There’s more to this than merely price

The products of Californian software company Network General monitor the performance of corporate telecoms systems and its 650 staff communicate via VoIP. If anyone should know about the drawbacks of this technology it is Ken Boyd, CIO at Network General.

The software he deals in watches assorted black boxes and connections in order to report on the quality of every single call made via a company network.

Bearing in mind frequent criticisms of VoIP quality why did he back the service in 2004?

“We were motivated by a combination of cost and convenience. As we were moving into a new building in San Jose it seemed like a good opportunity to combine voice and data networks.” He agrees that some companies have leapt into VoIP without planning properly. Running voice over the same network as other IT functions without ensuring plenty of spare capacity can slow down important programs.

“You must understand the impact this can have on other critical services.”

VoIP is criticised because calls to emergency services emanating from the internet are not routed to the appropriate local response centre as they would be with conventional telephony. VoIP emergency calls are a realistic proposition, says Mr Boyd, but only if this additional capability is implemented at the start.

Network General had both the technical skills and the budget to specify this, but it is not the kind of optional extra that would make sense for a small business, where a few analogue lines need to be maintained for emergency use.

“You must think about what happens when communications reach beyond the company intranet or your private network” says Mr Boyd. “This becomes very significant if you are adding remote facilities.”

His entire world is focused on spotting the quality of each individual packet of digital data, and this is where the divide between SMEs and his business becomes stark. “If one call fails it is not the end of the world for an SME. For a large organisation that call might involve the chief executive and a huge business opportunity. If that happens then the man in my seat gets right-sized!”

For VoIP on a grand scale the example of Convergys, with 67,000 staff employed providing outsourced call centre facilities, is a pretty good litmus test. Converting centres in India, The Philippines and Canada to VoIP reduced spending on large conventional telecoms switches. But Convergys is not using the same VoIP service as the private consumers who have flocked to Skype.

It employs its own managed network. “We did experience some lack of reliability in some of the leased circuits and had to counter this by employing redundant circuits as back-up,” admits Convergys vice-president Dr Jim Kutsch. The Ohio-based company could afford to get it right with what Dr Kutsch proudly describes as “our VoIP.”

Back in the world of the SMEs, Skype recently surveyed 2,000 business users and discovered 75 per cent had less than 50 staff and 50 per cent employed fewer than 10 people. Damovo sprung out of traditional telecoms veteran Ericsson’s European operations and managing director Paul Renucci is wary of the rush to VoIP. “If you go into VoIP just to save money you will be disappointed. You have to manage the quality of calls as well.” Yet even Mr Renucci does not deny that this cost-cutting service is now the evolutionary thrust of telecoms for masses of individuals and SMEs.

Details: Dubai select

Mark Stott is managing director of a property company riding high on the Middle East property boom.

His company, Dubai Select, builds and sells property in the Gulf, as well as Spain and Australia. Communication is key to a business with 43 staff spread out across the globe from a head office in England. And Mr Stott is blunt about his relationship with technology. “I am a total Luddite,” he declares. But even someone with no personal enthusiasm can get excited about cost savings, and the subject of internet telephony fires up Mr Stott. “We were spending £1,400 per month on telephony for each employee, then we subscribed to internet telephony from Skype and that cost was halved.” The actual cost of telephony per employee at Dubai Select has increased in line with growth in the business, but the Skype service has allowed Mr Stott to contain costs despite this expansion. So is it all good news? What about unexpected costs? Headsets can be pricey, says Mr Stott, before adding that his colleagues bought theirs from Dubai’s famously competitive technology bazaar. Poor quality dogged early adopters of VoIP during the 1990s. Is that still a problem? “It is usable” says Mr Stott, although he admits that “calls to Spain are definitely clearer than those to Dubai, but conversations with Australia are crystal clear.”