1/5/98 InformationWeek 45
1998 WL 2358008
InformationWeek
Copyright 1998 CMP Publications Inc.
Monday, January 5, 1998
663
Hot In '98:IP Telephony
Priming IP For Voice
--
Companies weigh using their private data networks and the Internet for
telephony
Gregory Dalton
Data has been hitchhiking on the public telephone system for decades,
essentially riding free on a network designed to carry voice traffic.
Now the roles may be reversed, as companies start tossing voice cargo
onto their private data networks and the public Internet. By the end of
1998, it will be much clearer whether phone calls over the Internet
Protocol will remain primarily in the consumer market-or become a
serious business option.
This year, technological advances are expected in the two
areas-quality and security-that have held back voice transmission over
IP. Some companies are already testing Internet telephony and deploying
it on a limited basis.
This month, financial services firm Nicholas Applegate will begin
testing voice between San Francisco and its San Diego headquarters over
its frame relay network and intends to eventually connect to its offices
in London and Hong Kong.
"It costs $300,000 [a year] for the hoses for IP overseas," says Scott
Turvey, group manager of technical services. "Why pay that and also long
distance?" He's watching to see if the bandwidth used by the calls
significantly slows down the network-but doesn't think it will because
the calls tend to be short conversations between traders.
The U.S. Department of Justice has 10 users involved with a
voice-over-IP pilot, says Arun Gurjale, a consultant at the department.
Rather than live phone calls, however, the agency is looking at using
encrypted voice over IP for wiretaps and for other one-way
transmissions, which are less sensitive to the uneven performance and
latency still found when voice packets travel across data networks.
Eventually, however, Gurjale says the department plans to have agents
hold teleconferences over secure IP networks because it optimizes the
agency's existing network.
Francois De Repentigny, an analyst at Frost & Sullivan in Mountain
View, Calif., projects that overall spending on equipment for Internet
telephony will rocket from $1.9 million in 1996 to $1.98 billion in
2001.
Much of the technical progress next year will be in the area of
gateways, black boxes that convert voice signals from analog to digital
and back. In the first half of the year, Micom Corp., a unit of Canadian
equipment maker Northern Telecom Ltd., will introduce its VIP 2.0
gateway, which will support Windows NT for the first time and offer a
browser interface and improved features for finding the intended
recipient of a voice call along a network. VocalTec Communications Ltd.,
which pioneered Internet telephony with the introduction of the first
client software in 1995, plans to offer a "carrier-class" solution, says
CEO Elon Ganor, who declines to elaborate.
Networking vendors are also jumping in. Cisco Systems says it will
ship large-scale digital voice packet gateways early in the year.
Ascend Communications, Bay Networks, and 3Com also plan to upgrade
their products to handle voice.
But as the technology advances, incompatibility becomes a factor.
Interoperability has been achieved on the client side with the adoption
of the ITU's H.323 standard that was originally developed for
videoconferencing. An ITU set of specifications for gateways, known as
G.723, may eventually emerge as a standard, but so far it has not
generated widespread backing. Some observers say interoperability will
emerge in the next six to 18 months.
The foundation for Internet telephony is being strengthened in part
by a vibrant, albeit niche, market for residential IP telephony. Tom
Evslin, CEO of ITXC Corp., a Princeton, N.J., startup aiming to get into
the business of settling payments for phone calls handled by more than
one ISP, says less than 1% of international long distance will switch to
the Internet next year-but that will still amount to about $1 billion.
Domestically, he adds, commercial Internet telephony will have a very
limited market made up of extremely price-sensitive callers.
Nobody can guarantee predictability on the Internet backbone today,
but Evslin, the founder and former head of AT&T WorldNet, says that
might happen on privately managed routes. Officials at Bellcore, the
research arm of the Bell companies that is now owned by Science
Applications International Corp. in San Diego, say IP telephony will
take off on such a network that runs parallel to the public Internet.
IDT Corp., an ISP in Hackensack, N.J., is testing IP lines dedicated to
telephony that extend to South Korea and Japan.
Other companies reportedly are building IP networks for voice. The
idea "seems to run counter to what every telco wants to do, which is to
converge their networks" to ease administration and cut costs, says Eric
Paulak, an analyst at Gartner Group Inc. He says IP may be useful for
voice mail, but is skeptical about real-time voice over IP. "Can we fix
every problem?" he asks. "Yes, but there are very large costs that can't
necessarily justify the investment" in network infrastructure.
IP telephony in the corporate world may make sense only for those few
companies that have their own IP networks. "It's one thing for somebody
to say, 'I can slap a product on your LAN that allows you to talk voice
across the network,"' says John Parsons, director of strategic telecom
planning at Eastman Kodak Co. in Rochester, N.Y. "But it's another thing
to build a global voice network and have it work" at a reasonable cost.
"We've got a pretty cost-effective, high-quality voice network in the
company," he adds, "and we're not prepared at this point to jeopardize
it by experimenting."
Adds De Repentigny of Frost & Sullivan, "The main challenge for IP
telephony is to move from cheap phone calls to an enhanced communication
service. It [has to add] value because we can do more than just voice."
Word Count: 932
1/5/98 INFWK 45
END OF DOCUMENT |
