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VoIP Connects On Far More Than Cost


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Voip Connects On Far More Than Cost Now

November 28, 2004

By Eric Lai

Phone calls made over the Internet used to be inconvenient -callers were tethered to their desktop PCs by their phone headsets - and sounded awful.

Voice-over-Internet-Protocol, or VoIP, technology had been, like many things technological, overly hyped during the late 1990s. Truly, VoIP's only advantage over regular phone calls was that it was really cheap, or free, for the callers.

Much has changed. Internet phone users can now place calls from regular phones, cordless phones or even cell phones. Users can also enjoy sparkling sound quality, as consumer services such as Vonage and Skype have shown.

But long-distance and cell phone rates have plummeted, too. So is there any reason to upgrade to Internet telephony?
There is. For companies, Internet telephony is less about making cheap cross-country or international calls than about upgrading their clunky analog phone systems to digital IP ones that are easier to manage and more powerful.

New Voip features allow firms to easily forward calls to cell phones of workers in the field; send voice mail as e-mail attachments; and allow firms to consolidate their telecom and IT staffs into single teams.

"VoIP is no longer about cost savings. It's about features and flexibility," said Gilbert Hu, CEO of AltiGen Communications Inc. The Fremont company makes Voip systems for businesses with 25 to 200 employees. The company, which has won more than 40 industry awards for its phone software, announced its first full year of profitability last week. AltiGen expects its sales to grow by 25 percent in the coming year.

To oversee multiple incoming lines and employee voice mail systems, companies have traditionally relied on either PBX boxes that they managed themselves, or paid a monthly fee for an outsourced service, such as Centrex from Nortel Networks Inc.

Hu remembers when analysts in the late 1990s predicted that more than half of businesses would dump their PBX or Centrex phone systems in favor of Voip ones by 2004, The reality, says Hu, is that just one in 10 businesses have made that upgrade.

One reason was the economic downturn, which chilled IT and telecom spending. PBX boxes, while expensive to maintain, weren't breaking down very fast. So although companies could expect to save on maintenance by upgrading to VoIP, doing the switch wasn't cheap - not when new Voip phones themselves cost at least $200 each.

Then carriers began offering a hosted Voip service - sort of a digital version of Centrex - whereby customers could avoid massive upgrade charges and pay on a monthly basis.
"It eliminates the need to invest or manage the equipment. And it takes obsolescence out of the question," said Jason Hillery, a spokesperson for SBC Communication's business services unit.

SBC is aiming its hosted Voip service at smaller firms, although it announced this month that it had signed up the University of Notre Dame, with 7,000 users, as its largest customer.

Fremont wireless Internet Service Provider NextWeb Inc., will begin offering a hosted Voip service starting early next year.

"The real sweet spot for this kind of product is a company with between five to 25 employees," said Eric Warren, director of marketing for NextWeb.

For most larger firms, however, investing in Voip equipment makes more economic sense over the long run.

Challenge Dairy, a 200-employee Dublin-based farmer's co-operative that makes the popular Challenge Butter brand, is having a Voip system installed by Trans-West Network Solutions of San Diego.

The new system will allow Challenge to save money on intercompany calls, which will be transmitted over the company's data network and the Internet. It will also make it easier for sick workers or telecommuters to log in from home, said Alan Maag, Challenge's CFO. And it simplifies phone number changes from temporary or permanent moves.
"We're getting a better platform," Maag said. "And our savings are paying for the new technology."

Besides AltiGen, other East Bay firms will benefit as Voip for businesses takes off. Network Equipment Corp., also known as Net.com, has a line of 20 Voip products called SHOUTIP.

Zhone Technologies Inc. of Oakland sells a PBX replacement called the Z-Edge. UT Starcom Inc. of Alameda has a number of products aimed at businesses wanting to switch to VoIP, as well as products aimed at phone companies that want to use IP on their own network.

Best known for its voice and video conferencing products, Polycom Corp. has a wide range of IP-based desktop phones and conferencing products.



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

** Certain call types excluded.

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