Voice over IP (VoIP) is the hot product in the networking and telecommunications markets right now. Some channel companies are continuing to work on VoIP projects, but are pinning their hopes on unified communications (UC) -- an integration of VoIP with email, instant messaging, voicemail, conferencing and other applications.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
The potential for cost savings, functional improvement and better manageability are making VoIP the leading architectural candidate for new telecom installations or significant upgrades and enhancements, according to Stuart Chandler, president and CEO of Optivor Technologies LLC in Jessup, Md.
"Currently about 5% to 7% of our [customer] base is working with unified communications, but we expect that to grow to more like 80% within five years," Chandler said. "We're just tapping the surface of that now."
Definitions of unified communications vary because it's an umbrella term describing the integration of many systems rather than a defined product set, according to Terry Gold, CEO of Gold Systems Inc. in Boulder, Colo., which partners with Avaya Inc., Cisco Systems Inc. and Microsoft Corp.
"Generally under the umbrella you'll pull together email and voicemail and voice communications and text communications like instant messaging, and even video and presence," he said. "And then you put together products to do those things without the customers having to feel like they're always shifting from one thing to another."
VoIP networks require a VoIP controller that sits in the data center or wiring closet, taking the place of the private branch exchange (PBX). IP PBX servers support both analog and VoIP phones within an organization, and are often chosen as transitional solutions for that reason.
The VoIP controller links to the outside world via Internet connections or, more often, analog telephone lines. The VoIP controller handles primarily call management and routing -- that is, it opens a connection with a handset when it receives a Session Initiation Protocol (SIP) request, identifies the party being called, and makes the connection either to an IP address within the organization or to a telephone number outside.
The VoIP controller is also connected through a series of application programming interfaces (APIs) or network connections to applications within the organization so that, when a call comes in from a customer, the VoIP controller can query a customer relationship management (CRM) system, identify an appropriate customer service representative, and deliver both customer records and the call to that rep's desktop PC and phone.
The VoIP controller is connected to a series of routers and switches configured according to the size and layout of the network. The routers are unusual in that they support not only regular Ethernet connections but also Power over Ethernet (PoE) connections, which can provide both network connectivity and electricity to handsets on end users' desks -- in much the way an analog phone line provides both connectivity and power to a traditional phone.
At the user end is an IP-based phone -- which might be wired or, in the case of Voice over Wireless LAN, cordless -- that connects to the network in exactly the same way as a workstation. Voice traffic is delivered to and from the phone via packets, rather than dedicated circuits, as is the case with traditional phone networks.
The handset also contains enough processing power and a flexible enough interface to give the end user some control over the features of the call as well as the recipient. For example, an end user could record a call and link the recording to a customer record, or route the recording as email to a customer service representative or other employee.
IP-based phones also reduce maintenance and equipment costs by eliminating the need for a PBX and a dedicated circuit-switched network to connect it to users' phones. They also reduce long-distance phone charges and offer the chance to improve worker productivity with click-to-dial functions or integration with CRM and other applications that can present on-screen customer information the moment it's needed.
Unified communications solutions go further by connecting the phone system to other applications. That gives companies the tools to streamline or automate not only their business-critical processes, but also their casual interactions, according to Irwin Lazar, networking analyst at Mokena, Ill.-based Nemertes Research Group Inc.
Some of the benefit is in what Nemertes calls "Just-in-Time Fetch the Expert" applications -- in which a unified communications system can use phone, instant messaging, email or any other means available to immediately contact a key sales or service person in order to solve a customer problem or help close a deal.
Whirlpool, for example, set up a system under which low inventory would set off an alert to business-unit managers, delivered via their preferred medium -- phone, instant message, email or other -- and creating an impromptu conference at which they could decide in minutes what to do about an issue that might otherwise have taken days to resolve.
Unified communications vendors differ mainly according to the type of products they produce.
Microsoft's version, for example, relies on its Office Communications Server 2007 for instant messaging, presence-enablement, voice- and videoconferencing, application sharing and call management using a third-party IP PBX server as an interface to traditional phone lines. Exchange Server 2007 provides email and voicemail integration and directory integration. Office Communicator 2007 Desktop provides PC-based application controls to enhance functions available on the handset itself. Customers have to buy the IP phones and switches to support them, as well as the IP PBX gateway from other vendors.
