Proceed cautiously to the next frontier

Voice over Internet Protocol (VoIP) was predicted to be the "next big thing" for 2005.

On the surface, the concept is extremely attractive � channeling data, voice and other information over one network. For some home users, it has already become a reality, with cable and DSL providers pushing the technology to compete in traditional telephone markets. But does it make sense for your business?

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According to a study by Infonetics Research (www.info.infonetics.com) released in May, 29 percent of large, 16 percent of medium and 4 percent of small businesses in North America will have adopted VoIP by the end of this year.

Still, the numbers may not tell the whole story. As with any emerging technology, digging through the haystack of marketing hype to find a needle of reality can be challenging.

And with more than 1,100 VoIP providers worldwide, there's plenty of marketing. Promised benefits include cost savings, flexibility and ease of deployment, but the real picture is somewhat more complex.

The biggest cost of deploying VoIP technology is hardware. If your company is already planning to upgrade or replace its telephone system, VoIP is worth considering. It provides some measure of "future-proofing" your voice communications system, and the convenience of integrating voice, data and video can change the way you do business.

As always, remember to figure the total cost of ownership when you're crunching numbers.

The second consideration is the quality of your network. Based on marketing claims, it may seem as if voice is just another kind of network data, but this assumption doesn't hold up in reality. While traditional phone calls can be routed across a jumbled maze of wiring stuffed into a closet, even a well-planned Ethernet network may have problems handling voice.

The biggest decision your company will face regarding VoIP is whether to build a solution from the ground up or to opt for a hosted service (in much the same way that Web-hosting companies provide an alternative to managing your own server farm and data center).

A significant consideration is getting all the pieces of hardware to work together; with the number of vendors currently, it's rare to find a single provider that makes handsets, switches, routers, gateways and servers � and the software that ties them together.

Small- or medium-sized businesses, in particular, may find that a hosted solution is most cost-effective. And several vendors, such as Broadsoft (www. broadsoft.com) and Avaya (www.avaya.com), along with traditional telecoms, have realized that companies need a simpler, less expensive approach to VoIP. This has prompted the development of call-management applications that are user-friendly and integrate with software already in use on the desktop.

The best approach to VoIP may be to start with a hosted solution and then bring more functions in-house as your company grows or your needs expand beyond basic voice applications. While there are risks involved in being early adopters of any technology, a carefully planned approach will ensure that you enjoy the benefits of VoIP, and that your company will be prepared for further advances.