Phone services hit the Internet [PSIX/ASND VoIP], by Denise Romberg
[All, Thanks to djane on the ASND thread.
Note that this is an early example of what I was referring to in my previous post, concerning integrated solutions. Frank]
plesman.com
Vying for an edge in the hot voice services market, Internet service provider (ISP)
PSINet announced recently it will launch the first phase of its Voice-over-Internet
Protocol (VoIP) service aimed at businesses. Analysts, however, say the
technology suffers from both hardware manufacturer hype and significant barriers
to wide acceptance.
PSINet's suite of Internet telephony services, known as PSIVoice, will be available
initially to its 39,000 business customers, allowing firms with private branch
exchanges (PBX) to route voice calls directly across the Internet.
According to the company, the iPEnterprise service will provide customers with
turnkey voice services equivalent in performance to traditional dedicated telephone
line PBX service and cost savings of as much as 50 per cent. PSINet said its VoIP
service will also include simplified dialing codes, desktop faxing, conference calling
and unified messaging.
The voice service market has become quickly populated by many different
vendors, not all of whom share the same vantage point, explained Louise Labuda,
director of marketing at Vienna Systems Corp. in Kanata, Ont. The telephony
equipment provider is an affiliate of Newbridge Networks Corp.
Corporations electing to implement VoIP service will need to choose between
deploying it through an in-house infrastructure to eliminate monthly voice service
fees (which requires the capital expenditures and management costs for new
hardware), or an outsourced solution such as that offered by PSINet, which leaves
the control and management in the hands of an ISP.
"At the end of the day, everybody is after the same packet. Everybody sees the
convergence of voice and data and it's just a matter of which network are you
going to use and who's going to have the boxes for the IP network. Is it going to be
the traditional voice vendors or the data vendors?" Labuda asked.
A study published early in August by Forrester Research, Inc. of Cambridge,
Mass., contradicts vendors' claims that IP telephony can reap savings in long
distance telephone charges. Researchers called the implementation of one network
where corporate voice and data communications converge a dream that will
achieve only minimal cost savings.
The study, following a survey of 50 Fortune 1000 companies, says that cheaper
phone bills and reduced network administration have been hyped by the
networking hardware manufacturers who overlook the complexity of administering
integrated networks. For most companies, assuring predictable performance for
data transmission already taxes network administration without adding the further
demands of voice traffic.
"The reason for doing this (VoIP) is to save money; there are no new compelling
applications, so unless you had a lot of international traffic, we found it wasn't
worth the hassle, you didn't save a lot of money and it took a long time to break
even," explained report author Maribel Lopez. "This might work for small
businesses that don't have good phone rates and it works for consumers who are
looking at a difference between 10 cents and one and a half to three cents a minute,
depending on the quality they want."
Lopez pointed out that most of the Fortune 1000 companies are paying about five
cents (U.S.) per minute for their long-distance calls. "I didn't get into the costs you
would eat up by migrating your network over, I just did a straight calculation of
cost and I couldn't come up with a justification," she said.
The technology, still in it's infancy, "is not reliable enough for companies to use as a
primary type of telephone connection because the quality is definitely not as good
as the telephone system," says analyst, Ruth Chatterton of TeleChoice, Inc., a
telecommunications consulting firm in Boston, Mass.
She added that data and voice convergence is an economic decision and
corporations must see good economic advantages and increased efficiencies before
combining voice and data networks. While VoIP could be an option for
long-distance telephone calls, "I'm pretty cautious, I don't know if companies will
ever really 100 per cent switch over," she said.
There are just too many concerns at this time, not the least of which is prioritizing
voice packets so that they "don't get trapped behind the bigger Mack truck kind of
data packets." Schemes that determine message priorities are one of several
standards related issues yet to be resolved, Chatterton said.
Jeff Phillips, a TeleChoice analyst in Tulsa, Okla., pointed out that other issues
which can slow down implementation concern the allocation of Internet connection
costs and developments in VoIP technology that will permit callers to use Internet
telephony by following similar procedures and accessing services such as those
available through their current office telephone equipment.
While PSINet may be enjoying an advantage over competitors who have not yet
experimented with the technology, Chatterton said, "it's a short term advantage, like
any technology. Just as fast as you can adopt it, somebody else is too, so you have
to get better at it faster than they can."
The second phase of the PSIVoice service, iPEnterprise Plus, is due later this year
and will add voice communications to corporate extranets. The third service of the
suite, IPGlobal, is aimed at the consumer market where PSINet plans to deploy
gateways that will interconnect with the public switched network (PSTN).
PSIVoice operates on Ascend Communications Inc.'s MultiVoice architecture
designed to deliver voice and fax over IP, frame relay and asynchronous transfer
mode (ATM) networks. PSINet customers will need to add Ascend MAX 2000
or MAX 6000 routers installed and connected by PSINet to existing PBX systems
and networks.
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