'Breakthrough' VoIP project breaks down

'Breakthrough' VoIP project breaks down

The Dow Chemical Co. unveiled plans to create a voice-over-IP network that would also provide data and video capabilities. In a chest-thumping announcement, Dow said its converged network would be a "breakthrough solution" that would be "setting the standard for other Fortune 100 companies."

What a difference three years can make. Lead contractor Electronic Data Systems is now off the project, replaced last week by IBM, which is being tasked with building what Dow expected to be substantially completed by now: a VoIP network serving its 46,000 employees in 63 countries.

"It was really the pioneer days in 2001," said Jim Slaby, an analyst at The Yankee Group. Dow "is one of these unfortunate casualties of living out on the edge."

IBM officials said they don't know how much of the prior work will be useful. The company, in its discussions with Dow, focused on setting requirements and not on prior work. "We're not obligated by any previous architecture and design," said Todd Kirtley, general manager of the industrial sector at IBM Global Services.

All Kirtley would say about the prior work was that Dow "did not get the traction they were hoping to get."

IBM's seven-year outsourcing agreement, which it declined to value, covers operation of Dow's global IT infrastructure. That includes supporting servers, desktops and e-mail; providing storage and network bandwidth under a utility pricing model; and building the converged network.

The odds may have been against Dow from the start. Analysts say it was just too far ahead of its time. In 2001, "people didn't understand all the issues" involved in deploying a converged network, said Bob Hafner, an analyst at Gartner. And some core technologies were unavailable. For instance, "we didn't have the tools to do network certification," Hafner said.

A third-party consultant who worked on the DowNET VoIP project, who spoke on condition of anonymity, said the project ran into delays because replacing legacy systems proved to be very difficult, and there were unanticipated problems. For instance, security systems that used analog technology didn't necessarily work on a VoIP network. "There was definitely a lot of poor planning," the consultant said.

EDS, Dow and Cisco Systems -- the main technology provider under the original contract -- all declined requests for interviews to discuss the project.

How much was lost by any of those companies is difficult to determine. On July 28 EDS said it had reached an agreement to terminate a commercial contract that it didn't identify and reported a US$135 million pretax termination-related charge.

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