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Rich Tehrani

[February 4, 2004]

The Future Of IP Telephony: A Panel Discussion At INTERNET TELEPHONY Conference & EXPO



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Panelist Christopher Labrador of Toshiba Digital Solutions 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. With the economy turning around and enterprises looking to upgrade their systems, we will see continued growth in IP in the enterprise space.  A primary motivator is the fact that a lot of enterprises were waiting to upgrade, and now they want the latest technology, which is clearly IP.  As well, IP technologies are maturing, helping to eliminate some technological shortcomings, and this makes enterprise users more confident in making the move to IP.

In the service provider space, adoption IP is rapidly increasing.  In the late 90s/early 2000s, service providers significantly revamped their physical infrastructure.  More of the incumbent service providers are now moving to IP technology to deliver the seamlessness their users want.  We see service providers making an aggressive move to IP.

Because of these two things, carrier space acceleration and enterprises upgrading, we expect a move toward an end-to-end IP network.  It�s a wholesale upgrade of the entire communications network.   

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. Initial costs for IP telephony systems have been traditionally higher than legacy systems, but now costs are coming down for IP.  Differentiated IP products are now available at lower costs due to competitive pressures. 

Enterprises can also see that IP systems have a lower total cost of ownership over the life of the system.  Operating costs go down since administration is easier.  For example, adds, moves, and changes costs virtually disappear since users can simply plug their IP phones into any Ethernet port and it works right away, requiring only the seconds it takes for the equipment to register on the network.  There�s also the advantage of toll savings. While the delta between toll bypass savings vs. traditional long distance tariffs has decreased, there still is a savings.

A big productivity benefit to IP telephony is mobility.  Since your phone can be on your laptop (using a softphone), and you can use an IP phone anywhere you have a cable or broadband connection, such as at home, your can work anytime, anywhere. This gives you all your office phone features remotely, yet you are answering your phone just like you would at work. 

Other productivity advantages are the ability to surf the Web, stream data across your screen, and access corporate and public directories that are difficult (if not impossible) to do with a legacy phone system.  Phones can also be set up to access the back office to check on things such as inventory or other items that register as a discrete event, allowing information to be brought to you via your IP desk phone.

IP affords your phone to be more than a phone � it can be dynamic, read the news, provide alerts, and much more since it can be tied to applications on the Internet. XML, HTML, JAVA supported phones let you leverage the Internet with your telephone without the need for any other processor.  Your phone can literally be a dashboard for your business.

System adaptability and flexibility further enhance the productivity of the user and the enterprise.  Providing this kind of capability affords a �killer enabler� for enterprises to do business the way they want to.  This is something we are delivering here at Toshiba.

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. To succeed, IP telephony systems must deliver the features and functionality users expect.  Users expect to get what they already have plus a lot more, but a pitfall of many IP telephone systems today is that they are delivering subsets of what the users have or expect. IP is, without question, the future of telephony, but we can�t ignore the richness of the applications on the voice side.  We need to take it along with us as we move to IP.

You also have to help customers migrate.  A strong migration program that helps customers protect their original investment in telephony, such as the program that we offer at Toshiba, is essential to being successful in upgrading the customer base.

Toshiba can deliver on the full feature set of what they have today and give them the flexibility to adapt for their needs tomorrow.  Part of our success in moving customers to IP is our authorized dealer network.  We train them so they can sell to new customers and upgrade our existing customers. After all, companies are successful because they add new customers, not because they abandon old customers � bringing existing customers along is paramount to success. 

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Rich Tehrani is TMC's president. He welcomes your comments. Participate in our forums.

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