|Intranet Telephony: The Next Trend
In IP Telephony
BY MIKE KATZ
Here's a prediction for 1998: It's the year that intranet telephony takes off.
Intranet telephony is the application of IP telephony gateways to carry telephone
traffic between multiple corporate sites using a data network. It is the beginning of an
evolution that will affect corporate telecommunications from the mid-size distributed
business to the largest multinational conglomerate.
Intranet telephony is part of the larger IP telephony market space that includes
Internet telephony, which -- depending on your view of how the Internet performs -- can be
either good or bad. Intranet telephony makes use of the same technology originally
developed for IP telephony solutions, PSTN interfaces, speech compression, IP packet
protocols, and standards like H.323 to help interoperation of disparate solutions. The
major difference is how the end IP Telephony gateway applies these technologies and the
capabilities of the corporate Intranets, in terms of managed bandwidth.
The value proposition is also different. Today's corporate telecommunications needs can
be met with a combination of IP telephony gateways and servers that enable PBX-like
features. The separate value propositions of computer-telephony integration (CTI) and IP
telephony can be linked together, creating a new, more valuable proposition. This
proposition is based on a corporation's desire for better internal productivity, customer
satisfaction, and corporate cost savings delivered through better use of existing
facilities and new applications. This year's crop of intranet telephony solutions promises
this and more.
Let's examine some of the basic tenets of this argument. Why are major corporations
seriously examining the benefits of IP telephony use within their corporate intranets?
It's simple: Cost containment. Let's assume you're managing 50 separate manufacturing,
research and development, and corporate sites -- all with phone systems that need to be
connected together. Today you've got two networks connecting each site: one is a
data-oriented intranet, and one is a voice-only network. It is obvious that running two
parallel networks -- one for data and one for voice -- is not cost effective. You need
only look at the current cost for a long-distance call across the PSTN of $.08 per minute;
that rate may not appear high, but it's no match for free or -- at minimum -- a constantly
declining rate as more calls are made.
However, to reap these cost savings, corporations must spend money on purchases of new
IP telephony gateways. Currently, some vendors claim that the investment can be paid off
in less than 3 months. There are products on the horizon that are expected to drive the
rate of return for intranet telephony to less than 1 month. Major PBX manufacturers such
as Siemens, Nortel, and Lucent; major internetworking vendors such as Cisco and Bay
Networks; several large Internet service providers (ISPs); 80 percent of the PTTs; and 100
percent of the IXCs: They have all announced their intentions to field a product, a
service, or a series of IP telephony trials.
Internet telephony (as opposed to intranet telephony) has been around for over two years.
Derided for poor voice quality and annoying delays, its biggest shortcoming has been that
data networks break speech into little packets so it's possible for some packets to arrive
out of order or too late to be included in a conversation. Another issue is the lag time
inherent in the Net. Speech packets have to travel through a dozen or more routers, which
direct them toward their destination, and each router takes a split second to do its job.
In general, intranet telephony overcomes all of the negatives mentioned via the
application of a managed network.
A managed network is one that has predictable performance measured in terms of Quality
of Service or Quality of Transmission guarantees. These guarantees are usually made around
latency (that is, the time it takes to pass an IP packet from one point in the network to
another point) and the ability of the network to move large amounts of packet traffic
without dropping or losing packets. QoS or QoT as these performance guarantees are
referred to, are the backbone concepts in a managed network. Managed networks will provide
IP telephony applications the predictability of performance that they need to be
successful within a corporation. A managed network can be created out of existing network
infrastructure; for example a corporation's data network backbone. These networks are
usually frame relay, circuit switched, or ATM-based. The facilities cost is fixed, the
operating performance guaranteed, and the savings are greater than creating the same
network using the traditional PSTN.
For this to be the year that intranet telephony becomes a truly viable product, call
transparency or robustness must be a feature of IP telephony gateway solutions. Corporate
users must not know the difference between an IP telephony call and a PSTN call. The
intranet IP gateways must be able to gracefully fall back to the PSTN while a call is in
progress. The current crop of IP telephony gateways do not yet have this capability, which
means that callers must hang up and re-dial over the IP network or else move the call to
the PSTN by dialing another number. From the caller's perspective, this is both
inconvenient and annoying.
This year will see intranet telephony solutions introducing a new set of applications to
the market, such as call completion and control applications as well as extensions to
intranet telephony such as the addition of unified messaging. Advanced applications could
include intelligent call management and routing, telecommuting, and meet-me, page-me, and
follow-me applications. While these applications may not be new to the market, their
delivery via an IP telephony gateway would be.
Real corporations are implementing intranet telephony solutions today. Take as an
example a large agricultural equipment manufacturer that believes in IP telephony
technology. The company is using it to improve communication internally and with other
divisions and connected suppliers. If a supplier ships a faulty part, an employee can call
the supplier, discuss the situation with the supplier, and explain what needs to be
changed - all over the same corporate intranet/extranet.
Intranet telephony is going to be big business this year because it has real business
rationale, guaranteed customer payback, and it is technologically sound.
I'd say it's intranet telephony's year.
Mike Katz is vice president of marketing and business development at NetPhone, Inc.
Headquartered in Marlborough, Massachusetts, NetPhone is a leading provider of computer
telephony solutions for small business environments. For more information, contact the
author at [email protected].