Cisco: IP Telephony Catching Up To Hype

The reality of IP telephony is catching up with the hype, said a Cisco Systems executive Tuesday during a keynote address at the Spring VON 2003 voice conference in San Jose, Calif.

While other segments of the telecommunications industry, particularly the service provider market, have declined during the current economic downturn, the IP telephony market continues to grow, said Mark Bakies, director of the voice technologies group at Cisco.

Citing a recent report from market-research firm InfoTech, Bakies said 67 percent of large enterprises in the United States have IP telephony up and running today in small implementations and pilot programs.

However, enterprises have not moved to full-scale deployment of voice- over-IP as quickly as expected, with only 20 percent implementing IP telephony between five or more sites, he said.

One Cisco customer, adhesive manufacturer H.B. Fuller, will realize an estimated savings of $2 million over five years by implementing IP telephony, he said.

For enterprise customers, where savings on toll calls is still the primary driver of IP telephony deployments, both IT departments and end users can see benefits from implementing voice-over-IP, Bakies said.

IT departments can provide faster, cheaper moves, adds and changes with IP-PBXes than with legacy PBXes, which require costly visits from specialized technicians. IP-based systems also can take less time to implement, Bakies said.

For end users, the benefits of IP telephony include improved productivity, he said.

"It's not necessarily my productivity that is improved but the productivity of those who regularly have to track me down," Bakies said. "There's less phone tag that goes on," he said.

The success of IP telephony in the enterprise market is creating opportunities for service providers as well, Bakies said.

"All eight major carriers are distributing IP telephony technology through the channel today," he said.

Cisco sees a future where the LAN, WAN and service providers' networks will all seamlessly connect with each other, he said.

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