Telcos wary of network-based VPNs and VOIP

Telcos wary of network-based VPNs and VOIP

Corporate telecom executives are still leery of network-based VPNs and VOIP, according to a report released by investment firm Sanford C. Bernstein & Co.

Corporate telecom executives are still leery of network-based VPNs and VOIP, according to a report released by investment firm Sanford C. Bernstein & Co. Holding them back are concerns about reliability, security and the ability of the technologies to pay for themselves over time, the study says.

The annual look at corporate attitudes about telecom technologies consisted of interviews with 27 Fortune 500 telecom executives who decide what services to buy, according to one of the study's authors, Jeffrey Halpern, a vice president and senior analyst for Sanford C. Bernstein & Co.

The firm believes corporate executives who make telecom decisions are generally cautious, but still believe that ultimately IP VPNs and IP voice services will dominate. However, at this point these executives still have reservations, which may be based on perception rather than fact. One example: many respondents said they felt IP services were only a best-effort when in fact QoS guarantees are available from cariers.

"Even when the corporate IT department was completely convinced of VOIP's technology readiness, they faced the additional [challenge] of 'socializing' the technology to the rest of the company," the study says.

Interest in VOIP is extremely high, with 89 percent of those responding said they were either deploying or testing VOIP. None said they were relying solely on VOIP yet, the report says.

Cost savings, particularly administrative costs, and added call features are the big draw for VOIP. "In addition, there is an expected intangible benefit from the eventual convergence of all voice and data networks onto a common IP platform, further facilitating overall network management," according to the report.

IP VPN services are more widely used among the big corporations interviewed, with fully meshed connenctoins being a major attraction. "The flexibility of any-to-any connectivity enables more effective communications between multiple sites, allowing enterprisese to implement real-time processes that coordinate the activities across different parts of the company," the study says.

Price is still a major factor in deciding what services to buy. For example, if an IP service costs 15 percent less than a traditional service, but the price of traditional services are expected to drop 5 percent per year, then the buyer might stick with the old service, the study says. "In the case of VOIP, this effect is exacerbated by the fact that traditional PBXs are also becoming increasingly automated, raising the hurdle for savings in administrative costs from going to VOIP," according to the report. -- Network World (US online)

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