. Maintaining call quality and network reliability are
critical. Internet Telephony didn't take off in 1995 because it was,
essentially, an unreliable toy for Internet hobbyists who were happy to
shout at their PC screens in order to get some free long distance. But
that isn't enterprise strength! This time around, the core equipment
from key vendors like 3Com, Cisco, Nortel, Avaya, NEC and others is up
to the task. But VoIP networks don't just run themselves and the
creation and availability of tools to manage those networks is key.
The industry is also going to have to
manage its relationship with the regulatory community. So far, it has
dodged bullets through the successful Vonage court case and through
Michael Powell's FCC declaration that they were giving VoIP room to
grow. Treating VoIP like the Internet is a good thing for the industry
right now and we need the room to grow and establish a foothold without
a patchwork of regulation across the US. However, regulation will keep
coming up. Unlike the "traditional" Internet which moved into virgin
territory, VoIP is moving into one of the most regulated areas of
American Society.. telecommunications. With Federal, state, municipal
and even local regulatory boards covering the phone system, the industry
should be prepared to work with the regulatory agencies to ensure its
long-term success. One area that the industry should pursue: Federal
preemption to have VoIP regulated only at the Federal level, so we don't
have to face a patchwork of legislation from across the US. Remember,
government can do things for you... or do things to you. The industry
needs to work with government to make sure we everyone wins.
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Rich Tehrani is TMC's president. He welcomes your comments.
Participate in our forums.
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