Progressing a market beyond the ‘early adopter’ stage has always been difficult. But for the suppliers of IP telephony, making that transition has proved harder than most. IP telephony is still close to the bottom of the IT adoption curve, despite a five-year investment of billions of development and marketing dollars.

But many believe the time has finally come for IP telephony to surge up the adoption curve. Figures from analyst group Synergy Research show that the worldwide enterprise IP telephony market grew 50% in 2002, from $575 million to $863 million. In addition, the number of IP-based phone lines installed in the US reached 10% in 2002, pointing to broad support across business and consumer segments.

But this has not always been the case. Technical problems, such as loss of voice packets mid-way through calls, and unclear payback opportunities have put many technology decision-makers off investing in IP telephony. Some critics even suggested that the acronym VoIP stood for ‘very over-hyped, impossible pipe dream’. But supporters of the technology now argue that these technical problems have been resolved.

For one, equipment and software prices have fallen significantly in the last 18 months. Second, as more and more data applications move online, organisations have been forced to make their networks more robust as a matter of course, and this has made them more suitable to the introduction of voice applications, says Peter Williams, senior networking consultant at 3Com: “Once an organisation has got to the stage where its data infrastructure is solid enough to do a lot of web-based business, it has enough resilience built in to handle voice,” he explains.

Added value

The promise of reduced telecommunications costs may have been a driver behind early IP telephony projects, but increasingly customers want to expand implementations beyond the services they would usually route through a voice-only, private branch exchange (PBX) network.

Margaret Hopkins of Analysys, the technology market analyst, says demand for IP telephony is being driven by growing volumes of email, increasing numbers of remote workers, migration to integrated voice and data, and the adoption of video services. Fausto Amoroso, of UK networking services provider Omnetica, agrees: “It’s no longer about replacing traditional PBX systems – it’s about being able to add new applications easily and efficiently.”

Applications such as unified messaging allow users to access voicemails as email attachments, and even integrate these files with other applications using open standards such as XML. Employees can also share streamed video across the network, for example as an e-learning tool.

In addition, moving voice applications over to IP can help increase employee flexibility. Users can log on to any phone, providing it is part of the overall IP network, making the best use of limited office space. Contact centre agents, for example, can work from home within a ‘virtual’ contact centre environment, reducing property overheads significantly. Emerging mobile networks can also interact with IP, bringing mobile phones and PDAs into the converged network as well.

Moving forward, says Hopkins, it will be these added values, rather than cost savings, that will drive migration to IP. Below, two organisations that have taken the plunge into IP telephony share their experiences.

The De Vere Belfry

Even those for whom golf is at best a peripheral interest are likely to have heard of The Belfry. One of the UK’s most famous golf courses, its name has become synonymous with the Ryder Cup, the two-yearly contest between the greatest golfers of Europe and the US.

Not surprisingly, the venue’s four-star De Vere Belfry hotel attracts many visitors around the time of the contest. So to cater for this spike in demand, the De Vere Belfry took the decision to upgrade its communications infrastructure before it opened bookings for the last Ryder Cup, in September 2002.

Before the upgrade, the hotel call centre would occasionally struggle to cope during peak periods. Using a traditional private branch exchange (PBX) phone system, a single reception team would answer all calls, but had no way of knowing which agents were busy or at their desks. Calls to the main hotel would also be transferred to the reception team, meaning that customers would sometimes speak to three different people during the course of one booking transaction.

“The sheer volume of calls, especially around Ryder Cup time, put tremendous pressure on the call centre and the receptionists in particular,” explains Ed Sygrove, IT director of the De Vere Group. “We also had no way of tracking how many calls were abandoned or how long people were kept waiting.”

The hotel chain did not want a completely automated system; neither did it want to abandon the old systems completely. The new system, supplied by Cisco Systems and integrated by Network Defence, consists of a 50-seat call centre with agents using Cisco IP phones. It has three switches and a router, which contains a digital link to the old PBX. The installation also includes two Cisco ‘Call Manager’ IP telephony servers and call centre software supplied by UK-based ARC Solutions.

The system tells receptionists which agents are available from which teams. The IP telephony servers make it possible to maintain control from a central location, which means it is cheaper and quicker to link different call centres back to the central office. The system also collects data on voice traffic, which helps managers plan staffing levels to meet peak demand and reduce overheads during quieter periods.

“Within one month we saved around 100 calls that might otherwise have been lost. That’s a major slice of business, so we are seeing a rapid return on our investment,” says Sygrove.

Yorkshire Building Society

Executives at Yorkshire Building Society, the UK’s third biggest building society, have long been keen on the idea of IP telephony. The mutual organisation’s IP data network was rolled out in 1996, and it had considered converging voice and data applications over this network. “We found the technology a bit raw,” says IT manager Berni Wells.

Since then, three more IP networks have been added, but bottlenecks in network traffic began to appear.

In 2001, the Yorkshire decided to look at the possibility of a converged voice and data network, not only to reduce costs but also to add new applications, such as video conferencing for training purposes, and to make it easier to add new fixed and remote locations to the network. With a telecoms service contract with BT coming to an end, it was also thought to be the right time to take a fresh look at a converged system.

In February 2003, the building society announced a five-year, £10 million contract with a new service provider, Cable &Wireless, to migrate all networks to IP. During the first stage of the partnership, which runs from April until autumn 2003, an IP-based virtual private network (VPN) will be rolled out across the organisation, connecting the headquarters, data centre and more than 130 branches with a resilient infrastructure backed by rigorous service level agreements. After that, the Yorkshire will pilot IP telephony with a view to rolling it out throughout the organisation.

Once the project is finished, the all-IP network will be able to prioritise particular types of traffic, such as video. It will have four times the capacity of the old network and cost less to maintain and support. And IP phones will bring greater integration between back-office systems and customer service agents. “We believe that our new IP infrastructure will give us a competitive advantage in the UK market and will reduce the overall cost of our voice and data infrastructure,” says Mike McCluskie, network services manager.