User acceptance of IP telephony is on the upswing. While it will be many years before all voice traffic on the century-old public switched telephone network (PSTN) travels over newer packet-based networks, that migration is officially under way both in enterprise and service provider networks.

Why now, after years of discussion about the benefits of using IP to integrate data and voice, is IP telephony catching on? First, investments in legacy technologies have begun to depreciate, making room for new network equipment in some enterprise and service provider networks. Second, voice-over-IP (VoIP) signaling and quality-of-service (QoS) technologies have matured. Third, the continued deregulation of the world’s telephony markets is opening up the potential for VoIP in new regions.

The trend is to combine all forms of network traffic onto a single, flexible packet infrastructure is decisive - because data traffic volumes will soon surpass voice traffic volumes. Packet telephony solutions move voice and fax calls from proprietary circuit-switched networks onto standards-based IP, Frame Relay, or ATM networks. Because the telephone is such an important business tool, a transition must not disrupt service. Connections must remain as dependable as those delivered by the familiar proprietary private branch exchange (PBX) and the public switched telephone network (PSTN).

Together, these developments are unshackling enterprises and service providers from the limitations of proprietary telephony switching equipment, freeing them to deploy compelling VoIP applications and services that save money, improve user productivity, and enrich customer relationships.

On the enterprise side, companies are taking a migratory approach to IP telephony deployment. For example, a common strategy is to roll out IP telephony in new network sites rather than continuing to invest in proprietary legacy private branch exchange (PBX) equipment.

The question that will come to the mind of every Indian business would be—"If the PBX works well, why do I need a packet telephony infrastructure?" My answer to them is—This is not about fixing what isn’t broken. It is about preparing your network to be a strategic asset for the future.

Enabling new applications
Many people tout the potential cost savings of consolidation, but the true value of integrated networking goes beyond the telecom budget. Integrating data and voice onto one packet infrastructure enables new capabilities that are not possible with separate networks.

One important application area is customer care. Your voice network should be integrated with Web operations to improve your communication with customers. Doing a better job of looking after customers than your competitor’s means that more people will do more business with you. To ensure that quality and reliability do not change, enterprises require a carefully planned, multistep migration. Enterprise managers don’t wake up one morning and say, ‘I’m consolidating my networks. You can do it in steps that make sense to you.

IP telephony has matured significantly in the last two years. The last two years have seen the technology evolve into a robust and stable platform to deliver voice over IP. The technology and its applications have grown as a direct result of a latent market demand perceived for open standards and value-added services – while also delivering cost advantages.

Traditional PBXs—which form the common intra-office communication network today—promise to deliver an array of value-added services, which PBXs claim to support—such as voice features. However, because these systems tend to leverage proprietary technology, unless an enterprise installs all its PBXs from the same supplier, the features of the various PBXs will not interoperate.

In addition, the features of traditional PBXs are difficult to program. Because of this challenge, many companies outsource some or all of the programming of their PBXs to third parties at a high cost. Finally, the price/performance of conventional PBXs has been stagnant for years, thereby making PBX systems unaffordable to the extent that these devices are seldom deployed in small or even midsize offices.

Given the nature of IP-PBX’s, they are based on open standards. Moreover, the technology has now scaled to the ability to deliver voice functionality that has been promised (to small and midsize businesses) by conventional PBXs but seldom delivered. Successfully delivering QoS, a comprehensive data-cum-telephony solution is in use at large sites, worldwide.

Further, IP-PBX’s enable some of the most customer friendly services right at the customer desktop. IP-based PBXs, today, provide a standard browser based screens with radio buttons, drop down menus and simple graphical user interface. This feature eliminates the need to outsource the task of programming call features, in addition to providing a worldwide web browsing facility off the phone.

IP-based PBXs also provide considerable functionality, including the following:

n They can be remotely managed by virtue of the web interface;
n They can process routine tasks, such as forwarding calls and self-maintained personal telephone directories, in a simple manner that uninitiated users can understand and use, by virtue of the user-friendly phone menus;
n They provide unified in-boxes for faxes, files, and voice mail, by virtue of the Unified Communications software integration with the PBX software;
n They support auto-attendants, by virtue of the IVR-based integrated voice and date SW controller;
n They offer automatic call distribution (ACD);
n Self configurable ring types by virtue of the features of IP phones;
n Use IP-based switches with Ethernet in-line power for phone management, thus eliminating the need for a separate power connection to the IP phone; and
n Limit cabling to converged single cable for voice, video and data communications.

Because of these features, small and midsize offices can now gain capabilities that were previously either impossible or economically unjustifiable.

An example of another benefit of IP telephony is the ability to browse Web pages from a phone. Underlying this capability is a technology called Voice eXtensible Markup Language (VXML). VXML is similar to HTML. When a user calls a special phone number, the call is routed to a device called a voice response unit (VRU). The VRU launches a Web browser, which finds and interprets a document written in VXML and then responds to the caller. Users can interact with the Web either by voice or touch-tones. All this can be achieved with compliance to the telecom regulatory norms in India.

Impact on IT budgets
One question that lingers in the minds of many is whether, and how, IP telephony will save money. Every consultant knows the answer to that question: it depends. Realizing savings benefits by deploying IP telephony depends on the information technology (IT) organization’s ability to reduce the costs associated with the following:

n IT personnel;
n Network equipment; and
n Transmission services.

To reduce personnel costs, the IT organization must reinvent itself in a way so that the majority of its members are competent in both voice and data technologies. While the reengineering of skills is certainly possible, as a general rule, networking technology evolves notably faster than do networking organizations and associated skillsets. So the most likely scenario is that only a small number of agile companies will quickly see any significant personnel savings because of the deployment of IP telephony.

It is more likely that an organization in the field of information technology will reduce the cost of its networking equipment somewhat due to the deployment of IP telephony. In particular, over time, packet switching is becoming notably more cost-effective than circuit switching. Packet switching will soon be 20 to 50 times more cost-effective, at the very least, than circuit switching—partly because of its "connectionless" nature, which makes it simpler, and also because of its adherence to open development standards rather than proprietary architecture.

The author is president (India & SAARC) at Cisco Systems.
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