NEWS Voice over IP is set to hit the big time in enterprises, according to one analyst.
Speaking at the VoIP for Business conference in London today, Peter Hall, research director at Ovum, said: "IP telephony has reached the mainstream. The technology is robust. The number of vendors is considerable. The business case is becoming more sophisticated."
Hall said the IP PBX market, in particular, is moving out of the early adopter stage in Western Europe. Ovum predicts IP PBXs will hit 50 per cent penetration by 2007 and 60 per cent by 2008.
Hubert Whyte, president and CEO of Network Equipment Technologies, a VoIP solutions provider, thinks the switch to IP may take a little longer, closer to a 10-year cycle, the same length of time it took for the industry to move from analogue to digital PBXs.
The Ovum analyst stressed that though the IP telephony market is still in the early stages the products are not. "The technology to support [VoIP] applications is robust." He said many vendors are in the fourth or fifth generation of their VoIP products and have addressed many of the glitches, such as security and quality of voice service.
VoIP will not arrive in the enterprise all at once, Hall explained, but will creep into organisations as part of applications they already use. "In next few years we will see VoIP incorporated into many key business apps we use today," such as CRM or ERP, he said.
Another trend Hall pointed to is the recent emergence of managed and hosted services for IP telephony, both for network services such as IP VPN and telephony services such as IP PBX and contact centres. He cited BT, Cable & Wireless and Colt as purveyors of such services.
Organisations are starting to realise "you don't have to do it all yourself", he said.
The benefits of renting VoIP services include reduced upfront equipment investment and the ability to lower the cost of in-house management, according to Hall.
But it's not something he expects every organisation will do. Instead most will go with a 'multisourced' approach where they keep some network operations in house and outsource others.
In five years time, managed VoIP services will be 10 to 15 per cent of total shipments, Ovum predicts.
Network Equipment Technologies' Whyte agreed many businesses will be slow to outsource IP voice services because, he said: "VoIP changes business processes for companies. People aren't used to it - and they want influence on it."
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1. Nick Hay
I strongly agree with Peter Hall’s point. IP technology is now mainstream and vendors offer very robust technology. A full-scale migration to IP convergence is no longer a question of "if", but "when". Cisco alone has just shipped its 5 millionth phone and the IP Telephony and VoIP represents a market opportunity of over £8.5 billion in the next four years. Since IP products are now market ready, businesses need to think about unifying their data now. A good time to implement a converged network is if an organisation is moving locations or needs to update their infrastructure. However, even if an organisation’s systems are not reaching end of life, it should take the time to determine how the productivity benefits of IP can be applied to their business. Many seemingly large costs associated with migrating to a converged network can be quickly recovered by cost savings and a boost in productivity. The sooner a business implements IP, the more competitive advantage a business will have both from a cost reduction point of view, but more importantly from increased productivity.