The convergence of voice and data

The convergence of voice and data

If ever you need proof that Voice over IP (VoIP) has finally arrived, pop down to your local Tesco where you'll find a VoIP-enabled handset and calling plan package retailing for less than £20.

The move by the UK's largest supermarket group illustrates two things. First, VoIP has developed to such a degree that relatively non-technical consumers can be offered it at the same time as they buy their weekly groceries; and second, the underlying technology is now robust enough to support such a widespread rollout.

Calls from the Tesco internet phones are priced at 2p a minute to anywhere in the UK, the US, Canada or Australia. It is a clear and aggressive attack on the more traditional fixed line, circuit-switched services.

At the time of the launch Andy Dewhurst, chief executive of Tesco Telecoms, said: "The way we communicate is rapidly changing and we believe that this is just the beginning of the internet phone revolution. Our research showed that, while many people are aware of internet phone services, most have been put off by complicated technology and confusing tariffs and installation."

Indeed, buying a VoIP handset from Tesco is a world away from the VoIP solutions of the past. Technology such as Skype, for all its ingenuity and success, was never likely to achieve world dominance because it was something of a techy's toy.

The explosion of Skype was largely by word of mouth. Those in the know could benefit from extremely cheap, if not free, calls through their internet-connected computers.

Invented by a Swedish internet entrepreneur and his Danish partner, Skype boasted millions of users around the world before it was sold to eBay late last year in a deal that could ultimately be worth $4.2bn by 2008.

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However, for VoIP to reach its full potential, the more traditional telcos had to get on the bandwagon, something which the likes of BT and Cable & Wireless have done with a vengeance. Most now offer competitive IP-based telephony packages.

It is important not to lose sight of the fact that IP convergence has been around in some shape or form for at least 10 years. The first phase saw the technology being used to carry voice calls over enterprise networks, but it is only now that the technology has got to the point where full convergence can be achieved. This is where the cost savings, efficiencies and improved functionality and reliability can all be realised.

There are many reasons why convergence is really beginning to take off now, but Ivor Kendall, general manager for IP infrastructure at BT Major Business, explains perhaps the most important. "The cost of bandwidth has fallen dramatically, which means that VoIP is beginning to deliver," he said. "The cost models have changed."

IDC estimates that almost three-quarters of organisations now expect to fully converge their voice and data networks by 2008. In fact 25 per cent of organisations will have video fully converged with their voice and data networks by 2008, according to the analyst firm.

Perhaps the most oft-cited reason why companies should think about turning to VoIP relates to the associated cost savings. Because calls are routed over IP networks (such as the internet and enterprise IP networks) calls are freed from traditional telco pricing plans. "It's about money, it almost always is," said Kendall.

But reduced cost is by no means the only example of how VoIP can benefit businesses today. Because the whole idea behind the technology is to route voice calls over the same network as data, the flexibility, productivity and functionality are all hugely enhanced.

For example, a VoIP system running over an IP network is able to interact with a company's existing customer relationship management system. As soon as a known customer calls, his or her details can be pulled up on screen leading to improved efficiency, faster response times and better customer service.

"As voice becomes an application there's more you can do with it," said Richard Mahoney, senior analyst enterprise practice at Ovum.

"You can start offering messaging, presence information, voicemail all through one interface. The way we use email today, with unified communications it will also include video conferencing, collaboration tools and mobility. In a nutshell, IP networks will fundamentally change how we communicate with each other."

US-based consultancy group Sage Research carried out a project to investigate the benefits that IP convergence can have on small to medium sized businesses.

It outlined three key areas: organisational efficiency in terms of cost savings and revenue generation; end-user productivity driven by a more mobile workforce and enhanced communications literacy; and IT staff productivity where the simplified infrastructure has led to much quicker response times.

So, if ever there was a time to adopt an IP network or converged infrastructure, it's now. But, according to research carried out by internet telephony company Inclarity earlier this year, small businesses are not up to speed on the benefits the technology can offer.

Over three quarters of the 500 respondents to the survey said they had 'limited understanding' or 'no understanding' of VoIP. Of course this doesn't bode well, and not only for those trying to sell VoIP kit. Small businesses are failing to take advantage of the cost savings, efficiency improvements and better functionality.

Perhaps many still think that security, reliability and quality issues are still an issue. But, if the likes of FTSE-100 giants such as British Airways and LloydsTSB, both of which are implementing large-scale convergence programmes, see value in the technology, surely small businesses should as well.