VoIP: the promise and the pain

"Our branches had every type of phone system imaginable," says Stan Adams, SouthTrust's group vice president of voice and data. With 730 branches and 13,200 employees, SouthTrust, a regional bank based in Birmingham, Ala., had been growing through acquisitions since 2000.

Free IT resource TechNet: More ways to know it, share it, and keep it running. Sponsored by Microsoft Free IT resource Attend the SOA Executive Forum: Breaking SOA Bottlenecks SOAExecForum.com/may2007 Sponsored by InfoWorld DOWNLOAD PDF Click here to download InfoWorld's special report VoIP

"Dealing with all those maintenance programs was turning into a major management headache. We were about to upgrade all our branches to T1s and switched 100Mb anyway, so we decided to build a converged IP voice/data network that would let us manage all our voice and data services centrally from Birmingham."

Now all of SouthTrust's sites are populated with IP-based phone handsets connected over the data network to a few Cisco CallManager IP PBX server clusters in Birmingham, which are in turn backed up by another CallManager cluster in Atlanta. "The CallManager clusters manage call setup, voice mail, and long distance for all our sites," Adams says. "The savings we've seen from centralized management are incredible. And now we can take advantage of cheaper high volume long distance rates and bypass long distance tolls on the branch WAN connections."

SouthTrust's story is a great example of how far enterprise VoIP (voice over IP) has come in the past few years. The consensus is that VoIP, which describes many different scenarios for running call control and digitized voice traffic over enterprise IP data networks, works. "The early issues of voice quality, quality of service, scalability, migration, features, and functionality in enterprise IP phone systems have pretty much been solved," says Jorge Blanco, vice president of marketing at Avaya, a major player in both the legacy TDM (time-division multiplexing) and IP telephony market. Steve Blood, research vice president at Gartner, agrees. "You can now choose from a host of VoIP integrators such as IBM and [Hewlett-Packard] and service providers such as Verizon that have real expertise and track records deploying VoIP in the enterprise." Verizon typically acts as an integrator and then takes over management of customer-based VoIP equipment. Many carriers also offer an IP form of Centrex to small and some midsize businesses.

Perhaps even more exciting than cost savings is the promise VoIP holds for enabling true converged voice and data applications. Instead of being the separate silo that it has been up until now, voice is on the verge of becoming simply another network application that can integrate with other real-time applications -- such as instant messaging, presence, and Web and video conferencing -- to enhance collaboration among geographically dispersed workgroups or partnering organizations. VoIP can merge with Web, e-mail, live chat, and phone interactions in a multimedia contact center that greatly improves customer service. And VoIP has the potential to integrate with ERP and other enterprise applications to speed up approvals that used to stop business processes in their tracks.

VoIP Under the Hood

Unlike residential VoIP, enterprise VoIP is not simply about making cheap international calls over the Internet. Instead, it aims to replace the proprietary PBX phone systems and dedicated voice networks enterprises have relied on for years with standards-based call processing servers or appliances that run digitized voice and call control over the packet-based IP data network. Also known as IP PBXes, these servers provide most or all the features of their legacy PBX predecessors and connect over the LAN or WAN with IP-enabled phone handsets. IP handsets look and function exactly like their legacy predecessors, but VoIP vendors have recently added more PC-like features, such as color displays, Web surfing capabilities, and limited access to data applications in some models. IP softphones provide the same handset capabilities in software installed on a PC, notebook, or sometimes even a PDA.

In addition to phones and IP PBXes, an important component of VoIP systems is the gateway, which is used to translate between IP and the TDM scheme used by legacy PBXes and the PSTN (public switched telephone network). Gateways provide the translation necessary to add IP phones to a legacy PBX, to connect two legacy PBXes over an IP WAN, or to provide an IP PBX with trunks to the PSTN.

Click for larger view.

Most IP telephony systems support a collection of standards from the ITU (International Telecommunications Union) called H.323, which defines how the different elements of an IP telephony system interact. H.323 includes a number of voice compression standards. A competing, up-and-coming standard called SIP (Session Initiation Protocol) comes from the IETF and approaches VoIP more from an Internet perspective. SIP can serve as standard for other Internet applications such as instant messaging, chat, and multimedia messaging as well and is expected to be a major force driving converged applications. More and more VoIP vendors have started to support SIP, as has Microsoft in Windows Messenger.

With maturing standards and broad industry support, there's no question that enterprises are taking VoIP seriously. According to a Meta Group survey of 276 North American companies, 62 percent of midsize enterprises and 63 percent of large enterprises (with 1,500 or more employees) have implemented some form of VoIP. "It's widely accepted that everyone will convert to IP telephony," says Lon McCauley, director of network services at IBM Global Services. "The only question is when."

The $64,000 Question

"When?" turns out to be a pretty big question, because the reality is that, unlike SouthTrust, many enterprises are still in the VoIP pilot stage or have implemented VoIP in some parts of their infrastructure but not others.

Why the hesitation? A primary reason is that many of the dramatic savings vendors have promised to IT haven't panned out. Early in the VoIP game, it was thought that routing voice calls among company offices over the data network would produce significant savings in long-distance bills. Then business long-distance rates plunged. "When you can get long-distance rates of less than 3 cents a minute, what's the point?" Blood says.