VoIP

VoIP: Ready for Prime Time?

Perhaps it's time for independent ISPs to stop complaining about the Bell's business practices and start taking away their most lucrative accounts—enterprises that need cost-effective IP voice and data services.

by Jim Thompson [February 25, 2002]

Voice over Internet Protocol (VoIP) is one of those technologies that are being talked about, as the "next big thing" in the tech world, but which, so far, has not achieved that loft status. Few doubt its potential, but many still ask the perennial question, "is now the right time to jump into VoIP?"

"In survey after survey we have found that most companies are currently running only a handful of their traffic over IP with the majority of their calls using traditional voice technology," said Galen Schreck, Analyst for Forrester Research.

The idea of VoIP is certainly alluring. Most point to eliminating long-distance toll charges as the main reason for moving their phone system to IP. But that's just the beginning of the potential benefits of the technology.

Versatile voice
"The focus has definitely shifted to things other than toll savings that can be done with VoIP," noted Schreck. "Things like extensions at employees homes, not having to put PBX hardware at branch offices, higher quality, video conferencing, and follow-you-roaming are all things that are driving the market now."

VoIP can be the core of a complete makeover of a company's customer relationship management (CRM) strategy. For Internet service providers, it can boost sales, strengthen customer loyalty and create new revenue streams.

As any successful ISP operator knows, keeping in contact with customers and making them happy is 90 percent of their business plan. The Forum Corporation reported that the average business looses between 15 to 35 percent of its customers every year and nearly 70 percent of these losses are a result of poor customer service.

If a customer isn't happy, you can bet he'll switch to another service provider faster than former Enron Chairman Kenneth Lay can take the fifth amendment. Setting up an efficient call center can help savvy ISP operators keep customers already in its fold—and help add new ones in the future.

For the enterprise, one of the main cost savings benefits of VoIP comes from being able to eliminate the traditional hardware-based telephony switch by replacing it with a far less expensive, and more versatile, IP-based software contact-routing application.

The IP-based call center is also much easier to deploy than a hardware telephony switch with Web capabilities. By having a single, integrated network, the enterprise can save additional money on equipment and maintenance.

A VoIP system also allows customer inquires to be handled whether they come in via phone, the Web, email or fax. It can also open the door to combining voice, data, wireless, e-mail, graphics and video into a single CRM system. The result is a more efficient use of resources, a better chance of solving a problem the first time around and, ultimately, a happier customer.

Slow out of the gateway
Despite all the benefits, VoIP is still not widely deployed. The Gartner Group warns that VoIP "remains an emerging, evolving technology, and the transition to it will come gradually." In their view, IP telephony won't be a reality for most companies for another four years.

VoIP is still a relatively new technology and as such, suffers from many growing pains. Security is a primary concern since IP calls are readily intercepted. But some say security is a not serious concern because even if a voice call is hacked, there is very little possibility of the loss of serious data—like a credit card number.

"Anyone who thinks that sensitive data is not transmitted via voice must be from another planet," said Ray Muller, an ISP based in Los Angeles, California. "Credit card numbers, financial account numbers, and schedules that can tell you when someone is not going to be at home are just some of the things a hacker could get from a voice conversation. Voice is just another type of data."

Several companies have already addressed the issue of security and there are a number of available security methods that do work. However, the general perception still remains that if you have an IP-based system, it's not secure.

Another stumbling block for VoIP is the perception that its impossible to find someone and then initiate a call on an IP system, making it difficult to decide if a call should be routed via a PBX, a VoIP gateway, or over the connected network.

More than a year ago the Internet Engineering Task Force (IETF) addressed this issue with a protocol called "Enum." The protocol provides a standard way to build directories that list, not only, IP telephone and email addresses, but also cell phone and fax numbers within IP networks. Session Initiation Protocol (SIP) is another developing standard that can signal the start of a VoIP call.

Wait and see outlook
Even though VoIP is here today and does present several immediate benefits over conventional voice technologies, most businesses are still taking a cautious approach to its implementation. This is never a bad idea, especially at a time when money is tight, investors are running scared and customers are looking for the best deal at the best price.

For the enterprise, before jumping into VoIP, better make sure the network itself is stable and that you have enough bandwidth to handle the additional load. If your network already has problems, adding an additional function like VoIP certainly won't make things better.

While a VoIP system that uses the public Internet is an option, and may be the right solution for very small businesses or home applications, it will be far too unreliable for most business customers. For companies that don't have their own WAN, many service providers can offer the use of their own private network to insure both higher reliability and increased security.

"For a business, relying on the public Internet is a disaster waiting to happen," said Muller. "I always recommend to businesses, large and small, that they go with a private network."

For the ISP owner who is thinking about offering VoIP as a value-added service, better make sure that you not only understand the problems but also have the technical staff to handle anything that can, and will come up.

For most customers, the biggest headaches with VoIP come in the first few weeks. Part of the difficulty is the technical challenge of getting everything to work properly. Another concern is training in-house staff. A good ISP deployment strategy anticipates potential problems and addresses them before customers develop wanderlust.

"An ISP, or anyone who wants to move to IP telephony, should be concerned primarily with quality," warned Schreck. "A network that is engineered for data is very different from the quality needed for a voice stream."

It has been a slow road in the move to VoIP, but most experts agree that this is the future for voice traffic. "A key sign of this direction is that all of the major PBX vendors, who had been fighting IP tooth and nail, have all come out with systems that can be a traditional PBX or an IP PBX or anything in between," said Schreck.

—End