Cisco's multifaceted unified communications plan divides UC into core and edge routers, a line of IP-based phones, security appliances, call-center automation software, call-control servers as well as connections to email, teleconferencing, speech control and other functions.
Avaya Inc.'s unified communications lineup takes much the same approach, with separate hardware, software and services for mobility, voice messaging, desktop telephony, unified messaging, Web conferencing and videoconferencing.
Though Cisco is the leading name in unified communications and Microsoft is perceived as the primary challenger, they are far from alone in the market. Avaya, IBM, Mitel, NEC, Nortel, Shoretel, Siemens, Teleware, Alcatel-Lucent, HP and others are also significant players.
So far, no single vendor has a dominant position in either VoIP or unified communications, according to most analyst reports and, most recently, a survey of readers of SearchVoIP.com.
The market as it stands for VoIP is big and growing quickly -- to as much as $1.27 billion by 2010, according to IDC. About 19% of large companies in the U.S. already have significant VoIP rollouts.
Customers who already have VoIP, however, are increasing their spending; 15% expect to increase their UC spending by as much as 25% between this year and next, according to SearchVoIP.com's survey. Another 15% will increase their UC spending between 25% and 50%, and one in 10 will increase UC spending by more than 50%.
That spells a lot of business and a lot of ongoing service for channel companies, Chandler said.
But the sales pitch and plans for creating unified communications solutions are far more complex than just deciding which vendor to support, according to both Chandler -- a Nortel Elite and Microsoft UC partner -- and to Eric LeBow, vice president of business transformation at Spanlink Communications Inc., a top-level VoIP and UC partner of Nortel competitor Cisco.
VoIP tends to be an easier sell than UC because it's fairly easy to define the cost savings of supporting only a data network, rather than a PBX-centered telephone network in addition to an IP network, LeBow said.
Generally, VoIP networks are considered money savers because they reduce the cost of hardware, software, maintenance and network management by eliminating the need to maintain one network for voice and another for data traffic.
However, the ability to sell customers on unified communications solutions requires a detailed understanding of their business processes, how closely a new system would have to mimic the old, and what the business-unit managers hope to accomplish with the system.
"In [a typical project] assessment you're talking about the number of boxes, bandwidth, sizing considerations. That's as far as you'd take it with a typical infrastructure deal," LeBow said. "With unified communications you're sitting down with the CIO, the CFO, the CEO, the business units, and talking about how they're doing business and how they're planning to take advantage of the system."
Unlike an infrastructure project, which might be driven by the IT or telecommunications department, unified communications projects are typically initiated by a business-unit manager or top executive to increase productivity.
"We are seeing customers wanting to use [UC] to cut costs, but also to drive top-line revenue and increase customer satisfaction," LeBow said. "When you can get the right call to the right person at the right time you can increase the satisfaction of the customer, but you also increase your ability to upsell and other abilities that really drive the top line."
The process of using a phone or email is so ingrained in most people, however, that many customers demand that a UC system first replicate the functions and commands of the old system before giving any of the new abilities a chance, Gold said.
"One customer example: We were well down the path of implementation with one customer when we were told that they have people who like to broadcast voice messages -- record a message and send it out to 19 people," Gold said. "We had a moment of drama figuring out if this system could do that, because someone wanted that function enough that it would have been a showstopper; it would have just stopped us."
More often, though, end users will stick with the same functions they rely on with traditional systems rather than spend more time figuring out what the new system can do for them and how best to take advantage of it, Chandler said.
"When you can show somebody that something they've been taking 20 minutes to do, that they do four or five times per day, they can do in four or five, a light bulb goes off," Chandler said.
End-user productivity improves dramatically just because there's no longer a need to check voicemail and email and other communications media separately, LeBow said.
