The impact of IP
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IP communications promise to revolutionise the way organisations do business.
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Internet protocol, or IP, has been the de facto standard for transmitting data across enterprise networks for decades. Over that time, numerous industry observers have predicted how unstructured data - such as voice, video or other rich media - would converge onto networks and be able to move around them with as much ease as structured data.
Repeatedly, however, those predictions did not materialise. Frustrated network managers at early adopter companies reported problems with packet loss and delay, moaned that voice and video over IP consumed too much bandwidth, and that end-users were reluctant to adopt the newly converged systems.
But this could all be about to change. The technical problems, for the most part, have been ironed out thanks to improvements in quality of service (QoS) technologies and management systems. And during the course of the last two or three years, high-speed, high-bandwidth Internet access has become more widely available and much more cost-effective. All of these factors make the convergence of traditionally separate networks onto a single IP backbone more attractive than ever.
"Until a couple of years ago, it was laughable to think of running voice over your data network," says market watcher Jerry Caron of Current Analysis. "But there is a
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In fact, major corporations, such as IT services company Cap Gemini Ernst &Young (CGEY), are now embracing the potential business benefits of converging everything onto IP. In early 2003, CGEY invested in an integrated data, voice and video network that connects 12 of its offices across the UK. The total cost of ownership of the system, according to Tom Fryar, CGEY's director of network services, is almost 50% less compared with the hardware and software maintenance fees it had paid for its existing system.
And while the cost of some IP-compatible equipment - IP 'soft phones' for example - may still be higher than traditional handsets, suppliers argue that organisations can make longer-term savings from centralised network management and improvements in employee productivity (see table, 'Business benefits of IP communications'). The cost of calls between offices on the same network, for example, is greatly reduced by consolidating voice networks onto a single IP backbone.
More than TCO
Lower total cost of ownership is frequently cited as the main business benefit of moving unstructured data to IP, but there are other advantages. In the past, voice and data networks have been managed as separate 'stovepipes', so any business processes that involved both - for example contact centre integration with back-end systems - would require costly and time-consuming integration of not just applications but the networks themselves. Within a single, converged network, it is easier to introduce new applications - and users - as necessary.
Another major benefit is the ability to work more flexibly. Hotdesking or working remotely becomes far more practical, since employees' network 'identities' can, in theory, be moved around to any point on the network, whether that is a traditional phone, IP soft phone, mobile phone or even PDA.
And because these identities are centrally managed, there are fewer issues with remote support or access to emails held at work. One research study found that if the leading 100 UK companies
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Applications such as video conferencing, collaboration and e-learning are also made easier over a converged IP network, as QoS technologies are now mature enough to intelligently allocate bandwidth to where it is most needed. So if an organisation wishes to send out a corporate video message over the network, this could take priority over email if required. Networking giant Cisco, for example, has saved more than £130 million by rolling out training programmes over an IP network.
Slow ascent
But despite these apparent benefits, full-scale adoption of IP for voice and video, not to mention storage over IP, remains gradual. A recent survey of early adopters of IP telephony by Compuware, the systems management software supplier, found that 43% of network managers could not get management buy-in for the new technology, with 22% stating concerns about the performance of voice traffic across an IP network. Buy-in for less prominent applications, such as video, is even lower.
Performance problems have not been the only source of concern. There are also worries over the security of IP as a unified communications mechanism. While data security is a long-established discipline, ensuring the integrity of packetised voice or video streams will pose a new challenge for many organisations.
Training is another issue, particularly in the case of IP telephony, where the overwhelming majority of users will find traditional telephony systems second nature, and may be resistant to adopting new, IP-based voice communications. Employing 'floorwalkers' or external trainers to educate these employees, as premium drinks company Diageo did (see feature, IP in practice), can add significantly to the overall cost of acquiring the new system.
So what will drive adoption? There are three key factors. First of all, greater and cheaper access to high-bandwidth networks. Gartner, the IT analyst group, expects businesses to increase bandwidth by at least 75% every year between now and 2006. That is bound to make organisations more receptive to new, IP-based applications, such as video conferencing.
Second, many organisations are coming to the end of the product lifecycle with their existing, private branch exchange (PBX) phone networks, which should
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Finally, more and more organisations are moving towards more flexible ways of working. In April 2003, the Department of Trade and Industry introduced new legislation allowing more flexible working arrangements for parents, which could accelerate this shift in corporate culture. Because all applications and users on a converged network tend to be managed centrally, it becomes far easier to track and support these workers and to allow them access to applications as though they were in the office.
The wait continues
But the creation of a truly 'borderless' organisation will not happen overnight. Many IT directors have chosen to postpone their investments until the technology matures and equipment and software prices fall further. Others are opting for a gradual approach to adoption, rolling out IP telephony and video streaming technologies bit by bit, branch office by branch office.
In addition, many organisations do not want to throw out existing systems in which they have invested years of skills and still perform well. Brian Condron, business development manager at Omnetica, the network integrator, says that better interoperability between IP and old circuit-switched technologies has made it possible for organisations to move gradually to an all-IP environment. "Organisations have got a lot of money invested in PBXs. We try to develop a convergence strategy with our customers, so that they can integrate IP into their existing voice infrastructure," he says.
Ultimately though, the vision is of a converged, centrally managed, intelligent IP network where applications and users can be added in far shorter periods of time, and managed from one central console. David Dockray, general manager for Europe of IBM's Business Consulting Services, is confident that IP will transform the fundamentals of business, sooner or later. "And," he adds, "the CIO has a massive opportunity to be the architect of this transformation."
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