When Richard Harris (Marcus Aurelius) leans over to heartthrob Russell Crowe (Maximus) and whispers "there was once a dream that was Rome", women swoon, men set their jaws like flint and Gladiator sweeps a bag of Oscars. But in the world of IT: "There was once a dream that was networking and that dream was voice/data convergence": a single autonomous network where voice and data travelled unheeded across Internet Protocol (IP). While network vendors sought to build that dream and service providers clamoured to rule that dream, the time has come, it appears, for the channel to be entrusted with that dream.
According to research by IDC, the Voice over IP (VoIP) market was worth around $24 million last year, with estimates to grow to $307 million by 2005. This represents an impressive compound annual growth rate of 67 per cent. Combine this with research by Frost & Sullivan, which claims VoIP services in the Australian market will grow by 215 per cent this year alone, and it's little wonder then why so many channels are eyeing VoIP as a potential gold mine.
What's driving this growth? And perhaps more importantly, where are the opportunities for gladiators brave enough to throw themselves into the ring of VoIP, risk being mauled by reliability concerns, overcome customer reluctance and trust they have the skills to handle an emerging technology?
Historically VoIP has come from an IP telephony perspective, using the public Internet to make cheap long distance phone calls. The idea was (and still is) a good one, but the problem is the inherent nature of the World Wide . . . Wait? As a result, the enterprise market has emerged as the dominant VoIP driver.
According to Geoff Whelan, network consultant manager for 3Com Australia/New Zealand, VoIP is being driven at the LAN/WAN environment using technology to replace a company's traditional PABX (private automatic branch eXchange) with an IP-based exchange, which converts voice signal into IP packets that can be switched within a network using mostly existing infrastructure.
Whelan believes the target market for VoIP is pretty much anyone, except "the larger the customer, the slower the migration". So he claims the VoIP market opportunity is really at the SME space. SMEs can realise the benefits of migrating to VoIP much quicker and can justify the investment based on a shorter return on investment (ROI).
On the other hand the residential market has yet to take off, and according to Shaun Page, general manager for the Siemens-backed Unisphere Australia/New Zealand, it isn't going to until service providers and carriers invest in the infrastructure to guarantee quality of service (QoS) at the residential edge. And it is unlikely the incumbents would make this investment because of the existing copper-based public switched telecommunications network (PSTN).
"Telcos are saying: Why do we need to do this? Why should we move this stable environment to one we're not sure is really there yet?'" says Page. "If public networks become VoIP networks, it will be because competition drives it that way."
But why should carriers move to offer a VoIP network at the residential level, when all a customer really cares about is whether they get a dial tone or not? The answer, claims Page, lies in the additional applications and services carriers could offer including multi-way chat, remote voice mail access and cost savings that aren't possible - from an interoperability standpoint - if the caller has to hop from a twisted copper pair onto a VoIP network.
Joel Martin, research director for IDC Australia/New Zealand, disagrees. He claims the hop-on/hop-off point between PSTNs and, for example, an enterprise's VoIP network, is seamless these days. With the major telcos using VoIP at the core of their networks for years, Martin believes any problems with switching between infrastructures have been ironed out.
Case study: mining the VoIP market
When it comes to succeeding in the VoIP market, one integrator that has been at the coal face - or rather, nickel face - is privately-owned Queensland integrator NewBase Computer Services.
The company recently migrated nickel mining company QNI, a subsidiary of minerals giant Billiton Plc, from its crumbling PABX-based phone system to a complete VoIP network operating over the company's WAN. The deal is being touted as the second-largest IP telephony deal in Australia at more than 750 handsets and a price tag of $1.8 million.
QNI's phone system, like most established companies, had evolved separately from its data network. Furthermore, it had evolved using disparate technologies pieced together as the company expanded its operations across northern Queensland and into south east Asia leading to a poorly documented and poorly maintained phone network.
But it was the tropical conditions that had wreaked havoc on the existing copper phone network, which in some cases had become completely corroded. A complete "rip-and-replace" was on the cards, so QNI took the opportunity to invest in fibre optic cable.
One of the biggest issues driving the migration to VoIP was the high cost and poor capacity its existing PABX provided to the company's two major sites: its corporate headquarters in Brisbane and its mining site at Yabulu, 35 kilometres from Townsville.
