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Thursday, June 19, 2008

IP Telephony is Dead

I see dead phones. They don't know that they're dead. First an explanation so you don't think I'm mad? IP Telephony is the replacement of traditional PBX and PBX telephones with an IP enabled PBX and hardware IP telephones. In evolutionary speak, IP Telephony is the first descendant of the traditional PBX. The first "killer app" for IP Telephony was the software based phone. And perhaps a bit too literally, it killed the hardware IP telephone – albeit a slow and costly death for enterprise adopters.

Some history. Packetized voice has been around long before IP Telephony existed (would you believe 1973 – Network Voice Protocol (NVP)). It wasn't a stretch to think voice could be transmitted as easily as e-mail. Development of acceptable Coder/Decoders (CODECs) to transmit quality voice from endpoint to endpoint spurred Internet use by end users in the 1980's.

Then along came Instant Messaging (IM). Not that different in theory from Internet Relay Chat (IRC) except the interface – the "buddy" list allowing you to see if your friends were online (presence) – was a big hit. Soon, voice and video capabilities were merged with IM clients and hybrid software phones like Skype provided the presence interface and the ability for users to contact traditional Public Switched Telephone Network (PSTN) phones. Traditional phone numbers still play a role, but Session Initiation Protocol (SIP) is the leading candidate to abstract this layer. Think of SIP as Domain Name System (DNS) for telephone numbers – although it is much more than just that.

The issue lies in equating voice with phones. Voice is a structured data type in the same way a Comma Separated Value (CSV) file is a structured data type. You don’t need Microsoft Excel to look at a CSV file and you no longer need a traditional phone to communicate with voice. The phone number is an artifact of the PSTN. With SIP, voice will be delivered to you – as will IM and other communications – regardless of the device you use, as long as the device supports the communication method. This means you aren't tied to a single device by a unique "phone number". Your SIP address follows you, not your computer or your mobile phone.

This freedom of movement – mobility – is the single most important driver, from a user perspective, for technology today. The ability to get information (data, voice, video) when I want where I want without regard for end device, location or network is the most appealing enabler for a user. We use wireless at home, at the airport, at trade shows, even in conference rooms at work. We don't use wireless at our work desktop. Why is this? Throughput? New wireless standards (currently 802.11n) will address this. When users move to wireless at the desktop, enterprises will begin to realize impressive cost savings.

When we consider mobility as the driver, there are three advantages to consider when euthanizing IP Telephony:

POWER:
Carbon footprints and green initiatives cause worry about power consumption in our data centers. Yet, we are increasing the power in communications closets - in some cases to 12,000 Watts per switch (reference Cisco 6500 Serices with 2x 6000W power supplies) - to enable power delivery to Power over Ethernet (PoE) devices. This may be justified for wireless access points that enable multiuser access, but it is wasted on overbuilt, color screen IP telephones that sit on desks where telecommuters will never use them.

TELECOMMUTING:
Whether rising gas prices are the final catalyst or not, telecommuting rates have increased since early 2000 and will continue to do so for knowledge workers. Formal plans by US government agencies mandating a certain percentage of users must telecommute will spur mainstream and private sector adoption. A remote worker doesn't require the hardware desk phone at the corporate office. A truly mobile user has a laptop and a mobile phone - perhaps with email capabilities - that enable him to move freely throughout and outside the enterprise. The desk phone, even with extension mobility services, is an anchor that ties the worker to the static location of where ever the hardware phones are located.

ROI:
Let's assume we have 100 users on 1 floor of a building. Assume we have an IP PBX (in this case, Cisco Unified Communications Manager). Assume we are including wireless (at least a/b/g) in our planning.

IP Telephony (PBX replacement):
  Access Point (a/b/g) = $899 (+$400 for n) x 10
  Standard User Desktop Phone (7962) = $505 (+$90 for color) x 100
TOTAL: $59,490 ($72,490 for n wireless and color phones)

"Unified Communications" (without IPT):
  Access Point (a/b/g/n) = $1,299 x 10
  Unified Personal Communicator (software phone) = $50 x 100
  Cisco Personal Video and license = $160 x 100
TOTAL: $33,990

*NOTE: These estimates do not include licensing, which will be similar in both cases. Hardware and software phones require licenses and costs can be minimized with bundles depending on what other services (such as presence and voicemail) are included.

