The case for IP networks

Unless a business has the luxury of moving operations to a green-field site, CIOs today usually have to manage a range of networks. These might include networks for voice telephony, a wired backbone, a wireless local area network (LAN), and dedicated networks for applications such as video and building management. They may also outsource to several external providers.

Should businesses cut the number of networks or even migrate to a single network based around IP standards? Just as an IP network can fill a number of roles, so the business case for a unified network will need to look at all the components.

Research analysts Gartner found that in 2003, 45% of all enterprise private branch exchange (PBX) shipments in North America supported IP telephony.

IP telephony is attractive to enterprises because it allows them to make more effective use of their network bandwidth, by sharing it between conventional LAN data traffic, voice and eventually video calls.

Moving to an IP-based network raises the prospect of ending support for existing private voice circuits and local extension wiring, instead relying on the Ethernetbased LAN and the IP-based wide area network (WAN).

However, shipment figures for IP telephony are fall well short of showing a full migration to voice-over-IP (VoIP) systems. Gartner does not expect the number of IP lines to exceed the number of conventional time division multiplexing (TDM) lines at least until 2007 and it points out that handsets will migrate to IP much more slowly than central office switching equipment, which is often sold as ‘IP ready’ but is in fact a hybrid system that can support both IP and TDM traffic.

Putting together a business case for a unified, IP-based network will depend on a realistic assessment of both the organisation’s communications needs and the capabilities of the existing LAN, WAN and Internet interconnections. Analysts recommend that companies undertake a thorough survey of their network before embarking on any move to VoIP. The mission-critical nature of voice in most businesses, and the fact that voice traffic can stretch the capacity of networks not designed to support it, means that a VoIP migration will not always be simple.

Not only will organisations need a fully switched network to the desktop, but they will also need switches and routers across the LAN that are VoIP aware (because voice packets often need to be prioritised).

Running video calls over the network makes the choice of hardware even more critical. To anticipate problems, analysts recommend that clients run a departmental pilot before attempting a corporate-wide roll out.

The main networking vendors now have equipment that supports converged networks. Cisco’s integrated services router (ISR), for example, was designed for this type of application, but sells at a premium.

The cost savings from integrated networks, for example from reduced PBX and network maintenance charges and reduced billed telephone calls, can be significant, but will come over time. More intangibly, productivity will increase. Against this, businesses have to set the cost of upgrading their switching infrastructure, investing in the VoIP central control unit, and possibly running additional Ethernet ports to the desk. And, of course, they may need to buy IP phones for every employee.

For this reason, some of the most successful customer references for converged networks are green-field sites. North Wiltshire District Council, for example, has moved its 300 staff into purpose-built offices near Chippenham. The organisation has installed an integrated IP network with a VoIP system from vendor 3Com both at its headquarters and at two smaller offices.

The local authority was forced to adopt a new system as it could not transfer its existing PBX to the new site. Nonetheless, Pete Barnett, senior team leader in NWDC’s ICT department, believes that the integrated network and VoIP will pay for itself through greater flexibility, easier configuration and greater functionality.

Other large VoIP deployments, such as at Abbey, the high street bank, have been driven by the need to cut out call charges or fees for renting private circuits between offices and branches. Abbey has migrated its retail branches to a Cisco VoIP system. Other retailers are looking at similar solutions: the smaller the outlet, the harder it is to justify running two networks.

More recently, Lloyds TSB announced a huge programme to migrate its entire applications network, including voice, onto one IP network. The project is vast, costing tens of millions, involving more than 10 different types of networking device, and some 70,000 IP phones. It is forecasting substantial savings – but only over many years.

A more important goal is flexibility. “For Lloyds TSB, the adoption of IP telephony will enable them to drive a profound transformation in their business communications by combining voice, video and data into a rich media experience,” said Chris Dedicoat, senior vice president at Cisco.

In organisations such as financial services, retailing and local government, where much voice traffic is internal, there will be immediate savings from reduced call charges paid to the telecoms providers. But much of the cost saving comes from moving this internal traffic to an IP backbone.

The investment may be easier to justify when businesses deploy advanced services over their networks. Desk-to-desk video calling is still very much a nascent market, and integrated services deployed via the session initiation protocol (SIP) have great potential but have not yet been deployed in volume.

Some vendors, such as Siemens, have SIP built into their systems. Presence-aware systems using SIP can bring a quicker return on investment than ‘vanilla’ networking projects, because they make for better use of staff time and resources by routing calls, messaging or email to available staff, or according to pre-set rules.

Munich-based software company Step Ahead deployed an SIP-based system from Siemens to improve response times for support on its ERP and CRM products. Step Ahead did not base the decision on a simple return on investment; rather, as a small ISV with large competitors, it relies on its SIPbased system to give it a competitive edge.

For enterprises, the move towards a unified network will mean investing in greater resilience, both in the LAN and in connections between the enterprise and its Internet service provider. If companies do not already dual-source their bandwidth, they might well need to do so; they will no longer have a TDM voice network to fall back on. But falling bandwidth costs, combined with the other advantages of an integrated network, make this an increasingly viable proposition.


US businesses currently using VoIP
Source: In-stat/MDR

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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