NewBase was chartered with the task of lowering QNI's communications costs and upgrading the mining company's voice mail functionality for its 810 staff. The integrator had a number of options. One could have been to stick with PABX technology: safe, expensive . . . boring. Another would have been to try a hybrid PABX/VoIP solution. Either way, QNI would have still been left with a PABX that as soon as it was driven off the vendor's lot, would become outdated and running up maintenance costs.
In the end, QNI bit the bullet and placed its faith in NewBase and a complete VoIP solution based on Cisco's AVVID (Architecture for the convergence of Voice, Video and Integrated Data) platform.
According to Karen Thompson, NewBase marketing and communications manager, one of the first issues to be addressed was the different shoptalk or "lingo" between telco consultants from the telephony side and the data networking people.
With different legacies (telephony vs data) in place, NewBase, from day one, brought in specialist skills across both sides of the great divide to avoid any "terminology" problems. Although it sounds simple, this is a real world problem with VoIP, explains Thompson. "You could have two people looking at the same piece of technology and have one guy calling it a [widget], and the other guy calling it something completely different."
The final result was a fully switched 10/100 LAN infrastructure, a documented server-centric network topology, ample capacity, flexible Web-based help desk support, remotely accessed voice mail and a lower cost of management. In fact, Thompson claims QNI will save $90,000 a year, effectively paying for the investment over three years.
NewBase recently achieved an IP Telephony Specialisation from Cisco, but it's the follow-on business with QNI that has NewBase MD Peter Ellwood excited. Odds are, NewBase will be able to develop "soft phone" applications -eliminating the need for handsets by using the PC as a phone - for QNI down the track, as well as possibly upgrading parent company Billiton's phone system in South Africa and England.
From his experience, Ellwood claims there are a couple of things integrators should identify when talking to the customer. "When canvassing sales opportunities in the VoIP market, there appear to be two major risks. Firstly, the customer being canvassed does not have control of their own environment; therefore they will see voice carriage a liability. And secondly, the customer will attempt to compare line for line against a traditional PABX offering - without looking for the potential intangible benefits of such a system," he says.
But having the skills in-house, as always, is the key to entering emerging markets. "From an IT integrators perspective, having the right team is essential to undertake a technology shift into an emerging technology such as VoIP," claims Ellwood.
Emotions: a moot point
Migrating customers to emerging technologies is always going to be difficult for integrators, regardless of how impressive the cost savings or business advantages appear to the customer because of the emotive perception of "risk", says John Hennessey, sales director for bandwidth QoS manufacturer Sitara Networks.
"A perception of risk with VoIP is holding back some IT managers from going with VoIP, and integrators are naturally going to be sensitive to this as an issue," he says. "It's a hangover from the nightmare stories we've all heard about VoIP, as well as a reflection of the natural hesitancy that always exists with something that's radically different."
Hennessey claims that the integrators likely to succeed in VoIP are those that, besides having the additional voice skills required, have a sound understanding of the customer's business and how to guide IT managers through the fear of poor voice reliability.
At the enterprise level, Hennessey claims there are any number of ways to approach converging voice applications across a company's data (IP) network. The skill, he believes, is identifying the possible problems of different platforms, disparate systems and network topologies before they become one.
"It's not so much that integrators don't know which way to go with VoIP when they first approach a new customer - for example, at the edge or at the back-end - but rather that VoIP can be approached from so many different levels that a lot of bridges have to be crossed before the best approach is identified," he says.
Opportunities and the "bugger factor"
The complexity of migrating an enterprise from a separate phone and data network to a single VoIP network can provide integrators with a host of stages around which to wrap services, says 3Com's Whelan. For a start, he says network infrastructure has to be able to handle the added bandwidth that voice requires, so this could include everything from installing more cable, to upgrading the WAN link and adding bandwidth provisioning.
However, VoIP is not necessarily money for jam. Whelan claims implementing a completely new system is easy; the hard part is when a company is reluctant or can't migrate to VoIP in one go. "The bugger factor, when the customer wants to ease the integration, that's one of the biggest headaches," says Whelan.
Driven by the enterprise and SME space, the once Holy Grail of networking, voice/data convergence, has finally begun to offer integrators some tangible prospects for serious revenues. Will it ever deliver on a Hollywood promise? Well, let the games begin.