Sheila Christiansen picks up her phone like anyone else, but when the sound of her voice enters her mouthpiece, it's broken into packets of 0's and 1's, then zooms out of her office over a T1 line, and eventually hits the Internet and heads for the call recipient. Christiansen, the assistant vice president of the Sleepy Eye, Minn.-based Americana Community Bank, is part of the new wave of Voice over IP (VoIP) users.
A few years ago, VoIP was considered the next big thing on the Web. In 1997, AT&T experts predicted that by the year 2000, 10 percent of all telephone calls would go over the Internet. But the service turned out to be clunky and complicated, and the sound quality left much to be desired. It also turned out there was some life left in the old telephony world. And thanks to fiber-optic cables and bare-knuckle competition, most telephone users saw their phone bills plunge and their service improve. So VoIP calls found a niche on the still-pricey international call market, but not in many other places.
This year, however, VoIP is calling again. New technologies and new applications are making VoIP a realistic option for companies that want to upgrade their phone systems. The technology offers prices that are competitive with or well below that of traditional private branch exchange (PBX) solutions or key systems (electronic boxes that can give smaller offices PBX-like features). Call quality is fast approaching that of analog networks, as well, and digital calling offers businesses new technological benefits.
The system used by Christiansen and her 50 coworkers is typical of those finding favor with small- to mid-sized businesses. Its core is a technology developed by Nortel called Business Communications Manager, or BCM for short. It routes calls through a Windows NT server rather than a traditional PBX. Americana connects to the outside world via a high-speed T1 line, but analog phone lines still provide backup, as VoIP connections don't yet offer the 'five 9's' (99.999 percent reliability) touted by traditional carriers.
The VoIP system at Americana still has a few early VoIP artifacts, such as some distortion on the calls. 'The quality is nearly the same [as with a traditional landline],' Christiansen says. And the features are numerous. Because all calls are digitized, they're easily shipped from one site to another. For example, Americana's VoIP solution can convert already-digitized voice messages to WAV files and send them to the employees' e-mail addresses. 'It's easy for us to add on features at any time with no disruptions,' Christiansen says.
The system can also be customized to accommodate particular needs. Conference rooms, for example, can get more bandwidth than other phones so conference calls that mix voice and data go smoothly. And though Americana brought someone in to help with the installation, the NT-based system is easy to administer. 'We learned how to operate BCM within one day and have had no administration problems since,' Christiansen says. 'It runs itself.' Nortel's BCM retails for about $600 per station for a 48-phone setup, a price that's in line with those of traditional PBX systems.
New VoIP service providers are also emerging. This gives companies one-stop shopping for new, Internet-enabled phone systems. One such service is GoBeam, a two-year-old California company. It uses a broadband connection such as T1, DSL, or cable to route calls from a customer to a GoBeam server center. From there, the calls are routed over traditional phone lines, ensuring reliability and good call quality.
For San Jose-based Atlantic Pacific Carlson Wagonlit Travel's 32 employees, the GoBeam system has been a godsend, according to vice president of information services Mike Pacelli. For instance, says Pacelli, the GoBeam system is easily programmed to meet specific needs, such as ensuring that a live person rather than an automated attendant picks up all calls. In Atlantic Pacific's case, the system was programmed to route calls in a round-robin fashion, ringing at different desks until picked up. To ensure that one person doesn't get the bulk of the calls, each new call goes to a different extension. GoBeam also enables Atlantic Pacific to set up custom telephone numbers for specific clients, an option that comes in handy because of its big business in package tours to the NFL Pro Bowl in Hawaii.
For users, the solution is no different from standard phone systems; callers simply pick up the phone and dial. The only extra hardware at Atlantic Pacific is a small adapter that routes calls over a T1 line to the GoBeam center.
Atlantic Pacific's call management efforts get help from GoBeam's browser-based Dashboard interface, which gives users quick access to contact lists, call return via voice or e-mail, call logs, follow-me capability, or telephone configuration. And the system was a bargain, says Pacelli, about 10 percent of the $100,000-plus for a new, analog-based PBX. Call time is sold on a buckets-of-minutes basis, about $500 a month for 5,000 minutes.
Dotcoms Add Service
One of the VoIP pioneers, Net2Phone, also has hopped into the small-business market. It's a pure-Internet system, with business calls routed over Net2Phone's private IP network via dedicated high-speed Internet lines (not through an ISP, as the residential Net2Phone system uses). Net2Phone works to ensure quality by carrying calls over a voice-optimized network and by working to ensure the 'last mile' carrier to the call's destination is the best available, says vice president of enterprise sales Marty Rolnick. The cost is very competitive, anywhere from 20-40 percent off common domestic rates and half or more off international calling.
Most VoIP systems use the same telephone equipment found in any office, but new hardware options are showing up. Massachusetts-based Pingtel, for example, offers a Java-based phone called the Expressa ($649, 781-938-5306, www.pingtel.com), designed to give the standard telephone PC-like power to attach data, forward files, or perform several tasks at once. Furthermore, anyone who can write Java can tailor the Expressa to handle just about any telephony task.
Despite the improvements, VoIP still has some hurdles. Quality can still be a problem, disputes over standards are slowing the technology's development, and there's some question over whether big telecom companies will stand by while Internet upstarts muscle in on their turf. But for companies looking to inexpensively upgrade an existing phone system or install a flexible, new system, the integration of voice and data offered by VoIP may mean it's time to make that next call a digital one.
Service providers Net2Phone
Hardware suppliers Nortel Networks
Seattle-based writer Douglas Gantenbein writes frequently on telecommunications.