VoIP: What you don't know could hurt you

Most big cost savings promised by VoIP vendors quickly fade away, but VoIP technology can help your organization shine.

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Last year John Lovejoy, CIO at industrial laser manufacturer Coherent Inc., had an IT staff that was all pumped up over voice over IP (VoIP) technology.

The Santa Clara, Calif., company was filled with costly, complicated private branch exchange (PBX) equipment, and VoIP looked like the way to go.

Lovejoy wasn't so sure. Rather than convert 2,400 worldwide users, he decided to test the technology starting with an 18-person remote office in Ely, England.

"All IT guys want to move quickly on the next big thing," Lovejoy said. "You don't want to dampen their enthusiasm, but you've got to protect the organization. We're going slowly to make sure it fits."

There are plenty of benefits to VoIP -- such as simpler and less costly support than PBX -- but there also plenty of reasons to be wary of it, according to industry analysts. First, it eats up bandwidth at a dangerous rate. Also, it can make systems vulnerable to e-mail attacks.

The Ely VoIP operation went live last month, and so far, it has worked. But Lovejoy is worried how VoIP will affect other operations on Coherent's network -- primarily the transactional data that runs on Oracle Corp. applications.

"I have some fears about affecting our Oracle users," he said. "If we put something on that same network like voice, and it slows it down, I'm not going to be very happy and neither will our users."

Lovejoy adopted his conservative approach to VoIP last year, when he attended an IT conference and met a CIO from a British bank who warned him about taking on a large VoIP project all at once.

The CIO told Lovejoy to forget the big cost savings promised by some vendors. He also told Lovejoy that VoIP phone sets have fewer desired features and capabilities than PBX phones.

Knowing this, Lovejoy is still convinced that VoIP will save on support costs when compared to PBX. VoIP technology eliminates costly and complex PBX hardware since VoIP uses simpler Ethernet cabling.

"We want to consolidate services and deploy a single infrastructure, which would be Ethernet wiring." Since Ethernet wiring already exists inside offices with computers, VoIP installation and maintenance can be simple.

A big benefit of VoIP is that it allows call center users to match data on their computer screens with incoming calls from customers, so they can see real-time customer profiles and data during the calls, Lovejoy said.

Coherent chose VoIP software from Avaya Inc., which also provides its existing PBX services. That allows Coherent to use its existing phones across the company, which saves money and training for new systems.

Currently, 35 employees in three Coherent locations are VoIP users.

Now the strategy is to roll out additional VoIP systems on a case-by-case basis. "If a PBX system was failing, that would drive the issue," he said.

Rikki Kirzner, a partner with Hurwitz & Associates in Waltham, Mass., said Lovejoy is right to have concerns about his existing network's ability to handle the additional loads imposed by VoIP.

"Nothing will eat up bandwidth like this, especially when it's added to other uses," she said. "With this technology, you want to take baby steps and you have to do capacity planning very, very carefully or you will destroy your network."

A recent VoIP survey showed 36% of 106 respondents would use VoIP in only parts of their companies, according to Michael Osterman, an analyst with Osterman Research Inc. in Black Diamond, Wash.

Another 27% of the respondents said they will eventually move entirely to VoIP. About 22% said they will only deploy VoIP in remote or field offices.

Osterman said new VoIP systems can make enterprises more vulnerable, "Make sure you have very good messaging security to prevent exploits that could occur with VoIP," he said.

This was first published in February 2005

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