IP telephony: Not just talk

Telecommunications costs can easily escalate if not monitored and managed. One way to better manage this--and get other benefits such as higher worker productivity—is to deploy IP telephony.

For years, the promise of integrating voice with data on the same network has been making the rounds in the IT space. The significantly lower cost of operating an IP network compared to alternative offers such as leased lines translate directly into significant savings, especially for small and medium-size businesses (SMBs).

IP telephony is becoming popular as it uses the Internet and intranet to deliver real-time communication between callers at a lower cost. More service providers today are entering the market with new IP telephony services to meet the demands of customers with limited capital expenditures. As more proprietary and open systems-based communication tools are integrated, current IP telephony users can expect greater cost savings and expanded functionality. Some of these new features include customer response applications, click-to-talk, unified communications, web conferencing and personal assistance.

The IDC study noted that over the next three years, IP telephony promises to be as revolutionary to traditional telephony as the PC was to the mainframe 20 years ago.

The broadening of existing IP-based networks to include more data types is seen as a logical step towards higher productivity. SMBs today are relying more on intranets and IP-related systems because of the cost savings they provide. Without having to invest in new hardware, SMBs can now embrace IP telephony as a way of extracting even more value out of their existing infrastructures.

Success down under
Companies in Australia have been some of the earliest adopters of IP telephony in the Asia-Pacific, along with Singapore, Hong Kong, South Korea and New Zealand, according to Gartner.

In a recent IDC study, the VoIP services market in Australia is predicted to almost double every year over the next four years from AUD$14.3 million (US$9.8 million) in 2002 to AUD$288 million (US$198 million) by 2007 at a compound annual growth rate (CAGR) of 62%.

Like larger corporations, SMBs also need to improve performance and remain competitive. An IP telephony solution specifically tailored for the total communications needs of SMBs has to fill the gap between yesterday's PBXs and tomorrow's cost-effective IP solutions.

The IDC study noted that over the next three years, IP telephony promises to be as revolutionary to traditional telephony as the PC was to the mainframe 20 years ago. IP telephony applications have built-in reliability mechanisms that facilitate personal mobility, call forwarding, e-mail, and multicast conferences, to name a few. With these features, SMBs have more opportunities to conduct business with partners and customers over the Internet.


As an indication of the growing importance of IP telephony, IDC noted that Microsoft has integrated IP telephony in its recently launched Live Communications Server 2003. This new server enables voice transmission over data networks and allows further integration with Microsoft Office applications including Outlook.

An example of IP telephony in action would be an Outlook user receiving an e-mail and being able to tell if the sender is currently available online. He can then initiate contact directly from Outlook, using voice, instant messages, video or chat. IDC foresees this type of integration deepening with the next release of Windows, which is expected to contain web service features that enable applications such as ERP (enterprise resource planning), CRM (customer relationship management) and call centers, to be seamlessly integrated.

For instance, if a customer calls to ask for a refund on a faulty product, the integrated system will extract information about the item from the ERP database. If the item is from a batch of goods known to be faulty, a Return Merchandise Authorization will be issued to the customer instantly, cutting down on processing time and customer frustration.

Stretch that dollar
Improvements in IP telephony have led to more efficient bandwidth usage, allowing SMBs to stretch their dollar. Government, education, healthcare, finance, and manufacturing are just a few industries that have benefited from IP telephony. SMBs can take the cue from these successful implementations and start realizing the similar benefits within their organizations. The types of applications are as flexible as the technology itself, ranging from unified messaging, distance learning, online banking, and real-time inventory tracking.

HP and Avaya have jointly developed the IP Office Solution that leverages on existing local area nework/wide area nework (LAN/WAN) infrastructure. It is designed for businesses that wish to support voice and data networking on one or more sites. The system is flexible enough to manage various configurations, including a PBX phone system, a messaging center and even a conferencing solution that can accommodate 64 people on a call.

IP telephony can give your business a cost advantage while adding on a whole spectrum of services.

Clarence Cho is director of SMB Marketing for HP Asia Pacific. He is also a member of the CNETAsia SMB Advisory Board.