BIoT Canada

Slow Conversion

Companies are certainly considering technologies such as VoIP in order to reduce costs and increase productivity, yet it will likely be well into 2004 before integrated voice and data services overcome both technological and economic hurdles to gain wider acceptance.

October 1, 2003  

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The idea of using one network to run voice, data and possibly video has held wide appeal for some time among people working in the telecom sector. The chief reason is that it costs less to run everything on one network. Thus explains the beauty and simplicity of convergence.

Yet, most companies continue to run two separate networks. “You have your voice guys and you have your IT guys,” says Mark Quigley, research director for Yankee Group Canada in Kanata, Ont. For the most part, convergence seems like a good idea, both economically and technically, nevertheless companies have been slow to adopt it.

“In the telecom sector, we have long talked about the convergence of voice and data networks,” Quigley says. “There have been a number of trials that have taken place in various places, but none has resulted in a terrific amount of mainstream appeal.”

Why has such a technologically advanced idea not taken off? There are a number of reasons, among them the sluggish economy, technical and marketing glitches and buyer caution. Since the bottom fell out of the telecom sector a few years ago, companies have become much more cautious in adopting new and emerging technologies. That prudence extends, for the most part, to IP technologies like voice over IP, or VoIP.

That decided lack of enthusiasm, or circumspection, is apparent in the words of David Potter, an industry consultant and president of Dallas-based Source Inc., a supplier of technical services and telecommunications equipment. “Voice is primarily switched networks using digital technology,” Potter says. “A phone is an appliance like a dishwasher – it has a fixed base.”

Even companies that are working on convergence technologies are more careful in their language. As Anja Allen, director of convergence solutions for Enterasys Networks in Reston, Va., puts it: “We have figured out a way to run voice over an IP network. Yet, all we have changed is the method of transmission.” (see sidebar, True Convergence.)

That being the case, businesses, both large and small, are asking hard questions, such as if they do deploy IP voice services, how does that reduce operating expenses? Does it increase productivity? Is the technology proven, reliable and secure?

While companies have always kept a close eye on finances, today’s version of fiscal restraint can be attributed to what took place during the bullish 1990s, when the marketing departments of phone-makers were loudly proclaiming the merits of VoIP, citing it as the next revolutionary technology that would alter the way businesses operate. “There was general disappointment of the technology, because it did not keep its promise to save costs and increase productivity – its marketing slogans of the last few years,” Allen points out.

“In reality, there are a lot of technical barriers that convergence faces before it is accepted by a large majority of enterprises.”

Security Concerns

Two concerns stand out: Security and management. As to network management, companies tend to focus too narrowly on deployment, namely, whether the network is voice-ready. “When you add voice to your IP network, you still have other critical applications in your network,” Allen says. “So, what you have to look at is how you can manage voice as well as all the other critical applications on one network infrastructure – the IP network.”

Part of the problem, as Allen sees it, is that the IP network is evolving as a more complex infrastructure. “We are not going to immediately reap the benefits and see a lower cost of ownership, because companies will have to hire more people to ensure that the network is effectively managed,” she says. That begs the question of whether cost savings will be swallowed up by the need to hire more people?

Another issue is network security. Before companies adopt pure IP telephony technologies, they ought to be confident that the system is secure. Given that IP phones operate over the data network, they are vulnerable to a host of security breeches, including electronic eavesdropping, hackers and denial of service attacks. (see sidebar, Sniffing Around.)

Allen cites a plausible example of a disgruntled IT employee. “He doesn’t like the CEO, or he just got fired. He starts running a denial of service attack against the CEO’s telephone or, perhaps worse, against the telephones of customer service.”

Even so, Quigley says that although such concerns are real – and become more noticeable when viruses or worms make the news by attacking the Internet – companies like Cisco Systems and 3Com Corp., makers of IP phones, are addressing such security concerns.

Jerry Gushue, accounts manager for Atlantic Canada for 3Com Corp., says that although many customers raise the issue when viruses like “Sobig” hit, it’s not typically an issue raised by companies. “Data is sent in packets, so it would be hard to reassemble a voice conversation,” says Gushue, who is based in Dartmouth, N.S.

Some Bright Spots

Security concerns notwithstanding, there are regions in Canada where inquiries go beyond curiosity, and have translated to outright adoption. “In the Atlantic region in which I operate, interest is rising,” Gushue says.

Most of his inquiries come from small- and medium-sized businesses, looking to install between 10 and 15 phones. That fits within the norm. Most companies start out with a test bed of between 25 and 30 people, and start to increase the number of users very slowly. Yet, Gushue said that he recently had an inquiry from a software firm looking for 100 sets.

