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Report: Australian companies investing in VoIP

Report: Australian companies investing in VoIP

Australian organisations are increasingly investing in IP services and infrastructure, an IDC study has found; though the price point for deployment still remains high.

The IDC report, which surveyed over 300 Australian organisations, found that one in seven medium and large companies have already deployed IP telephony and another 47 per cent will be implementing it in the next three years.

IDC research director Landry Fevre said that VoIP was widely regarded as a mature product now and the largest prohibitive barriers are the cost of deployment and a concern about network availability and performance.

"At the moment most companies can only afford to implement Voice over IP in situations such as mergers, acquisitions, relocations and major re-furbishments."

Just looking at purchasing new handsets alone, Fevre said that companies are looking at a substantial cost. However, he predicts there will be a steep price decline in the next year.

"As competition increases, IP handset subsidies will become almost de rigueur," he said.

Fevre said the enterprise IP telephony equipment and VoIP services market is worth $223 million combined for 2004. He predicts that this market will become increasingly competitive in the next few years.

"Overlap and friction between carriers, equipment vendors and system integrators is likely to occur around VoIP as competition intensifies with more players and products entering the market this year," Fevre said.

Gavin Williams, acting marketing director for Optus, speaks of a 'cooperative' rather than strictly 'competitive' approach to this converged market.

"I think it's true that VoIP will require an integrated approach. Optus is flexible and customer focussed in its approach to IP solutions. We're about open systems in the end."

According to Williams, customers are be able to choose their VoIP services to be totally managed by Optus, or they can select an operational model that will require Optus to work closely with network integrators and vendors

Telecommunications analyst and researcher Paul Budde agrees with Fevre that there would be friction between vendors and telco's.

"Telcos want to slow the introduction down and integrators and vendors want to speed it up. It will be interesting to see who wins," he said.

However Optus, for its part, is showing a willingness to enter the market. Since June this year it has been offering free Cisco handsets with new IP Telephony accounts

Fevre, Budde and Williams all agree that the primary driver for IT spending on IP telephony at the moment is cost reductions.

An Optus survey of 300 of its business customers found 81 per cent cited lower overall communication cost as a driver for VoIP. Reduced network management costs was also a significant attraction for 43 per cent of respondents while only 38 per cent respectively cited unified messaging and integrated messaging as drivers.

Budde believes that while ever cost alone is the driver, businesses will be slower to take up VoIP, because they are just as likely to approach their telco and bargain for a better deal with their existing network and infrastructure.

"There has to be a strategic business case for VoIP as well as a cost saving in order for it to be deployed on large scales," he said.

Besides the up front cost, the IDC survey revealed that the main reason for companies not deploying VoIP is the lack of understanding of the benefits IP telephony would provide.

Overall, Budde believes that VoIP is a mature market in the Australian enterprise space and will continue to grow, albeit slowly.

"VoIP is an evolution rather than a revolution. It is a slow process," he said.

Graham Ritchie, IT manager of Rimtech Software Australia could possibly be part of this evolution though not yet.

"We are too small to warrant an investment in VoIP at this stage," he said.

"There are only eight of us, so we would have no use for it internally. We have, however discussed it because I like to work from home. But at this stage it is just as easy to use a telephone and PC."

Glen Hickey, CIO of Zurich Financial Services Australia says that although his company is not currently using VoIP, he wants to keep the options open.

"There is currently not a strategic business benefit for us to deploy VoIP. However we are making sure that our current purchasing will enable us to deploy VoIP in the future."

BHP Billiton, Corporate Express Australia, Lend Lease Asia Pacific, Southcorp Wines and the Anglican Church Diocese of Syndey are among Australian organisations and companies currently deploying VoIP.


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