From Ezilon.com
VoIP: Adoption by Consumers and Businesses
By Ezilon.com Articles
Jan 24, 2006, 21:32
VoIP: Adoption by Consumers and Businesses
Today, all major phone service providers are incorporating voice-over-Internet-protocol technology into their networks.
BT, the dominant carrier in the United Kingdom, plans to convert its entire infrastructure to VoIP by 2009. Soon, even when calls originate and terminate with traditional telephone technology, they will be carried over the phone companies' VoIP networks. In 20 years, and probably much sooner, the global telephone system will run largely on Internet technology. There will be no distinction between VoIP and the phone network.
VoIP's simplicity and low cost are driving its rapid adoption by both consumers and businesses. The leading U.S. retail VoIP provider, Vonage, has about 600,000 customers and is adding about 15,000 each week. A host of start-ups are marketing competing services, as are incumbent phone and cable TV companies such as AT&T, Verizon, Time Warner Cable, and Comcast. And the U.S. is hardly a leader in this field. In Japan, where broadband service is cheap and much more widespread than in the U.S., over 4 million customers-representing more than 10% of all homes-subscribe to VoIP offerings. Over 35 million people worldwide have the free Skype VoIP software on their PCs.
Consumer VoIP may get most of the attention, but there has been a steady drumbeat of enterprise VoIP adoption. Bank of America recently committed to deploying 180,000 Cisco VoIP phones across its 5,800 branches and offices. Boeing signed a contract to provide VoIP to its 150,000 employees, and Ford signed a $ 100 million deal with telecommunications carrier SBC to deploy 50,000 VoIP phones. Smaller firms are embracing VoIP as well. Cisco, one of the largest VoIP vendors, has sold more than 4 million IP phones to businesses.
Most of these initial VoIP deployments are simple ROI-driven technology investments, akin to buying sales-force automation systems or human resources software. VoIP cuts costs by replacing separate voice and data networks (both users' and providers') with one common infrastructure, eliminating duplication. Thus, instead of paying phone companies to carry their voice traffic, companies can send much of it over the spare capacity on their own data networks. Moreover, VoIP allows providers to replace centralized, proprietary "switches"-essentially, mainframe computers-with standards-based devices that drop in price as rapidly as PCs do.
The service-driven technology is not readily available yet in all places and the carriers are being careful in its deployment because by offering this service, they begin cannibalizing the long distance market. In this application, the customer never really owns the phone system (switch) because without the service from that provider, the in-house equipment is no good. Therefore, it's a smart move on the part of the service providers to lock in those customers to their offering. It's sort of like having a PC that can only get AOL service so that if you leave AOL, your PC is no longer any good. It's similar to the way a traditional analog phone relies on a switch to do features and route calls. It normally requires a total new data network. The service-driven offering is similar in the fact that the switch is somewhere out in the Internet cloud.
In large enterprises, communications is a big enough line item that savings can add up. SunTrust Banks, for example, found that their VoIP deployment saved over $ 5 million annually. Although significant, such cost savings are not game changing-even Cisco claims only a 15% cost reduction from VoIP. For most companies, therefore, the initial impact of adopting VoIP will be modest. It will center on efficiency gains from replacing or consolidating legacy systems and avoiding usage-based charges from phone companies.
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