Do Skype and Vonage have anything to do with VoIP?

You've probably heard about Skype and Vonage. These two companies provide VoIP services for consumers, and they are now targeting the business market (small and midsize first) as well. With Skype software, there are many ways to make free calls, such as Skype user to Skype user calls, but there are charges for other types of calls. Vonage offers variously priced calling plans that allow you to make free calls. In both cases, check the companies' websites for more detailed information because not every call you make using their services will actually be free.

What about security issues?

Security issues surrounding VoIP have been simmering in the background for years as the technical hurdles have drawn much of the spotlight. However, vendors and enterprises have recently started addressing the problems. In 2005, a story on CIO.com looked at the risks and challenges. In that article the writer said "...IP voice servers are susceptible to virus attacks and hackers. VoIP is even more sensitive than data when it comes to disruption and packet loss. Yet many security measures that are applied to data networks don't work well for VoIP. For example, traditional firewalls can result in delays or blocked calls, and encryption can cause 'latency' and 'jitter' (packet slowdowns that can disrupt calls). As a result, security techniques must be specialized for VoIP. And it should go without saying that VoIP equipment should be placed in a secure, locked location." The article also addressed the fact that unencrypted VoIP calls are easy to intercept using software downloaded from the Internet.

Clearly, there's a lot of work to be done. In recognition of the fact that security issues have become a huge concern, for the first time VoIP has been added to the list of top 20 threats on the most recent SANS Institute security update. Market researcher In-Stat reported in its November 2006 article "VoIP Security: Preparing for the Evolving Threat" that "with businesses poised to rapidly adopt IP PBXs and IP phones, companies need to revamp their security strategies to accommodate VoIP." An In-Stat survey found that although more than 40 percent of the respondents did not have specific plans for securing VoIP deployments, the majority did have budgets in place to do so, and when asked to rate their knowledge of VoIP security, most characterized themselves as "somewhat knowledgeable," the lowest rating provided on the survey.

How are CIOs using VoIP right now?

The rise of VoIP comes at an interesting and challenging time for CIOs. As CIO reported in "Untangling Telecom," during the last decade or so, the IT department and telecom staffers have "entered into a sort of arranged marriage," and it's been a sometimes rocky union. That arrangement took place because CIOs' IT departments have always run data networks, and telecom carriers have been increasingly providing network-based services (for WANs and LANs). Additionally, voice and video can now run over networks, all of which led to telecom being rolled under IT's purview.

The convergence of networking (data, voice and video), as well as unstoppable demand for bandwidth from users, has put a tremendous amount of pressure on CIOs to come up with a unified strategy that takes advantage of these newer technologies that should enable greater productivity for users, and ultimately save the company money. For CIOs, it's a balance right now—piloting VoIP in controlled, small-scale environments while keeping the traditional, circuit-switched phone lines until companies are confident that they aren't necessary. However, nobody is sure when that will occur.

In general, CIOs are taking a phased, cautious approach to rolling out VoIP across the enterprise. That's largely because of the technical hurdles discussed earlier and also the fact that many CIOs are still skeptical that VoIP and IP telephony can be "the solution" to all of their telecom woes. There are places where a VoIP pilot makes perfect sense, and those where it doesn't. For example, if you're a retail manufacturer who has a large amount of seasonal sales, you don't want to go live with a wide-scale VoIP rollout in your call centers around Christmas. But in areas where VoIP's kinks can be worked out, and the work can still get done (meaning delays in phone calls and intermittent service won't kill the company), VoIP makes a lot of sense. Osterman Research claims that just one in 10 U.S. companies has already deployed VoIP, though it predicts that by late 2007, 45 percent of companies will have deployed some type of VoIP.

Three tips for VoIP rollouts

Problems and challenges lie around every corner when it comes to VoIP implementations. Here are three things to remember, courtesy of "Don't Let VoIP Throw You," in the Nov. 15 issue of CIO.

1. Organizational mess
   VoIP works across wide area and local area networks, which many companies handle through different budgets and departments when IT and telecom groups are separate.

   TIP: Companies may have to reorganize internally before developing a companywide VoIP strategy.

2. Network traffic trouble
   It's not unusual for performance problems to creep in as you add VoIP users or sites. "The most important decision anyone who is considering implementing VoIP can make is how they will 'live' with it after the installation is completed," says Forrester Research analyst Lisa Pierce.

   TIP: Make sure you have comprehensive VoIP monitoring and management tools, and staff expertise before rollout. If you can't afford these, consider managed or hosted services, Pierce advises.

3. Tough business case
   Moving to VoIP typically means network upgrades. But VoIP may not be top on the list of networking upgrades, especially with telecom budgets growing more slowly than IT budgets. Meanwhile, conventional long-distance rates are plummeting; undercutting what has been VoIP's biggest advantage.

   TIP: Piggybacking on a network redesign may help. Keep a close eye on the VoIP dollars and sense as phone rates change.

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   Anything missing? Got a gripe about these pieces? Send a note to clindquist@cxo.com with your additions and omissions.