Talk is cheap

There are no second acts in American lives,' wrote F. Scott Fitzgerald, author of The Great Gatsby. But there are second acts in American IT.

Thin clients have made more than one comeback. Mainframes, once given up for dead, have returned to life. Now it is voice over IP's turn.

The technology is not new. In the Internet boom of the late 1990s, it was being touted as a way for people to do free long-distance calling from their computers. Unfortunately, the quality of service matched the price (zero).

All the hype died off for a while, but the technology itself continued to develop and quietly made market gains at the enterprise level. The past year has seen a major revival.

Telephone and cable companies, as well as start-ups like Vonage, are broadly promoting the service. FCC and Congress have started looking into how to regulate it. State and local governments'where some offices are starting to take advantage of VOIP'are concerned about losing the cash stream they get from taxing telephone services.

Aside from improved quality, there is another big difference from a few years ago. The word 'free' is missing. What we have instead are practical implementations of VOIP that can result in some savings if done right, but whose real value lies in opening the door to a greater convergence of voice and data, enabling better communication and collaboration.

Data and voice transmissions have certain basic similarities. Both involve communicating between two points by sending impulses over a wire, an optical cable or through the air. But there are key differences.

To begin with, data is digital, while voice is at least partially an analog system. Phone systems used to be entirely analog and, in most cases, still are'at least between the end user and the phone company's central office. At that point it is frequently converted to a digital signal for transmission along the main service trunks and converted back to analog before it reaches the receiving party's phone.

Then there is the way the connection is made. Telephones establish a fixed connection with a fixed bandwidth regardless of how much data they are carrying. Operating this way wastes the vast majority of transmission infrastructure capacity.

IP communications, on the other hand, don't have a permanent connection or route. The data is assembled into small packets and routed along a path shared with other data, voice or video packets from other users. These packets are reassembled once they reach their destination.

You can compare the two technologies to a railroad track and a highway.

Establishing a telephone connection sets up a private rail line between the two end points. Nothing travels that line except the communications between these two parties. Having a private route means excellent quality of service, but it's also very inefficient since that line could carry a lot more traffic.

IP is like the highway system. Instead of a route used by only two people, packets from numerous users are constantly entering and exiting. It can carry a lot more traffic that way.

But IP connections run into the same problems that highways do'traffic jams. This is not much of a problem with data connections. If a packet gets delayed along the way, it might mean the user waits an extra second or two for a Web page to load. But voice communication needs a steady, uninterrupted flow. When packets are delayed, it's like trying to talk to someone whose cell phone keeps cutting in and out. It just doesn't work.

To address these issues, the International Telecommunications Union issued Recommendation H.323, a standard for packet-based multimedia communication systems. It covers not only VOIP but also real-time video and data transmissions over both LANs and the Internet. With this in place, VOIP was ready for the big time.

For enterprises, there are two ways to use this technology. The first is for external connections. Many organizations are already doing this, since it allows them to use existing fixed data connections between buildings or campuses without having to go through the phone company.

This is one part of IT where governments are ahead of the private sector. For example, some agencies have high-speed connections linking their branch offices. If there is adequate bandwidth, voice traffic can join the data traffic flowing over these lines at no additional charge. This can be particularly advantageous for connecting to overseas offices, where the PTT (post, telephone and telegraph) offices charge much higher rates for phone service than domestic companies do.

Decisons, decisions

An alternative is to use VOIP services from a cable or telephony company. AT&T, Cablevision, Charter Communications, Comcast, Cox Communications, MCI, Qwest International Communications, Sprint, Time Warner, Verizon and many others offer VOIP as part of their service bundles. There are also start-ups such as Vonage which deal strictly with VOIP.

The other place where VOIP comes in handy is as a replacement for existing internal phone systems. PBX vendors have been promoting the switch for years, and it is gradually catching on.

In 2002, according to Gartner Inc. of Stamford, Conn., more than 35 percent of all new PBX lines in North America had the potential to carry IP, and 14 percent'more than 2 million'actually did connect to an IP phone.

This is a 15-fold increase over just three years prior, and Gartner vice president Jeff Snyder predicted that the number of new IP lines will exceed the number of traditional lines by 2006 or 2007. He said customers are taking a slow, staged approach to rolling out IP.

'First they buy a switch from their legacy vendor so they can run all their old systems on the new box; then they buy the data network; then they upgrade or replace their applications, including any custom integration; finally they phase in the new telephones,' he explained. 'That way they have the ability to spread the cost out over several years as appropriate.'

The vendors making the equipment fall into three major categories:
  • Traditional PBX manufacturers such as Alcatel, Avaya, Mitel, Nortel and Siemens. These have a strong market presence, large installed base and familiarity among technicians used to dealing with voice equipment.

  • Networking firms like Cisco and 3Com that have a strong presence in data IP networking and are extending their expertise to cover voice traffic. They have a strong appeal to LAN technicians who are used to these vendors' products and who look at VOIP as just adding another type of traffic to their existing networks.

  • Vendors who specialize in the IP Telephony market including ShoreTel, AltiGen and Vertical Networks. These don't have much installed base or the type of brand awareness that Cisco and Nortel enjoy, but that's not a barrier to selling their products to smaller government agencies that are not concerned about integrating with multimillion-dollar legacy systems.

At the moment, agencies have no compelling reason to immediately switch to VOIP. It can lower phone bills by bypassing the phone company, but this can also be done by just installing VOIP at the gateway to the outside world rather than changing over the entire network. Another advantage is that the tech staff has a single protocol to support.

The downside of switching includes the cost of buying the equipment and software and upgrading the LAN to support the added traffic. It also cuts down on redundancy. Currently, if the network goes down, you can still call someone; or if the phones go down, you can still get the word out by e-mail. Going to a single network eliminates that safety net.

What makes it compelling are the applications IP telephony enables. One of these is presence management, a feature that already exists in instant messaging and collaboration software. It lets users see who else is logged in at the time.

With a click of a mouse, a user can bring someone else into a conversation, no matter where they are in the world. These applications also make it easier to transfer calls, along with data and documents, to someone else in the organization.

'In two years we will be seeing a critical mass of applications in this area,' Snyder said . 'These applications are what's going to make the compelling argument for switching to IP telephony.'

Drew Robb of Glendale, Calif., writes about IT.

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