But centralizing messages does more than eliminate redundant mailboxes. Using traditional voicemail, an end user might have to listen to a long message several times, if the phone number came at the end and was a little garbled, Chandler said. "With UC, you get that voicemail as a .wav file, and you can push the slider to the place you need to re-hear. Much simpler."
"And you don't have to be in the office to be productive," Chandler added. "In my business I can be on the golf course and still see every sales transaction that happens, so I'm right on top of things, no matter where I am."
That type of access-anywhere functionality brings a vast increase in productivity, much greater satisfaction from end users, and the ability to streamline business processes based on clunky traditional communications media, LeBow said.
But making it work takes a lot of upfront work with the customer, mapping requirements, training users, training technical staff and offering ongoing support so customers continue finding new ways to take advantage of the system long after it's been installed, LeBow said.
"If you just implement unified communications and walk, most of the customers are going to be a long time grasping the subtleties and abilities of the system," Chandler said.
Just as important as training end users is the ability to explain to them what they're getting in a concrete, realistic way, according to Bill Trussell, networking and security analyst at TheInfoPro Inc. in New York.
"If someone comes along and says something will be just as easy to use as the old phone system, then it takes some training to make it work and that training doesn't happen, the whole project could sour," Trussell said. "Likewise, if the architect and senior managers don't come to an agreement on cost savings, what will be accomplished and -- just as important -- how those things should be measured, that can sour the project as well."
Trussell added that any surprises can be an issue. "Projects get derailed when expectations are not properly set at the beginning, or if there is a disconnect between what they see and what senior managers or end users are expecting," he said.
Good estimates of cost and functionality can keep expectations in line by minimizing the potential for unpleasant midproject surprises for either project managers or end users, Trussell said. Telephone handsets are such an integral part of an end user's tools that any unexpected change in function or response will raise alarm bells and slow the progress of a VoIP project, he said.
A return on investment (ROI) analysis by Nemertes Research found that the average combined capital and operational cost of rolling out VoIP is $843 per user, though the per-user cost is lower for larger companies. Each unit costs about $473 in maintenance and operational costs per year; companies spend an average of between 12% and 17% of the capital cost of the units for maintenance each year, Nemertes' report finds.
Also critical are gradual rollouts targeting small groups within the organization that are willing to put up with minor glitches. Upgrading the CFO's administrative assistant during an early part of the project, when the system's performance is uncertain or training and support issues haven't been worked out, is a huge no-no. Those complaints go straight to the ears of the people who approve or cut off project funds.
"Anyone signing off on a unified communications solution project is running something of a career risk," Trussell said. "Someone is always going to be looking over their shoulder and asking 'Why didn't you think of this,' or looking at the issues that cause the project to balloon."
Network upgrades are almost a given, however. Typical networks are too subdivided to deliver the low latency required by voice traffic. In addition to adding switches designed to carry VoIP traffic, administrators need to create virtual LANs that can separate voice and data traffic to some extent. Furthermore, most networks are not currently set up to support SIP.
Underestimating bandwidth is a common problem, according to Bob Beler, president of Information Systems Group Inc. in Rolling Meadows, Ill. Voice over IP calls use about 35 Kbit/sec, but impromptu conference calls, forwarded calls and other important collaboration features can multiply the amount of bandwidth each call eats up, he said.
The ability of many unified communications solutions to forward voicemail via email, while convenient, changes the legal status of the messages themselves, especially for companies in finance, healthcare and other heavily regulated industries that require email and other documents to be stored and archived.
"If you don't plan to expand disk space capacity, that's going to be a surprise," Trussell said.
Weaknesses in cabling and power can be the most insidious problems, however. Most VoIP phones require PoE connections from the network switch, which is easy enough to plan. But most departmental network closets aren't wired for anywhere near the kind of voltage required to power dozens of phones and switches as well as the bridges, routers and networking equipment.
The best solution is to check all the power, training, networking, facilities management, technical support and other issues, then roll the project out in a relatively isolated user group -- preferably one in a new building that won't require upgrades to network cabling, power or other infrastructure issues, Trussell said.
That makes it easier to get the whole system working and builds in a happy user base that can spread the good word to other departments and make the overall project easier, he said.