Most businesses support two quite separate networks, one for computers and one for telephones. Not only does this setup double the overheads for installation and maintenance, but data and voice cannot be integrated.
Neither network can accommodate realtime moving video, so video-conferencing - if used at all - is usually relegated to standalone systems in meeting rooms, connected by yet another network and inaccessible to most employees.
The advent of internet technology and the internet protocols (IPs) on which it is based are changing all this. IP networks are cheaper to install and maintain than conventional networks for data, telephony or video-conferencing and can operate within an office, between buildings, between companies and on the internet. The key benefit of IP is its support for mixed data types. It can easily carry and combine data, voice and video, allowing, for example, colleagues in different cities to view the same application while discussing it by video-phone.
Unlike rival technologies such as ATM and frame relay, the benefits can be achieved with minimal extra investment. 'No one is required to make large investments to use the new network,' says Luke Ceuppens, senior director for global service development at Level 3, which offers IP-based global network services. 'Hardly any extra hardware is required and no upgrade to the standard office PBX (private branch exchange) switchboard.
We think that's an absolute prerequisite for success. We're changing the way we transfer calls on the network, but keeping the way people use the network exactly the same.'
The only extra hardware required to link a company's data and voice networks is a 'gateway', which converts voice and data into IP packets and back again. This can perform two functions - connecting two IP data networks via a telephone line or linking an office's data and voice networks, enabling voice and fax to be carried over the IP network - voice over IP.
Gateways sell for about #500 per line. Depending on the bandwidth required, one line can carry many calls. They are produced by the big network hardware manufacturers and specialist vendors. Gateway technology can be built into a router or supplied in a standalone box. Simple, two-port gateways are becoming available, including Multi-Tech's MultiVOIP (#1,199), which does not contain a router and can be slotted straight into an existing Wan.
Similar technology is available in PC expansion card format, such as the NetBlazer 8500 from Digi International, which combines modem, ISDN, phone and fax capabilities with an IP converter. It acts as a type of voice/data multiplexor, allowing the two to be carried over the same system.
Prices start at about #500, although the devices are usually sold as part of a value-added package because they can be difficult for users to configure.
There are a score of client software packages, most of which can be downloaded for free.
No extra telephony equipment is required, since an existing PBX can be linked to the IP network via a gateway, allowing existing handsets to be used. But voice over IP phones are already becoming available, in both Ethernet and wireless versions. They sell for between #150 and #200, although the price is expected to fall.
A cheaper alternative is a simple handset, costing about #30, that plugs into a PC's audio socket or even a multimedia PC with speakers and a microphone.
Add a standard video camera for about #100 and the PC becomes a complete IP-based video-conferencing station. Alternatively, users may have a screen-phone, a single unit that combines a phone handset, camera and small screen with built-in Web browser. Such devices are being piloted by Alcatel and Samsung.
PBX manufacturers have already begun moving into the market. In time, entire office telephony networks could be replaced by IP-based systems, based on highly configurable 'soft' PBXs located on a network server.
A few pioneers are already doing this, including Cisco, which is moving its entire 15,000-person, 12-building San Jose office to IP. However, it is too early to say whether most users would be prepared to junk their existing phone systems, especially since they can be IP-enabled.
To support voice and especially video-conferencing, networks need to be resilient and properly managed, with plenty of bandwidth. Video requires at least 200Kbits of bandwidth, 400Kbits for reasonable quality and 1Mbit or more for TV or VCR quality. Voice needs a lot less - between 6.3 and 8Kbits for GSM quality and between 40 and 50Kbits for CD-quality sound.
On a shared office network, voice and video will be competing for bandwidth with data transmissions. Realtime applications such as voice calls and video conferences need continuous and guaranteed bandwidth to ensure adequate service quality, so they must be given priority. On most data networks, data goes against the grain, so they need some re-education from the latest breed of optimisation products, sometimes called gatekeepers, from vendors such as Orchestream and Cisco. Gatekeepers prioritise transmissions, so they will put voice over IP at the top of the list and background jobs such as print spooling at the bottom.
Andy Hall, business development manager for video products at Cisco, says: 'The user with a video-conference system makes a connection first to the gatekeeper, which validates that they have permission to make the call. The gatekeeper makes the connection to the user at the other side and reserves the bandwidth required."
Being packet-switched, IP does not require a dedicated line, even for voice calls, so it can significantly reduce the cost. Early adopters of voice over IP tend to be attracted by the financial savings, especially when it comes to long-distance calls between sites. A conventional 2Mbit leased line from London to New York might cost $20,000 a month, but a similar IP capacity from US provider Level 3 costs nearer $8,000. A 45Mbit line could cost $200,000, compared with $95,000 from Level 3. Smaller call volumes that do not justify a leased line can be routed via the user's ISP, paying only for local calls at either end (see box below).
Another selling point is the simplicity of bringing an organisation's entire voice and data services to a common entry point and common management structure. Dilip Mistry, managing director of Multi-Tech UK, says: 'It's very attractive to be able to go to an organisation and say: you can have one pipe coming into your building with all your communications.'
Complex technology such as video-conferencing is now found in most user departments but managed centrally. If a cable comes loose from a camera in the boardroom, the network will issue an alert and if board members don't understand how to use the camera, it can be operated remotely.
Buying all their comms services from one supplier simplifies things for the customer, but not necessarily for the reseller. 'Voice over IP needs Vars and systems integrators who know what they're doing,' says Reiner Straeger, product marketing manager at Digi International. 'We need people who understand both sides of the technology and can put together a package.'
