With Michael Osterman, president, Osterman Research. Osterman recently released a study on business deployment of voice over Internet Protocol (VoIP) telephony.
Question: What is the main thing that you found in your research?
Osterman: I think the fact that VoIP is really ready for prime time. The infrastructure is there, the technology is there, the toll quality is there and so forth. There are some evolutionary impacts of VoIP. The initial and most important reason to implement VoIP right now is cost savings. You can actually save a substantial amount of money on telecom costs by going to VoIP. Long term, I think what's going to happen is that regulators will say VoIP has to be regulated just like other carriers' services. The cost advantage of VoIP is going to disappear. The other advantages of VoIP, the integration of the voice system and presence, are going to become more important.
Question: What challenges does VoIP face?
Osterman: I still think there is a lot of uncertainty on what regulators are going to do with VoIP. The FCC basically has taken a hands-off approach with VoIP. The regulators are going to wake up and say this is a huge cash cow. The potential for security problems makes VoIP potentially a much greater security risk than regular telephone infrastructure because VoIP is just another packet-based data service ... it's just data on the network. It could get viruses, it could get VoIP spam, all sorts of things. I don't think there is enough awareness about it [in general], but people are doing things about it. There are people paying attention to the problem but it's one that needs to be understood well.
Question: Are businesses adopting the technology now, or are they taking a wait-and-see attitude?
Osterman: When we asked organizations about planning for VoIP right now, almost half said that VoIP is not very important for [them]. When asked [about its use] three years out, they basically said close to half of their [phone] users will be on it. So we think 2005 and 2006 will be big deployment years for VoIP. I think it's a technology that is here, the voice quality is here, and so forth. The disadvantage is that it's a packet-based system that is much more vulnerable to exploits than traditional systems. The advantages -- the cost and the integration with the rest of the data system -- tend to offset that.
This 3 Questions originally appeared in a weekly report from