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| Voice and Data |
January 1, 2001 |
By Sandy Fife
Last August, Algonquin College in Peterborough, Ont. moved to the head of the class in telecommunications creativity. It installed an integrated voice-data telecom system in two of its new buildings: a student residence and an institute for security and police training. Students and faculty in these buildings now have special phones from equipment provider Cisco Systems Canada of Toronto.
Their phones are plugged into and powered by data jacks. Their PCs are plugged into their phones. The system allows them to chat with a friend while high-speed browsing the Internet, or consult with an Algonquin customer service representative who is working on the same page on the college's interactive Web site.
Internet telephony, usually associated with spotty transmission and poor sound, is finally coming of age. It won't sweep the country overnight, but quality and reliability have improved to levels that make integrated voice-data communications practical. As a result, many organizations, like Algonquin, are quietly installing Voice Over Internet Protocol (VOIP) systems for internal use. They're attracted by the convenience and potential savings of managing and maintaining one system, as well as having the advantages of integrated voice, data and eventually even fax and video communications.
In a decade or so, say experts, Internet Protocol ( IP ) technology will be everywhere and businesses and consumers will be gabbing with each other over data lines. "The day will come where there's one system," says Dan McLean, a network analyst with IDC Canada Ltd., a Toronto technology research firm. "Major hardware makers like Nortel and Cisco say they're investing everything they have in this thing. These aren't stupid companies."
(Indeed, Brampton, Ont.-based Nortel Networks Corp. recently won a contract with Britain's Cable & Wireless PLC to handle the transfer of their public voice network to Internet protocol. The changeover will cost $1.4 billion over 10 years.)
Before opting for the integrated voice-data system, Algonquin College looked at the traditional telecom solution: separate voice and data systems. But Bell Canada and Cisco proposed a brand-new VOIP system, Cisco's Architecture for Voice, Video and Integrated Data system (AVVID). Since the phones had barely begun rolling off the assembly line, the college set several conditions for the untried equipment. "It had to work, be cost-efficient and deliverable," says Barry Brock, Algonquin's director of technology services. "And the voice transmission had to sound like normal - or better than normal - telephone communications."
The Cisco system - the same one that mail-order giant Land's End of Dodgeville, Wis. uses - met all the conditions. It has been in service for only a few months, but Brock says heÕs very satisfied with its performance so far. And although Algonquin has yet to achieve any savings from it, Brock expects that will change as equipment prices decrease and the college expands the system from the current 550 connections. (Brock will not disclose specific cost information.)
Internet telephony's strengths and weaknesses compared to traditional telephony, are due to the differences in the way the two technologies handle voice transmissions. Traditional telephony works by transmitting a continuous string of analog voice signals over a single circuit that is tied up for the duration of the conversation. Internet telephony works by converting conversations into numerous digital data packets that are individually routed over the Internet, travelling over many different circuits before they are reassembled and converted back to an analog voice signal at destination.
A so-called "Internet gateway device" converts the voice signal to data and back again. The gateway device can be located between a traditional Private Branch Exchange (PBX) - the switching centre that allows employees to make and receive phone calls - and a firm's data system. This allows firms to retrofit for Internet telephony without rewiring by creating a hybrid voice-date system. Alternatively, it can be an integral component of a voice-enabled data system, as at Algonquin College, where voice communications are handled by a switch and server on the data network.
Internet telephony started out as a way for thrifty consumers to route long-distance calls over the Internet and avoid paying long-distance charges. They got what they paid for; quality was abysmal.
Until very recently, it was still one of the biggest stumbling blocks in the adoption of VOIP for business purposes. Internet protocol chats were choppy, with lots of static and dead spaces. "Legacy datacom gear is much cheaper than voice equipment," says McLean. "Voice equipment gives much greater performance in terms of quality and reliability."
But datacom performance is improving rapidly, thanks to increased bandwidth and more sophisticated VOIP technology and equipment. Algonquin's new AVVID system recognizes voice communications and automatically gives them priority over data transmissions, thus ensuring that users experience the same quality as they would with a traditional voice system. Other equipment makers, such as Nortel, Lucent and 3Com, are rushing to bring competing systems to market.