The voice over IP market is wide open. says Paddy McManus, European sales director at network optimisation software developer Orchestream: 'There are a few brave entrants in the reseller market. For those that come in first, margins will be above average because there will be no discounting.' Channel margins on voice over IP products are about 50 per cent, two-thirds of which goes to the reseller.
Early customers have included financial institutions and engineering firms.
A popular application is delivering training. One-to-one and class training sessions can be held in realtime or students can call up self-study videos.
3Com has used similar technology to create its own private TV station, broadcasting corporate news programmes and pep-talks to staff, complete with data such as PowerPoint presentations. The audience can ask questions via a text-based discussion area which also uses IP technology.
Sharing video, voice and data in a single call has been possible for a while using Intel ProShare and TeamStation, but IP-based networks will facilitate the spread, allowing users to share applications as well as video pictures.
The service will also simplify call centres, bringing them within the range of smaller businesses. Callers could select from a recorded menu and their calls would be directed to the appropriate operator. The call, along with the information on the operator's screen, could be transferred to a colleague in a different building or at home.
As internet telephony becomes more widespread, customers browsing a company's Website will be able to press a button and speak to an agent who will be able to call up the page the customer is looking at and show them other pages. This could enable an alternative to online purchasing for those who do not want to give credit card numbers over the Net.
Similarly, teleworkers will be able to ring into the office to pick up voicemail and email and surf the office intranet, all in a single call.
Straeger says: 'Under a conventional system, teleworkers needed two channels to be integrated. Using voice over IP you can replace this with a single channel.'
Once phones and PCs are on the same network, they can be integrated on the desktop. Browser software could alert users to incoming calls, use caller line identification and divert to voicemail. Full-blown unified messaging systems would funnel phone calls, pager messages, emails, video-mails, voicemails, faxes and telexes into one mailbox with a common interface.
The phones on workers' desks will be programmable, allowing people to move around the office but keep the same extension number. Alternatively, when they log into a PC, their personal extension number could automatically be routed to the nearest phone. Several numbers - office, mobile, personal - could be routed to the same handset, which would ring differently depending on the number called.
The two potential obstacles voice over IP take-up - apart from the relative lack of experience in the channel - are standards and quality. The only widespread standard is H.323, which specifies the compression of sound and video for multimedia, so the sound element is often used for voice over IP. In theory, this should make voice over IP gateways and switches interoperable, but it is easier to have a single vendor's equipment at either end of the line. Fuller standards, especially at the network end, may take another year or two. Windows 2000 promises to simplify the configuration of voice over IP gateways since it supports TAPI 3, which voice over IP products often rely on.
Quality is also perceived to be a problem. Todd Krautkremer, vice president of marketing at US bandwidth management specialist Packeteer, says: 'One hindrance to development is quality of service.
Some analysts don't think it will happen until 2001.'
IP voice quality can only equal or surpass a conventional phone if sufficient bandwidth can be guaranteed. It can be achieved on an intranet or virtual private network (VPN), but not always over the internet. A time delay of as little as 250 milliseconds can make conversation difficult, while uneven packet delivery can cause sound to jitter and video images to take on the Andy Warhol look.
As VPNs improve their premium services, the problem will ease. Mike Valiant, marketing manager at 3Com, says: 'IP is more flexible. While the emphasis today is on saving cost, in future you could choose to pay more and have CD-quality sound that needs higher bandwidth, which would be better than a conventional fixed phone.'
Over time, users may choose to spend as much as they do now and reap more benefit, rather than try to replicate communications on the cheap.
McGregor Agan, director of channel development for business communications products at Intel, says: 'You can look at these applications as layering on an investment. It's not just about being able to communicate more cheaply, It's about being able to communicate more.'
Voice telephony over the internet has been available for some years.
According to a survey conducted by MORI for Motorola and published last autumn, five per cent of the UK has used it.
Dialup voice and video-phoning over the Net is very cheap, especially when calling abroad, because each person only pays the cost of a local call connection to their own ISP. Hitherto, because the vagaries of the internet have resulted in poor sound quality and reliability, the call had to be set up in advance because one party could not 'dial' the other. Both had to have special IP telephony equipment (usually an IP card inside their PC) and usage was therefore relatively low.
The last two problems can be overcome by using a PC-to-phone service such as Delta Three (www.deltathree.com) or Net-2-Phone (www.net2phone.com), which allow users with an IP phone to dial a normal phone by connecting to the provider's Website and typing in the destination number. Callers only pay for their own local-rate internet connection, plus the on-cost from the local internet server at the destination, which is usually another local call.
Phone-to-phone services are also available, where the caller can dial from a normal phone. More sophisticated services are on the way, such as unified messaging and phone-to-PC capability that will enable PC users to take incoming calls even if they are logged onto the internet.
Delta Three claims its calls are between 30 and 80 per cent cheaper than standard international rates.
The service has 350,000 direct customers - mostly business travellers, students and cost-conscious consumers with pre-paid calling cards - but most of its business comes from resellers.
These range from simple portal sites, receiving commissions up to 17 per cent, to fully integrated services.
The issue of quality is more tricky, since dialup links inevitably involve taking a chance on the notoriously unpredictable performance of the internet.
'You start on the public internet and the quality of the PC-based applications is dependent on your ISP,' says Fara Hain, marketing communications manager at Delta Three. 'As soon as we can take you onto our managed intranet, the quality becomes much better. When the internet lines are relatively clear and you're using a managed network, you get sound quality which is similar to a regular phone call.'
More than 30 telcos are setting up worldwide dedicated IP-based networks, which will work like the internet but offer guaranteed capacity and service.
These could be operational within a year or two and may include combined voice and data services for application sharing, interactive video-conferencing and the like.
For now, however, internet performance is just not good enough for realtime video-sharing applications.
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