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Comment: VoIP needs more spice before the masses will bite

Comment: VoIP needs more spice before the masses will bite

Enterprise adoption of voice-over-IP services is growing, but at a slower pace than many on the supplier side anticipated. In light of the modest adoption rates, providers continue to expand their offers and sweeten the pot -- doubtless to induce an uptake in near-term trials and deployments.

In the majority of other cases, continued provider improvements are needed in terms of availability, price, scalability and performance before large-scale enterprise adoption will be likely.

As for infrastructure-related improvements in performance, scalability and availability, providers will make significant strides in the next 12 to 18 months, which ultimately will stimulate customer migration from the public switched telephone network to VoIP services.

How far off is the beginning of the accelerated adoption curve (that infamous "hockey stick")? By my count, not until late 2003 to early 2004 in the US.

In the meantime, providers continue to expand their offers and create new incentives. Service-related examples include enhancements and expansions of converged or VoIP services provided by global tie- 1 facilities-based carriers such as Equant, Cable and Wireless, AT&T and WorldCom. Other recent relevant examples include IP videoconferencing service announcements from Sprint, Equant and AT&T.

Providers also continue to offer customers financial inducements.

Equant's Converge Easy promotion, which runs through August, features the following:

-- A six-month VoIP trial for five customer-selected sites.

-- No extra charge, as Equant absorbs the cost of additional voice cards and incremental bandwidth cost of a Platinum-class port to handle multimedia traffic.

-- Normal charges for Gold class of service, access line, chassis and speed upgrades, off-net and call-centre usage charges (if applicable).

-- Platinum port billing will occur after six months, unless customer cancels.

AT&T developed a limited-time offer to encourage customer adoption of its managed Internet service with VoIP. These incentives save customers up to $US1000 on provider-related installation fees, plus at the high end, up to $7400 on requisite VoIP WAN equipment. This incentive expired April 30, but I think it's likely that another will appear by summer's end.

It's important to remember that results from small trials cannot be linearly extrapolated to the assumed baseline performance that a company will experience. However, they can be important, if somewhat rudimentary, learning tools on issues such as requisite customer/site preparation, feature performance, relevant provider expertise, and installation and maintenance procedures.

As to current incentives that encourage companies to make near-term multi-year managed services commitments, I recommend that most business customers save this type of information for the day they negotiate for VoIP services in earnest. If these types of costs are on the table today, they likely will be fair game for negotiation then.

Pierce is a research fellow at Giga Information Group. She can be reached at lpierce@gigaweb.com.


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