VoIP Is Growing, Slowly

If an automobile manufacturer sent you a notice touting a new diesel engine that performed just as well as the conventional one in your current car?no better, no worse?would you ask your mechanic to rip out the one under your hood in order to replace it? That’s the dilemma facing voice over IP (VoIP). The advantages of an IP-voice network over traditional telephony are not staggering?the per-call price is pretty much the same, and most people won’t be persuaded by VoIP features like the ability to route voice mails to an e-mail inbox?and, in this economy, the cost of replacing the copper phone lines with Ethernet cable just isn’t worth it.

To be sure, VoIP is growing. Cisco sold its 1 millionth IP phone in August, and analysts expect the VoIP market to double in 2003. However, many millions of traditional phones are sold every year (as a point of reference, more than 94 million cell phones were sold in the third quarter of 2001). “It will be a slow adoption,” says Christine Hartman, research director at Cedar Knolls, N.J.-based Probe Research. She says companies will transition to VoIP over time when they start a replacement cycle.

That said, Hartman strongly encourages CIOs to install VoIP networks whenever they have to replace their existing telecom infrastructure or expand it to a new office?a move that only requires equipping each workstation with two Ethernet connections instead of one. David Fraley, a principal analyst with Stamford, Conn.-based Gartner, adds that using a VoIP network in your contact center (formerly known as the call center) can consolidate all customer contacts?phone calls, e-mails, faxes?on a single network, thereby making it a snap to maintain an up-to-date customer profile. That, he suggests, is a worthwhile investment.

The biggest hurdle to VoIP adoption may come from the beleaguered telecom industry, which Fraley says is in the “midst of a great depression.” Traditionally, telecoms spend 10 percent to 12 percent of their revenue on infrastructure maintenance. Now, they’re spending 8 percent. The cuts, says Fraley, could push truly widespread VoIP adoption back from 2010 to 2015.