IP Telephony Can Be the Remedy for Networking Woes

Corporate America is in a major campaign to lower expenses. Consequently, some enterprises will ensure that their voice networks can be centrally managed and can allow for low-cost intra-office calling. IP telephony is the long-range answer to lowering service and intra-office toll charges. Spending on phone systems will now shift toward IP telephony, replacing money spent on traditional circuit-switched PBXs. IP telephony lets enterprises manage all offices over the corporate WAN from a central location. Using the WAN to connect offices also eliminates usage charges for intra-office calling.

Those vendors that are the most diligent about developing and selling IP telephony solutions will be the immediate beneficiaries of the enterprises' push to lower telecommunications costs. These vendors include 3Com, Mitel, Vertical Networks, Alcatel and Cisco. Nortel, Siemens and Avaya - three vendors with large market share - should also benefit from the migration to IP telephony. Of the latter group, Avaya, the U.S. market share leader for phone systems, has recently emerged as a force in the IP telephony market. It was second in IP telephony line shipments in the United States for the third quarter. Because of the strong leadership of CEO Don Peterson and the company's shift in strategic focus, we predict that Avaya will emerge as a fierce competitor to Cisco in the IP telephony market.

The migration to IP telephony is the long-range answer to the demand for phone systems that can be affordably networked. Because enterprises will never swap existing PBXs with new IP PBXs all at once, it will be necessary to manage multiple systems from different vendors in the near term. Telecom management software vendors and systems integrators will benefit from this trend.

Bottom Line

Vendor Recommendations System management and intra-office calling costs should be the two prime areas of concentration for sales. Relying strictly on side-by-side comparisons of system hardware will no longer win deals for sales staff. Salespeople must also understand the best procedures for delivering high-quality voice over the LAN and WAN. An IP telephony system that enables full-feature transparency across a network of voice systems should be the major differentiator. Current IP telephony systems, to varying degrees, allow feature transparency across the network. Features like caller ID are not transferable from system to system with some IP telephony systems. Vendors should make the software code for their traditional PBXs available to telecom management software vendors. Some vendors have not been cooperative about offering code to third-party software vendors. This is not a good policy, as enterprises will become disenchanted and eventually move away from third-party vendors anyway. So why create a bad image for your company?