Analyst: Talk is cheap but VoIP is cheaper

Moving to Voice over IP will help companies save money, but many users shy away from the technology because they’re concerned it will cost more to install than circuit-switched telephony equipment, according to a Toronto-based analyst.

Ronald Gruia, program leader for enterprise communications

at Frost & Sullivan Canada, said Tuesday many users aren’t aware of the benefits of Voice over IP, such as the lower cost of moving, adding and changing telephone extensions.

“”A lot of enterprises, especially in the small and medium space here in Canada, are not fully aware of the all benefits of IP,”” he said, adding many IT managers still believe IP telephony equipment is more expensive than time-division multiplexing (TDM) gear.

In a recent Frost & Sullivan survey of IT managers who have adopted VoIP, 40 per cent of respondents said they saved money on moves, adds and changes.

“”We don’t have to bother the technicians to go into the cabinets and rewire all the way back to the closet,”” he said. “”You just use an Internet phone, plug it into your Ethernet LAN and with the self-discovery mechanism you automatically rewire the network and the PBX.””

Gruia made his comments during an analyst round table discussion at IP World Canada conference, held at the Toronto Congress Centre.

He said about one-quarter of users who responded to the Frost survey said they are saving money by by-passing long-distance tolls, while 27 per cent reported lower staff costs and nine per cent said IP telephony is easier to maintain.

“”At the end of the day, it’s interesting that few mentioned employee productivity as a reason,”” Gruia said. “”They’re always focussed on the Opex saving.””

But some major telecom carriers cite worker productivity gains as a key benefit of IP services.

Michael Sabia, chairman and CEO of BCE Inc., said during a keynote address, dubbed Delivering the future Through IP, that IP services will let companies to do things they aren’t able to do with TDM systems.

For example, he said, IP networks will make it easier for different types of devices — such as phones, handheld computers and pagers — to connect, and for employees to connect to the network from outside the office.

“”IP will change the way your employees interact with each other and with customers,”” Sabia said.

Several examples of IP applications were provided by speakers from Bell and other carriers during an IPWorld Canada conference on the enterprise benefits of IP.

For example, one of Allstream’s health care customers uses an IP network to update medical records across its network, said Ron McKenzie, Allstream‘s executive vice-president of marketing and business development.

But Allstream’s president, John A. MacDonald, warned IP has its pitfalls.

“”IP giveth and IP taketh away,”” MacDonald said during a keynote address Tuesday, titled Intelligent Infrastructure: Enabling New Services of the Future. “”There’s a lot of things that need to be done”” to ensure customers get acceptable quality of service.

Companies want Ethernet services over a wide area, and they expect their carriers to protect their phone systems from security breaches, MacDonald said.

“”If anyone out there is selling you IP infrastructure and doesn’t have the wherewithal to understand security, don’t buy from them,”” MacDonald said. “”If there’s a denial of service attack on your desktop, your phones still have to work. Your call centres still have to work.””

Allstream Tuesday announced its Network Resident IP Telephony Service. Sold through local service providers, the service will provide voice, as well as unified messaging, conferencing and visual call management. Hamilton, Ont.-based Mountain Cablevision will be the first to provide the service.

Whether voice services are delivered over a circuit-switched network or an IP network, what matters to users is how well the technology works, Gruia said.

“”At the end of the day, enterprises don’t care what technology is deployed,”” he said. “”What they care about is the bottom line. They want to see savings. “”

The same goes for consumers, said Mark Quigley, research director for the Yankee Group‘s Canadian market advisory services.

Quigley, who also spoke on the industry round table, said residential customers don’t care whether their voice service is delivered over IP or over the plain old telephone systems (POTS).

“”For most consumers, IP is a verb and POTS sit underneath the counter in the kitchen,”” he quipped.

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