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As IP telephony matures, more CIOs buying into the technology

Maturing IP telephony technology, specifically VoIP, is making its way into more and more businesses while outdated PBX systems (although tried and true) are being shown the door.

Lured by the whiz-bang features of Voice over Internet Protocol (VoIP) -- and, of course, improved quality and reliability -- businesses are ready to give up private branch exchange (PBX) and switch to IP telephony -- albeit with some reservations.

It makes us a bit nervous because we wonder why the quality issues are still so persistent and prevalent.
John L. Petry
IT managerMettler-Toledo Hi-Speed Inc.
"It looks like the technology is finally mature and reliable enough for our business," said John L. Petry, IT manager at Mettler-Toledo Hi-Speed Inc., an Ithaca, N.Y.-based manufacturer of precision instruments for industrial and laboratory use.

Still, Petry said he's "cautiously optimistic" about the project. There are still some quality issues that need to be worked out and he's unsure of what's causing them -- hardware, software, or improper configuration. "It makes us a bit nervous because we wonder why the quality issues are still so persistent and prevalent."

While Petry's current PBX from Nortel Networks Ltd. is extremely reliable, it lacks the features of IP telephony. Petry said his company has been looking at IP telephony for two years, but until now has been unconvinced of its maturity. Now, he's ready to move on and is gearing up for a complete transition to IP telephony by next year.

In the interim, he's begun preparing his infrastructure for VoIP, he said. That will include rewiring the facility to support moving gigabits of information to the desktops and upgrading to Cisco Power over Ethernet Gbit switches.

"All research and development for the last five to seven years has been in IP telephony technology," said Elizabeth Herrell, vice president at Forrester Research Inc. in Cambridge, Mass. In the meantime, traditional time-division multiplexing PBXs are growing older, and vendors have pretty much stopped any new development in that area. As a result, they're being phased out.

"Most [enterprises] are waiting to do the transition at a time that makes sense to their business operations, not necessarily because a vendor has a new product. But [IP telephony] is a replacement technology, and the replacement cycle is well under way."

A new survey by Forrester shows that 23% of North American companies have fully deployed or are in the midst of deploying IP telephony this year, versus just 14% in 2006. The survey also found that 54% of North American and European companies plan to increase their spending on IP telephony equipment and services this year, versus 51% in 2006.

Thirty-five percent said they expect their migration to IP telephony to be complete in 2008, while 90% of companies will have completed their migration by 2012.

Rich Ridolfo, CIO of Simat, Helliesen & Eichner Inc., a New York aviation consultancy, finished his company's transition to IP telephony in 2005, at a time when most companies were still evaluating the technology. Prior to adopting an IP telephony system from Cisco, his company was using a key system from Iwatsu America Inc.

"The motivation was twofold," Ridolfo said. "The limitations of the key system were primarily expandability and administration. There were a limited number of lines, and some of our offices were growing beyond that capacity. We knew we had to replace it. From an administrative standpoint, it was very labor-intensive. We had five or six PBXs to manage around the company and we relied heavily on outside vendors every time we hired somebody or changed offices."

Ridolfo said his firm has integrated unified messaging into his phone system.

"Our existing messaging system was and still is Lotus Notes," he said. "We were able to roll in and integrate our fax systems as well as voicemail. People absolutely think it's fantastic. Even more surprising was how they adopted it very quickly."

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Although the transition to IP telephony is in full swing, Herrell said adoption of related voice applications and services, such as unified messaging, desktop video and conferencing, are lagging behind the pace of system upgrades. She said adopters of IP telephony are missing a big opportunity.

"You can take advantage of your network," Herrell said.

External videoconferencing over carriers is much more expensive than running it over your own network. Having more robust applications on your network allows you to leverage your existing infrastructure and manage it more effectively. As a result, businesses will see more applications coming over the network.

"The telephone went first," she said. "Now you'll see more advanced applications migrating. It will make it easier. Rather than having a specialist set up a videoconference, people can just point and click from their IP phone and set it up themselves."

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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