Section 11.1: VOIP Befefits

One of the key drivers of combining voice and data networks is monetary savings. If you look strictly at minute-to-minute costs, the savings realized by going with VoIP might not be large enough to justify the expense of rolling out this service.

Price savings can vary based on your geographic location. In countries other than North America, for instance, a minute-to-minute cost comparison between VoIP and the traditional PSTN more than justifies the expense of the new network.

In North America, however, many large corporations pay 2 cents or less per minute for long-distance calls they make within the United States. For such corporations, it is hard to justify to accounting that rolling out a new infrastructure will provide a Return on Investment (ROI) that will pay off quickly—that is, unless they factor in items other than per-minute charges.

For enterprise networks, for instance, consolidating voice and data networks might mean the ET customer can order fewer circuits from the PSTN. Also, an IP infrastructure (utilizing Cisco IP phones) requires fewer adds, moves, and changes than a traditional voice or data network. This is because, with one infrastructure, you can use such data features as Dynamic Host Configuration Protocol (DHCP). DHCP enables a device (a PC or an IP phone) to dynamically receive an IP address (that is, the IP address does not need to be statically configured into the device). So, for instance, if you have an IP phone configured with DHCP, you can move the phone wherever you need and still keep the same phone number. This is similar to moving your laptop from office to office and still being able to log in to the same network server.

Many large enterprises have determined that it costs several hundred dollars just to move a telephone today (this is due to such factors as labor costs and the cost of reconfiguring the switch). Such costs are not incurred in an IP infrastructure, however, because your IP phone profile is set up, and the IP network doesn't care where you are located.

NOTE: The Cisco Communication Network is part of Cisco's Enterprise VoIP network. It consists of an IP phone and a Cisco Call Manager. In the Cisco Call Manager, profiles are set up for each individual phone based upon the static Media Access Control (MAC) address of the IP phone. The IP phone simply has to send out a DHCP request when it's plugged into an IP network. The DHCP response includes the IP address that the IP phone is to use, as well as potential Cisco Call Managers to log in to. The IP phone then contacts the Cisco Call Manager and downloads its profile (phone number, features, and so on).

An additional benefit of VoIP is the ability to have one Information Services (IS) department that supports both voice and data networks (as the networks are now one entity). This can initially cause tension between these two infrastructures, but as with any technological revolution, one must enhance one's skills to survive. This has been the case with the introduction of most new technologies—from the cotton gin to robots.

One benefit of VoIP that enterprises and service providers often overlook is the fact that common infrastructure tools are now no longer needed. These include such tools as physical ports for services such as voice mail. In a circuit-switched voice network, voice mail is sold based on the number of mailboxes and the number of physical ports needed to support simultaneous users. With VoIP, physical circuit-switched ports are not necessary. The voice mail server need only have an IP connection.

Also, VoIP enables voice mail systems to be put on standards-based platforms (such as PCs and UNIX machines). After a feature is on a standards-based platform, price gouging is much less likely to occur. Voice mail providers today, for example, charge 50 cents to $1.50 per megabyte for hard-drive space because they use a proprietary mechanism to format and store their voice calls. On the other hand, the average price for hard drives at the local PC store is approximately only 3 to 4 cents per megabyte.

What if your voice mail server was the same as your e-mail server and you could decide whether to download your voice mail over a telephone or use your e-mail client to peruse your voice mail? Those who travel will truly appreciate benefits such as the capability to download voice mail and respond electronically, and to forward voice mail to a group. Such technology exists today and will soon be available and widely used through enterprise and service provider networks.