One of the early adopters in Atlantic Canada has been Halifax-based Maritime Steel and Foundry Ltd., which have installed two IP telephony systems at its facilities in Nova Scotia since the middle of 2001.

Each system is the equivalent of eight lines. The manufacturing company installed the first system at its facility in Dartmouth and the second in New Glasgow, both of which are 3Com IP systems.

Sean Green, manager of information systems for the company says the company has saved money by cutting back on the administrative costs of managing the phone system, reducing long distance calls and removing the fees for service calls.

The two systems are connected through a 3Com Virtual Tie Line, which gives networked telephony capabilities to its three locations in Nova Scotia. The two locations in Dartmouth, about one kilometre apart, are connected via a Lucent wireless bridge. Employees of the company dial an extension to reach each other.

When an employee receives a voice-mail at the office, the system saves it in WAV format, or a media file. “That media file is immediately E-mailed through my Microsoft Exchange server to the appropriate person’s folder,” Green points out. “So, you could be sitting in London, England, open your laptop and pull up your E-mail and retrieve voice messages.”

The company is saving about $500 a month in long-distance charges. One of the selling points was price. Three years ago, it would have paid 20 per cent more for an IP system than for a traditional system, such as one that Nortel makes. “But now the prices are very competitive,” Green says. Maritime Steel paid $25,000 for the 25 IP phones and associated hardware.

Another benefit is that the phone system operates from a separate server. Thus, if the computer system crashes, the phone system still functions. That’s a plus, and a necessity if VoIP is to compete with legacy systems. “Telephone systems hardly ever break,” Potter says. “That’s what IP voice and data face to gain public acceptability.” Such goes a long way to prove reliability (See sidebar, The Pioneering Spirit.)

Waiting Patiently

As for true convergence, Gushue says it will eventually take place because “one really drives the other. So, once a company has installed a IP system, it will look for data solutions.”

One potentially large customer is the federal government, which has not deployed VoIP in a large way. “One of the challenges that the federal government faces is that they are tied into a traditional system,” Gushue says. “It will take time.”

ad of the exponential growth of the telecom sector that occurred in the 1990s, it’s now all about a slow evolutionary process. “It’s not the industry driving the technology,” Allen points out. “It’s the customer.”

True enough. The language now is more careful, more temperate, and free of the hype of the go-go ’90s. What will it take for VoIP to take off, and become as common a fixture in corporate offices as desktop computers? “There is less inclination to spend money today than three or four years ago,” Quigley of the Yankee Group points out. “Once we start to see budgets open up, then we’ll see a difference. I suspect that won’t take place until the end of 2004.”


True Convergence

In its purest form, convergence speaks about taking such services as voice, data and possibly video and other emerging technologies and integrating them onto a single transmission line.

In VoIP, conversations are carried over packet-switched data networks via Internet Protocol (IP). VoIP networks treat voice as another form of data, but use sophisticated voice-compression algorithms to ensure optimal bandwidth. Consequently, VoIP networks can carry more voice traffic than traditional switched circuit networks. Instead of private branch exchanges (PBX), VoIP technologies use server-based PBXs running on Microsoft Corp.’s Windows NT or a vendor’s proprietary operating system.

IP-based technologies tend to benefit companies that want to connect employees working in different locations. For example, IP systems allow LANs to share data, staff to phone each other and transfer calls without having to pay for long-distance charges. Convergence’s appeal is cost savings, because as Mark Quigley, research director of Yankee Group Canada puts it, “you are just running one network.”



Electronic eavesdropping is a concern for organizations using VoIP. Given that voice travels in packets over the data network, unscrupulous people can use data-sniffing and other hacking tools to identify, modify, store and retrieve voice traffic moving through the network.

“The phone service on an IP network is vulnerable to the same things as data networks,” points out Anja Allen, director of convergence solutions for Enterasys Networks. “Chief among them is denial of service (DOS) attacks, which could potentially bring down your phone system.”

Equally important, a hacker breaking into a VoIP data stream can gain access to a lot more calls than he would with traditional telephone tapping methods. Part of the solution can be found in encryption methods, firewalls, and routing all traffic through a gateway server to eliminate a direct connection to the Internet.

The U.S. federal government says that it will not incorporate IP telephony solutions, at least in what it deems security-sensitive areas like the military and security services, unless the IP technology incorporates Advanced Encryption Standard (AES) encryption, which was released last year.

Perry J. Greenbaum is a writer based in Montreal and New Hampshire. He can be reached at

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