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Cost is main convergence driver
But analysts and vendors say look at the business benefits...

By Andy McCue

Published: Tuesday 09 December 2003

Cost reduction continues to be the main driver for businesses moving to converged voice and data networks, with almost two-thirds of IT decision-makers citing it as the crucial factor in new research.

The survey of 100 IT executives at the IDC European IT Forum in Paris in September was conducted by research firm TNS for Nortel.

It found that 40 per cent of users have voice and data running over a single IP network or plan to do so in the next year, while 60 per cent have already converged their voice and data networks or plan to do so in the next five years.

Analyst firm Gartner recently warned users to look for tangible business benefits of voice over IP (VoIP) networks beyond cost savings from decreased call costs, and in a research note outlining Gartner's predictions for 2004, analyst Steve Cramoysan says the focus on cost means users will only scratch the surface of IP telephony capabilities in the next year.

"IP telephony has the potential to dramatically change the way enterprises communicate. But most continue to implement IP telephony as a one-for-one replacement for a PBX or Centrex service. Consequently, they are missing opportunities to improve business productivity and communication processes," he said.

But the Nortel survey found 60 per cent of IT buyers are still preoccupied with the cost reduction aspect.

Ian McKeown, CIO at Nortel, reaffirmed Gartner's view that firms need to look at convergence in terms of business value and improved communications.

"We are finding more and more interest in convergence. We're coming out of a period of cost being king. CIOs are looking at enabling change within the enterprise and increasing productivity," he said.

McKeown said cost savings can vary according to the business and the applications they want to run on a converged network but said Nortel had experienced savings of 40 per cent on a deployment for its sales force.

A previous Nortel survey in July, conducted by Mindwave Research, found almost a third of users already had converged networks.