CompUSA Finds Its Voice

To be sure, it wasn't a trivial goal. Running voice over a pure IP-based data network, both LANs and WANs, is still considered a bleeding-edge move. It took five years and battle-testing several IP-telephony systems for CompUSA to finally find a solution that fit the bill. After testing switches from Alcatel, Cisco and Mitel, the retailer invested approximately $18 million, which included a deal with Mitel and its integration partner Five Star Telecom, La Crosse, Wis.

CompUSA, in fact, is the latest major customer to disclose plans to displace a traditional PBX with an IP-telephony server. Late last year, the Las Vegas School District deployed an IP-enabled Alcatel phone system throughout its 400-school system, while the Sheraton New York Hotel and Towers inked a deal to deploy Nortel's Succession 1000 IP PBX and recently introduced Succession Release 3.0 converged IP network.

Also interesting: The number of telephone systems installed last year that are IP-capable surpassed the number that connect to dedicated traditional telecom networks, says Jeffrey Snyder, an analyst at Gartner. "That's the number of systems that are IP 'capable,'" he emphasizes. "That doesn't speak to the number of lines that are going out." Which is what makes the CompUSA VoIP implementation particularly noteworthy. "It is organizations like CompUSA that are helping demonstrate that pure IP telephony is really ready for prime time," Snyder says. What is also significant is the role Five Star played in helping Mitel win the business. Snyder says the offerings from all the contenders were strong, but Five Star's ability to demonstrate that the Mitel 3300 Integrated Communications Platform (ICP) would work reliably played a key factor in the selection.

"Certainly there's a gigantic weight put on the value of the solution, but there's at least an equal weight on the competence and the skill set of whomever's actually doing the job," Snyder says. "If the channel partner had not been competent, Mitel never would have won the bid."

A Risk Worth Taking
To wit, Five Star invested heavily in trying to win this deal. The solution provider, which several years ago refocused its business on IP telephony with the strong conviction that it would one day pay off, funded the pilot in terms of providing all of the equipment, labor and support.

"Honestly, it was all on our dime," says Chad Midtlien, a vice president at Five Star. "The understanding was if you like it, great, if not, we'd take it out. It was a risk worth taking."

Indeed, it was a risk. When CompUSA conducted its first pilot five years ago, it tested the Cisco 3810 switch. After two years of testing, CompUSA gave up on the pilot and, needing a new PBX, installed a traditional Nortel switch.

Nevertheless, Ken Monroe, the retailer's IT director, did not lose interest in IP telephony. And as line shipments of IP-based phone systems accelerated last year, Monroe decided it was worth looking at again. But the second round of testing was not a slam dunk either. Initially, Monroe's team was able to crack through the security of a Mitel switch, so it was sent back. An Alcatel pilot lasted all of three weeks.

"It was hard to set up and wasn't user-friendly," Monroe recalls. And with Cisco's Call Manager, Monroe asked for a feature that supports multiple call ringing--a key requirement. "Cisco said it would do it, but eight months later [last May], Cisco came back to me and said, 'We're going to develop that feature.' I said to Cisco, 'Guess what? You're too late.'"

By that point, Mitel and Five Star had sealed the deal. It certainly didn't hurt that Five Star and CompUSA had a 10-year relationship. During the pilot that preceded the deal, the systems were tested at CompUSA's headquarters and in two Texas stores. To ensure voice would run smoothly over the data backbone, CompUSA dropped its AT&T frame relay network in favor of a VPN provided by XO Communications linked to its Sprint frame relay backbone. The pilot went off without a major hitch, Monroe says.

"When we took the Mitel out and plugged it into the new network, it was basically plug and play," Monroe says.

Cisco wasn't left totally out in the cold. To support the data requirements of carrying voice traffic, CompUSA had to install a new network backbone. To build the VPN capable of supporting T-1 speeds, CompUSA installed Cisco 2651 routers and 3550 switches in all the stores and converted the AT&T frame network to the XO backbone, which carries both voice and data traffic.

In conjunction with the backbone upgrade, CompUSA decided to put wireless infrastructure in the stores to support vendor product demos and, ultimately, wireless handsets. Five Star, which also designed and deployed the data network, installed the AP1200 series wireless infrastructure.

As of the end of last year, Five Star completed the installation of 29 existing stores and two new ones. The remaining 168 stores and four new ones should be completed this year. In addition to saving thousands of dollars by running new CAT 3 wiring in the stores, Monroe estimates the new IP-telephony system will save the stores $14 million over five years in telecommunications costs, while providing more flexibility--such as allowing a call to be transferred from one store to another without the caller even knowing.

That Five Star was key in helping Mitel win CompUSA's business is no fluke, says Paul Butcher, Mitel's CEO. Butcher believes solution providers will be key to the growth of IP telephony in the coming year. "This is one of the fastest-growing segments of the IT sector," Butcher says. "If I were a channel to market, I would not ignore this space."

Gartner's Snyder agrees. "Organizations that don't do this are not going to be around," he says. "Whether they like it or not, IP telephony is inevitable."