Better quality and reliability notwithstanding, businesses are unlikely to rush out en masse to replace their legacy voice and datacom systems with spanking new integrated ones. In today's deregulated market, the long-distance savings that Internet telephony offers are insignificant. True, managing and maintaining one network offers significant cost efficiencies, however most organizations won't invest in a VOIP system until their legacy networks require replacing. Nevertheless, start-ups and established businesses that need to replace aging data and telecom systems are beginning to install integrated systems for internal use. Service providers and equipment makers are rushing to stake their claims to a piece of the new market. And they predict that convenience and new applications will play as big a part in driving its growth as cost savings.
With traditional PBX systems, it can take a full business day to effect a subscriber move, addition or change. But with integrated systems such as Algonquin's, the subscriber can plug into any data jack on the system and the calls will automatically be routed to the new location. "From the customer's perspective, the administration of our systems is very easy," says Rod Weir, AVVID solutions manager for Cisco Canada.
According to Gregg Astoorin, Nortel's director of Internet telephony, VOIP will take off where it improves existing services. "The benefits for business are in multi-media integration - integrating voice with Web pages, video and so on," he says. "Right now, it's still the early adopters who are installing integrated systems. But in two to three years, most new purchases of telecom systems by businesses will be Internet protocol systems."
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Web Connections
Algonquin College http://www.algonquinc.on.ca
Cable & Wireless PLC http://www.cw.com
Cap Gemini (E&Y) http://www.capgemini.com
Cisco Systems http://www.cisco.com
Ernst & Young http://www.ey.com
IDC Canada Ltd. http://www.idccanada.com
Land's End http://www.landsend.com
Lucent http://www.lucent.com
Nortel http://www.nortelnetworks.com
3Com http://www.3com.com
Is Internet Telephony for Your Firm?
One of the main drawing cards for Voice Over Internet Protocol (VOIP) or Internet telephony, is savings. It will cost businesses much less to manage and maintain one integrated system than separate voice and data networks - or so the reasoning goes.
In fact, for most companies, the savings aren't yet available. That's only partly on account of the capital costs of decommissioning prematurely and replacing legacy systems. There's also the fact that VOIP systems do not enjoy the price advantage over voice infrastructure and equipment that datacom systems have.
VOIP technology is relatively pricey. For one thing, it is very new. For another, it is being built to approximate the exacting performance standards of voice systems in order to avoid the reliability and quality problems that traditionally plagued Internet telephony and deterred business from adopting it.
The consulting firm Cap Gemini Ernst & Young tells its clients to consider how Internet telephony fits with their business before taking the plunge. "Whether it's for your firm or not depends on how many remote workers you have, and how many people you've got on the go," says Doug McCuaig, Toronto-based vice-president of e-business services. "If you have a large mobile sales force, wireless may be more appropriate. If, however, your employees are not on the road a lot, VOIP may be a good solution."
VOIP may also be appropriate for firms with a large contingent of home-based workers who come into the office only occasionally and "hotel" at any desk that's available. Employees can plug their personal communications devices - phones or laptops - into any data jack, and an intelligent VOIP system, such as Cisco's, will automatically route their calls to them. Ernst & Young, the accounting firm associated with Cap Gemini, fits this profile. It's no coincidence that it has recently rewired for VOIP.
Beyond the nature of your business and workforce, you'll want to consider a couple of other factors: one is the life expectancy of your current voice and data systems. If one or the other is approaching obsolescence, think about rewiring for VOIP, McCuaig advises. Telecom service providers believe VOIP will supersede traditional voice-only telephony within the next 10 years. So, it makes sense to lay the groundwork for conversion if your current infrastructure needs to be replaced anyway. Similarly, if you are just purchasing telecom for a new business or for expansion of an existing one it makes economic sense to go VOIP.
The other factor to take into account is whether or not you need the bells and whistles that VOIP equipment makers are touting. Ask yourself these questions: Do you foresee your employees using their phones as browsers? Will customers use the "talk now" option on your interactive retail Web site? Will your company be doing frequent videoconferencing? Or will you want to outsource IT management to your service provider?
If the answer to any of these questions is "yes", you may find VOIP irresistible. But if you don't need the kinds of features and applications that offers, you can wait to merge your voice and data networks until the competitive environment forces you to do so - or until infrastructure and equipment prices dip to a level that's cost-efficient for your business.
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