Payoff proves elusive for voice/data nets
zdnet.com
By Scott Berinato, PC Week Online
July 27, 1998
Is voice/data integration worth it?
Network administrators have plenty of
technology available to consolidate voice
and data onto a single enterprise network.
Now they have to make a business case to
justify converging the two.
That case doesn't exist yet, according to
Forrester Research Inc., which this week will publish a report saying
large enterprises "won't bother" with large-scale migration to a
converged network.
The report involved a survey of 50 Fortune 1000 companies and many
vendors in the space. It cites two reasons for skepticism: The cost
savings are not as great as perceived, and the reliability of a data
network does not rival a voice network.
Forrester's contrarian view is sure to spark debate. Some users agreed
with the premise of the report and blamed vendors for creating a mass
of hype surrounding the technology. Others discount those claims and
are moving ahead with their voice/data convergence plans.
But the report underscores a prevalent fact: IT must now, more than
ever, demonstrate the strategic relevance of a project before winning
approval from top executives.
"You need substantial cost savings to justify [voice/data convergence],"
said James Wiedel, director of networking at the University of Southern
California, in Los Angeles. "We have a new CIO, and you can say to
him, 'Yeah, we ought to save ...' but to prove it is much trickier. There
are just more people watching things now."
Wiedel has some faith in the concept of convergence, but he's skeptical
of broad-based uses of the technology.
A network administrator at a Fortune 1000 financial institution in New
York faces the same concerns. His three-year network strategy includes
no voice/data integration.
"We're interested in the technology, but the people above us in our
company can see that it would be a major investment," said the
administrator, who requested anonymity. "They really make us convince
them to do [a project]. Right now, we have no capacity on our T-1
lines."
But the business barriers to the justification of voice/data convergence
include more than just financial factors.
Bruce Johnston, a former telecommunications manager and now CEO
of security consultancy VGS Inc., in Hollywood, Fla., sees three
problems with combining voice and data on one network: reliability of
that data network, staffing issues that arise when IT and
telecommunications are combined, and, perhaps most important,
security.
"I don't know of a product that will secure voice effectively," Johnston
said. "That's another business reason not to do it. It's data going through
a server. I could probably listen in."
Even the cost savings aren't straightforward. Large enterprises typically
have close relationships with long-distance carriers and can demand
lower service rates.
"Many Fortune 1000 companies have rates as low as 5 cents per
minute," said Maribel Lopez, an analyst at Forrester, in Cambridge,
Mass., and one of the report's authors.
The Forrester report compares traditional long-distance service to a
converged network with one 64K-bps channel, which can carry four
voice calls, and concludes that a corporation won't recoup the
equipment costs of convergence for between 12 and 24 months.
"That's too long when you have a reliable network in place and the cost
of long-distance coming down," Lopez said.
Another view
Not everyone agrees with Forrester's conclusions.
"They're missing the point," said Peter Alexander, executive director of
marketing for Cisco Systems Inc., in San Jose, Calif., a strong
proponent of convergence. "You do have to prove your business case,
but that's rarely just based on saving money. It's doing more with fewer
resources. It's like if you had two highway infrastructures, one for cars
and one for trucks. The ability to converge those roads means greater
total traffic throughput at a lower cost."
Alexander points to similar resistance over running mainframe traffic on
an IP network. Despite naysayers, that traffic is migrating to the IP
world, he noted.
Some believe the movement toward a converged network is inevitable,
but it will take root in smaller companies first.
"For the Fortune 500, it may take a bit longer, but it will happen," said
Lisa Allocca, an analyst at Renaissance Worldwide Inc., in Newton,
Mass.
"Where convergence is incredibly compelling is the small and medium
business," Allocca said. "This trend could help those smaller guys look
like the big guys in terms of voice applications they can't afford." |