This 43 to 54% reduction in capital alone may justify the elimination of hardware phones when scaled across a larger enterprise. Also consider:


  • Assume this is a new floor. Communications closet Local Area Network (LAN) switch costs can be minimized by purchasing a switch that provides 10 ports (for the access points) versus a switch that provides 110 ports (for 100 users + 10 access points) and the additional power to drive 100 Power over Ethernet (PoE) phones. This of course leads to a reduction in operational costs related to power.
  • Assume this is a new building. Structured cabling costs can be minimized by eliminating multiple drops to each end user desktop since wireless will be the primary access method.
  • Assume your users want to be mobile or use desktop video even some of the time. This is included in the “unified communications” option, but with the "traditional" IPT option, you still need to purchase a software phone and camera to enable this (+$21,000 to the $59k or $72k base cost pushing the savings of unified communications up 58 to 64%).
  • Assume you include a mobile phone and plan for your users. A standard business-rate unlimited minutes/unlimited data plan from a GSM carrier is about $100. At this price, you can provide mobile phones for all your users and still be under the cost of the base "traditional" IPT option.


Finally, are you currently including Moves/Adds/Changes (MAC) in your unified communications ROI? How about reducing current MAC costs from X dollars to $0? With hardware IP phones, users *can* perform their own MACs by moving their phones as they move cubes. But without hardware phones, mobile users equipped with software phones connected via wireless perform their own MACs without even being conscious of it. Every time they move their laptop - to a conference room, to a new cube, to their home office - they eliminate requests, dispatches and any overhead associated with traditional or even IP Telephony related MACs.


Hardware phones will not disappear like an extinct species – at least not in the foreseeable future – so declaring the death of IP Telephony may be a bit dramatic. However, the traditional notion of the office is changing and along with it, the traditional accoutrements of office life are dying. Cubes are becoming open workspaces. Permanent desk assignments are giving way to "bullpen" areas for mobile workers. Desk phones will disappear. Perhaps we'll see service providers blanket new buildings with WIFI antennas instead of structured cabling. Wireless will be delivered to occupants as power is today. Future enterprises will have a much smaller "brick and mortar" footprint and exist mainly as virtual corporations comprised of mobile knowledge workers, outsourced systems and offshore manufacturing and development This isn't far-fetched; it exists today.

Enterprises now looking at IP Telephony are late in the game. The dynamic has moved to unified communications. Two years ago, when asked what unified communications was, people would talk in the abstract and most certainly include IP Telephony. Today when asked, people point to Microsoft Office Communicator or Cisco Unified Personal Communicator. While these applications do not encompass the whole unified communications vision, unified communications is moving closer to being defined as an application than it ever has been. As ubiquitous communication penetrates the market, there are high level recommendations that must be considered before a decision is made.


  • Don't lock into an IP PBX that allows only a specific hardware phone. Instead, look for feature and functionality that don't necessarily replace traditional PBX features, but instead offer new IP-based services and integration with legacy systems – not replacements for them. This is of utmost importance to smaller companies with large communities of mobile workers. Displacement of hardware phones doesn't hinder competition with large companies, only comparison with them. Agility of a mobile workforce is the differentiator for the new economy.
  • Single number reach is now an important feature for IP PBXs and will continue to be for as long as phones – mobile or otherwise – provide only a 10-digit numerical keypad interface.
  • Integrate mobility in any voice solution considered.


Each year, more US homes discontinue use of a traditional telephone and use only a mobile device or move to an Internet based telephone service. If we look at the “Web 2.0” example and agree social networking has a place in the corporate setting because users demand it, the converse must hold true. Enterprises have the opportunity to shape their users behaviors by leading the displacement of desktop phones while providing cost savings and mobile solutions for their workers.

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