Avaya chief on the joys of IP telephony

29 Nov 2002

If you haven’t heard of IP telephony, you’re not alone. Unlike the PC, Windows and countless other technologies, it is deployed in precious few organisations.

Don Peterson (pictured) wants to change all that. At a European press briefing and product demo in London last week, the CEO of Avaya, a leading provider of contact centre technology, and senior colleagues outlined their vision of how IP telephony or IPT would change the way businesses operate and communicate.

IP telephony refers to the convergence of a company’s voice and data networks so that all types of communication – audio, video, data, wired and wireless voice – run over a single internet protocol (IP) network. The biggest benefit is cost savings. According to research firm Analysys, organisations can cut operating costs by almost 50pc by switching from traditional networks to IP networks. By connecting IP telephones to a company’s wide area network, a company reduces the cost of providing a complete infrastructure at each site. Moreover, a company can save significantly on its phone bill by using an IPT network rather than the more expensive public phone network for international calls – the so-called ‘toll bypass’ factor.

Other claimed benefits for IPT include the productivity gains associated with having off-site employees such as homeworkers and sales personnel seamlessly connected to the corporate network, and enhanced business continuity potential thanks to the way an IPT network is designed.

With all this low-hanging fruit ripe for picking by any IT manager worth their salt, no wonder that Analyses predicts the European IPT market will be worth €7.4bn by 2007.

But research firms have been known to get it badly wrong before, so what convinces Peterson that this is a technology whose time has come and that Avaya is the company to make it happen? Taking the first question, he argued that a number of obstacles that had prevented the technology taking-off in the past were gradually being overcome. For example there were no longer question marks over the reliability of IP networks and the quality of voice calls over IP, he asserted. “We can do the ‘five nines’ reliability,” he said, referring to the vaunted 99.999pc reliability benchmark set by the public telephone networks. Likewise, the lack of technological standards had once been a turn-off for customers who wanted to build networks that integrated the products of different vendors but that nut, too, looked like being cracked through the emergence of new standards like SIP, he said.

In Peterson’s view, moreover, too much emphasis had been placed on the technology and not enough on the applications which would drive the demand for it. That is why Avaya is spending 12pc of its turnover on research, much of it in the area of IPT applications, he said. Currently on the test-bed, for example, is a new product termed ‘hi-fi telephony’, which helps participants in an audio conference know who is speaking by giving each speaker a physical reference.

Another factor that has traditionally inhibited businesses from adopting the technology was what to do with their existing networks which could represent a sunk investment running to millions of dollars. The way to solve this is simple, said Peterson: offer customers a choice. Customers moving into a new building can install a new IPT network while those that don’t want to junk existing equipment are offered Avaya IP solutions that bridge their voice and data networks.

Yet another flaw of earlier attempts to sell IPT systems was that channel partners did not do a good job in educating users about the technology and giving them the back-up support they needed. So an important area of focus for Avaya is proper training for the channel, according to Clive Sawkins, general manager, UK & Ireland. “The philosophy of our accreditation programme for our reseller partners is this: if you don’t pass your exams, you don’t get to play with my products. It’s very straightforward. And it’s not just about traditional how-to-bolt-the-thing-together training; you have to got to get marketing and sales accreditation as well. We made a conscious decision if we’re going to have the channel representing our brand, they’d better be damn good.”

The biggest obstacle currently facing vendors has nothing to do with any of the above however; it is the budgetary constraints felt by cash-strapped business. It seems that while large corporates are trialling the technology, purse strings are still being pulled tight and there is little investment going on. Most of the early adopters of IPT have in fact been smaller businesses, which, less constrained by strict spending embargoes imposed from above, have been able to spend money on what they perceive as a useful new technology. So IPT, unlike most new technologies, may take root in the SME sector first.

On the ‘why Avaya’ question, Peterson was unequivocal. “First of all, we have the products to do it. Secondly, we have a very strong installed base in the US, which I think is going to lead the way in IP telephony and thirdly, we’ve got the financial wherewithal to go very aggressively after the market.”

He described Avaya as a “strong third” behind 3Com and Cisco in IP telephony but having recently introduced two new product ranges – IP Office and Eclipse – he expected Avaya to move up the field: “Third place is not at all where I expect us to be a year from now.”