What are the disadvantages of VoIP?

Just as the list of potential advantages might make you think, "Why aren't we doing this?" there is an equal number of disadvantages and potential pitfalls that could make you (and your CEO and CFO) wonder, "Why are we doing this?" That will most likely happen when users experience network delays and poor-quality voice communications.

The first, and possibly most crucial potential disadvantage of a VoIP rollout is the fact that voice's network requirements are so finicky that any degradation in network quality will immediately and adversely affect your communications experience. The unfortunate consequence for those on VoIP-enabled calls is what is referred to as latency, jitter and packet loss, and the resultant "garble" or dropped calls are quite annoying.

That critical flaw for VoIP is in stark contrast to how data moves around on a network, where hiccups can occur with few short-term consequences. Put another way, in a Weigh In column on CIO.com, the authors write, "VoIP is a real-time application that needs to be treated as such—it does not have the same kinds of requirements as other enterprise applications that IT departments are used to managing." A robust, high-quality network environment is paramount for VoIP to work well. For many CIOs, that will be an expensive and time-consuming upgrade.

Second, some of those much-heralded big savings on long-distance calls will be realized only when a company's VoIP phones are connected on their network—in effect closing the loop on a network, and taking the carriers out of the equation. (If a carrier is still involved in your VoIP deployment at any point in time, expect that you'll still have to pay it something.)

Third, because VoIP is so hot, scores of vendors are flooding the market and promising short implementations (a month or two!) and relatively reasonable implementation costs (less than $150,000). Beware: Many CIOs and analysts have reported that VoIP rollouts will most likely take longer than anticipated, cost more than originally planned and require lots of training for users.

And lastly, VoIP depends on electricity to make it work. This means that power outages and VoIP don't mix well—no power, no VoIP service.

What does the IP telephony market look like?

The IP telephony market is poised for a lot of growth. Unfortunately, it's been stagnant that way for the last couple of years now.

There are many predictable issues that need to be ironed out before VoIP does, indeed, take off. The most critical one is all about perception: With VoIP, there still seems to be a steady undercurrent of skepticism—especially from businesses—that IP telephony does work well and that the quality is equal to what's offered from traditional carrier services. VoIP vendors have to get CIOs to buy into VoIP as a reliable, cost-effective and secure alternative, and dispel the FUD (fear, uncertainty, doubt) factor.

"Enterprises are being barraged by conflicting messages about the cost-effectiveness of adopting VoIP. These unclear messages surrounding sizable capital expenditures have made enterprises hesitant to deploy VoIP on a wide scale," according to market research firm Current Analysis.

Current Analysis predicts that the following near- and long-term market drivers will have a crucial effect on VoIP's adoption in enterprises:

• Evolving standards: Session Initiation Protocol will continue to be developed by standards bodies, heavily marketed by companies supporting them and integrated into vendors' VoIP equipment as it displaces the H.323 standard. For mass appeal, support for as many protocols as possible remains necessary.
• New applications: Enterprises are beginning to deploy (or plan the deployment of) a new breed of communications applications that takes advantage of packet-based communications. These include multimedia conferencing, video, presence management, IP-enabled call centers, and e-commerce applications such as "click to talk" customer assistance.
• Reliability and security: Potential enterprise customers regularly voice concern for packet telephony's low levels of reliability and security when compared with traditional voice networking. Providing solutions that maximize the reliability of VoIP gateways is central to calming these anxieties. As such, improvements in both security and survivability have been the primary focus for many vendors.

The other significant factor for the VoIP market is how much more the carriers will enable VoIP services of their own. Carriers (AT&T, Verizon, Qwest, etc.) are making inroads into the market by offering hosted and managed VoIP services, especially to small and midsize businesses. "These new services offer enterprises a migration path from TDM to IP that enables them to maintain a hybrid environment for as long as necessary, provides operational expense savings, new features and flexible call management options," according to Current Analysis research.