Yes, but it’s only the subplot!

Is VoIP the Future of Telecommunications?

Conclusions

• Voice over IP (VoIP) is the strategic direction for both the wide area network (WAN) and premise PBX equipment.

• VoIP is rapidly becoming a viable technology for some implementations.

• The biggest reason for using VoIP in the WAN today is cost savings.

• Full and complete telephony application functionality will not arrive until 2003.

Technology Conclusions

• New technologies are becoming available that leverage the universal deployment of TCP-IP within the LAN, WAN, and Metropolitan Area Network (MAN)

• Passive Optical Networking (PON) dramatically lowers the cost of deploying broadband municipal fiber networks.

• Free Space Optics (FSO) will dramatically lower the cost of deploying broadband municipal wireless networks.

• The TCP-IP protocol represents the strategic direction for both the Local Area Network (LAN) and the Wide-Area Network (WAN)

• Voice over IP (VoIP) represents the strategic direction for both the wide-area network (WAN) and premise PBX equipment.

• VoIP is rapidly becoming a viable technology for some implementations.

• The biggest reason for using VoIP in the WAN today is cost savings.

• Full and complete telephony application functionality will not arrive until 2003.

What Is VoIP?

VoIP = Voice over the Internet Protocol

It is not:Voice over the Internet•Instead of using traditional circuit switch systems for voice communications, VoIP uses a packet protocol originally designed for data communications.•VoIP can be used within the LAN, WAN, MAN, and/or the PBX

Enterprise VoIP Economics

PBX

PBX

Intranet

IP Gateway

LocalPSTN

LocalPSTN

VoIP RequirementsRouter upgrades • shorter packet • VoIP processingRouter cardsGatewaysPBX upgradesPBX table changesIncrease bandwidthStaffing requirements

The IP Telephony Solution

Router

IP BusinessPhone

Switch

WAN

PSTN

•Call Control•Gateway•Applications

PC Phone Client

Fax

Video

H.323ConneXtions

Analog 2500 Phone Palm Pilot

Contact Center

InternetUnified

Messaging

Collaboration

Applications — A Field of Dreams

Remote Workers

johan@abc.seDear Johan,It’s over.

Vendor Push Drives PBX Transformation

PBX

Telephony Server

VoIP Hype Cycle

VoIP

TechnologyTrigger

Slope ofEnlightenment

Trough of Disillusionment

Plateau ofProductivity

Peak of InflatedExpectations

Hype

Maturity

Type A Adoption

Type B Adoption

Type C Adoption

Voice QoS Requirements:• Latency/delay• Packet loss• Jitter

Voice Quality Is More Than Low Delay

Is Reliability Really a Problem?

WAN

Is Microsoft NT as stable as a

proprietary operating system?

Why shouldn’t the data network be resilient

enough for voice needs?

Will management riskreduced service levels

for telephony?

VoIP Perceptions: No Hardware

Server-based hardware is not necessarily cheaper than proprietary hardware

IP phones cost as much or more than the existing feature

set

Adding IP devices is not any easier than upgrading

legacy hardware

Extending the Voice Network

• Retain resilience in head-office network• Extend core functionality to all locations• Experiment with unified desktop functionality• Benefit from an upgraded network infrastructure

IP-BasedNetwork

Small Office/BranchOffice Locations

Home Workers

QSig

government PrivateVoice Network

CentralizedOperator

Voice Mail

Improving Staff Mobility

• Maintain single user profile across the enterprise

• Unify user messaging through one application interface

• Work smarter, not harder

IP-BasedNetwork

Voice ApplicationServers

WWW

In the Office

Working at Home

On the Road

Centralize Management Control

• No disparate branch-office platforms• Central control of telephone calls/routing• Single interface for moves and changes• Seamless functionality across the network

IP-BasedNetwork

Branch Offices

PSTN

ManagementInterface

IP PBX Timing

0

12.5

25

50

75

100

1999

Year

Percentage

Less than 3,000 systems in 2004

2000 2001 2002 2003 2004 2005 2006

Approximately 308,000

systems in 2004

IP/PBX for lessthan 100 desktops

IP/PBX for more than 100 desktops

Converged V/D Telephony Equipment Providers — North

American MQ

Completeness of VisionVisionariesNiche Players

Challengers Leaders

Siemens

Nortel Networks

Mitel

Cisco SystemsAvayaAbility to

Execute

3ComShoreline

NECAlcatel

As of 1/31/01

More than 100 lines

Completeness of VisionVisionariesNiche Players

Challengers Leaders

Vertical Networks Nortel Networks

Mitel

Cisco Systems

3Com

Avaya

Ability toExecute Siemens

Expanets

Shoreline

NECArtisoft

AltiGenCommunications

As of 1/31/01

Less than 100 lines

Recommendations

Where to Deploy VoIP Where Not to Deploy VoIP

All new data WAN upgrades

Remote dial-in users

Hoteling workers in multiple locations

As part of unified messaging

At new SOHO sites

When less than 100 stations

When justifying based only on TCO

With existing multiple PBX vendors

When an application doesn’t require it!

Implement now

Implement as trial first

Don’t implement for the next 18 to 24 months

Packet access networks dramatically lowers costs

Add Drop ATM and/or SONET Multiplexers provide QoS via expensive “nailed down” bandwidth between locations

ATM and SONET interfaces are also very expensive

Ethernet switches provide QoS via inexpensive TCP-IP protocols

Ethernet interfaces are also very inexpensive

Cost Comparison between OC-192 and Gigabit Ethernet

The costs for Ethernet are often 1/10 of the cost for equivalent ATM or SONET bandwidth

Passive Optical Network Access System

FSAN Model for PON

The Full Service Access Network standards initiative defines a set of passive-optical-network architecture standards using ATM as the transport technology.

Free Space Optics

Advantages

•Quick time of deployment

•Cost-efficient network investment

•No license acquisitions

•Investment protection for leased buildings

•Excellent for temporary installations

What is the future of Telecommunications?

Anything over IP and IP over anything!

VoiceIntranetVideoExtranetE-gov

IP

LANMANWANWirelessOpticsCopper

Real-timeStore and forward

Organizations that achieve end-to-end convergence will achieve the lowest TCO.