VoIP: Busy Signals Abound

IP telephony

While cost savings and productivity improvements that stem from tying in remote workers continue to drive revenue in this hot category, other technologies linked to converged networking, such as video-over-IP and voice-over-wireless-LAN (VoWLAN), are also spurring adoption.

"We're looking at a three-fold increase in growth just on our VoIP business [this] year," said Doug Bowlds, vice president at AAC Associates, a Cisco Systems partner in Vienna, Va., whose IP communications division represents about one-quarter of its $15 million in sales.

Growing interest in applications that add video to converged networks is also driving sales of IP telephony to customers that previously would not consider it, he said.

"Video is helping us extend it to other areas. For example, police [departments] typically have stayed away from VoIP, but once we start showing what they can do [when we add] IP video surveillance, they start getting really interested," Bowlds said.

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AAC's biggest challenge this year will be finding enough VoIP engineers to fill openings in its growing staff. Bowlds currently has 15 VoIP-specialized engineers and is looking to add 10 more in 2005.

While some solution providers see 2005 as a year to bulk up their IP telephony practices, others plan to jump into the market for the first time. "We probably will be investing this year to get involved [in VoIP], adding people, getting people cross-trained," said Steve Thorpe, president of Adaptive Communications, a solution provider in Portsmouth, N.H.

Thorpe estimates Adaptive, which focuses on security, will have to spend $250,000 to ramp up an IP telephony practice for sales he expects to see in the next two to three years.

In addition to security, another technology that complements IP telephony sales is wireless, said John Freres, president of Meridian IT Solutions, a Cisco partner in Schaumburg, Ill. The company expects its VoIP sales opportunities to double in 2005.

"The whole concept of mobility is absolutely becoming pervasive in accounts," Freres said. "Customers are starting to leverage their networks to get greater productivity."

Indeed, research shows VoWLAN deployments are on the rise. The VoWLAN phone market for the first three quarters of 2004 climbed to $37.9 million, up from $19.9 million in the first three quarters of 2003, according to Synergy Research Group.

"It's going to be as mainstream in our accounts as wireless has been," Freres said. "Once you get a few people using it, it becomes a huge productivity tool."

While many customers are keen on VoIP's promised productivity gains, for others the most compelling argument is still old-fashioned cost-savings, said Scott Klemm, vice president of operations at Distributed Computing Inc. (DCI), an Avaya partner in Baltimore.

One DCI education client in Pennsylvania, for example, shaved $12,000 per month off its telecommunications bill by moving its 30 office employees and 100 field employees to a VoIP system, Klemm said.

Even customers that are not candidates to deploy IP telephony are buying VoIP-capable phone systems for the future, Klemm said.

"Only about 20 percent of customers say they don't need it at all. It probably was the exact opposite a year ago," he said.