Quocirca's Straight Talking: The promise and pitfalls of VoIP

Voice over IP has received attention for offering cost savings and adding new features to your phone service. But, says Quocirca's Mark Boulding, you can't ignore the difficulties of justifying the investment and managing all this information.

Is the internet going to be the single communications carrier of the future? Will it be the thread that pulls all forms of remote communication together, to provide a consistent experience wherever and whenever required?

The concept is certainly relatively bold and without doubt still a little premature, but it is well grounded when taken in context of the present development trends in the IT industry. For it to happen, the internet must become the predominant carrier of voice traffic as well as data.

Voice over the internet, usually referred to as voice over IP or VoIP, has been a buzz word in the communications sector for a few years. It's consistently pushed as the next generation of communication technology that will supersede traditional analogue and digital telephone networks - and as a way of reducing costs and unifying communications.

Voice over IP and its derivatives are designed to allow the migration of voice communications onto a data network. This eliminates the need for a separate, dedicated voice network to run in parallel to the data network.

Performance is no longer the barrier to adoption that it was in the early days of VoIP. Intelligent data networks can prioritise voice over data traffic to ensure that voice over IP can provide the expected quality of service, although a degree of network optimisation is generally required to ensure that intermittent high traffic applications and network traffic peaks do not affect calls.

Combing voice and data traffic on a single network is a logical evolutionary step, as voice is handled efficiently in the data environment. In the traditional voice world, each conversation requires a separate circuit on which to operate, even if nothing is said during a call. In a voice over IP environment, only conversation or other noise is transmitted across the network. This information is translated into data packets, which are routed across the network with all the other data traffic. So the opportunity to reduce costs is not just about replacing two networks with one network of twice the capacity. Instead the data network can handle both voice and data with a significant reduction in the required network capacity and therefore cost.

In the challenging economic environment of the past few years, whenever organisations have looked at reinvesting in their telephony solution, anything that reduces cost has been compelling. With voice over IP now offering even more of the features associated with traditional telephony functionality, such as call waiting, voice mail and conference calling, it is even more attractive.

At the same time we are starting to see the re-emergence of application service providers, or ASPs. So far this has been primarily to deliver software applications. But ASPs are also starting to deliver voice services. BT and Cisco, for example, have recently launched a hosted voice over IP service that allows enterprises to remove almost all in-house telephony infrastructure and expertise.

We are also seeing the emergence of broadband telephony in the UK. This works in the same way as the BT Enterprise hosted solution, although is offered by a variety of service providers. It is aimed at small and medium enterprises (SME) and consumers and will include services previously only attainable with a PBX, such as internal extensions and advanced voice mail services. Rather than requiring an ISDN connection or a fibre optic link, these services are designed to function over a broadband internet connection.

Because voice over IP allows you to direct calls to anywhere with an internet connection at no extra cost, it allows small businesses with disparate locations to operate an internal phone network at a fraction of the upfront cost of a traditional telephone system. There are likely to be some challenges with number portability from the fixed line environment to the virtual environment. These restrictions appear to be more down to the regulators than the technology; their stance should change in due course as already demonstrated by a number of US states. In the meantime, the call charges will be some of the lowest available anywhere.

While cost reduction is a compelling reason to invest in voice over IP, it only represents half of the benefits on offer. The old half is the opportunity to integrate voice into many more applications than was possible with traditional voice networks. This is possible in part because of the emerging SIP (Session Initiation Protocol) open standard, which provides a mechanism for creating and managing multimedia communication across the internet. Multimedia communication can be anything from a normal voice conversation to voice, video and whiteboard conference calls involving hundreds of people.

To manage this level of flexibility a new generation of communication tools is emerging. Some of the initial tools offer several modes of communication in a single application, e.g. voice, email, instant messaging, video telephony and presence. While these tools are significant feats of engineering, few organisations understand or presently see any need for them. Ironically the mode of communication that is likely to drive adoption is presence, or the ability to determine whether a person's available to talk, in a meeting, on their mobile phone, etc.

For these new communication tools to offer quantifiable value and be widely adopted, they will need to integrate closely with existing enterprise applications and tools. Microsoft Office 2003 demonstrates that integrating communication into business tools is possible, but clearly it is still in the early stages.

One remaining problem is that even though voice can be transmitted over data networks, it is not as flexible or as easy to manipulate as text or other forms of data. Call centres have been the most progressive in leveraging and quantifying voice data. Applications like Witness Systems Call Mining have become very effective in analysing calls to determine customer satisfaction and the success of a call. This is achieved by monitoring keywords to analyse patterns and the context of calls. In future voice applications could be contextually aware so that a summary of the key points from a phone call can be emailed afterwards.

As these various modes of communication evolve, we will see increasingly more fixed and mobile devices actively supporting multi-modal or converged communications. The benefits of adopting this approach will include more effective communication. But like so many other new technologies, quantifying these benefits and justifying their investment are often non-trivial tasks. Invariably the simplest way for organizations to realize the benefits is through hands-on experience.