The VOIP Vanguard

When a $30 billion global company starts rolling out an "emerging" technology to 50,000 users around the world - right smack in the midst of a recession - you start to suspect something has already emerged. Something that really saves money. Something ready for prime-time corporate consideration.

That's why you should watch attentively as Dow Chemical unfurls DowNet, its voice over IP (VOIP) network, this spring at 450 sites in 35 countries. This integrated IP voice/data network, being built in partnership with Electronic Data Systems and Cisco Systems, signals a substantial, pioneering commitment to VOIP by a Fortune 100 company.

The Dow story figured prominently last week in our Knowledge Center on Enterprise Networking, a special report that you can find in print and online at

Reading Dow's story, and other reports from smaller pioneers on the same frontier, it struck me how once again the imperfections of a newer technology become less compelling than the business reasons behind taking the risk.

Dow is gambling on a standard, IP-based technology - an increasingly safe bet, actually - rather than submitting to a very expensive upgrade of its proprietary private branch exchange (PBX) telephone system. But saving money isn't the sole driver here. Having the ability to move quickly and to flexibly plug new users into its work processes around the world is expected to give the company's acquisition strategy a big efficiency boost.

Dow plans to deploy new IP-based multimedia applications, which will enable regional, Web-based call centers to offer better customer service via real-time collaboration.

As our story also noted, the Midland, Mich.-based chemical giant is already learning some key lessons during this massive deployment - such as the value of baby steps vs. a big bang. As EDS set about deploying new VOIP capabilities for Dow, the outsourcer discovered that rolling them out one at a time across the enterprise minimized incompatibility problems. In essence, they found a less disruptive way to roll out a disruptive technology.

Another version of that approach is the more gradual one of coexistence, which appealed to Lego Systems Inc., a division of the Danish toy maker. Lego is rolling out a VOIP software upgrade to its existing Avaya Systems PBX, allowing the company to play with various IP phone scenarios without disturbing existing telephone users.

Of course, VOIP, which converts analog voice signals to digital signals and blasts them over IP networks, still has some notable detractions. It's light on security features, it's prone to voice quality problems, and it's shy on workable service-level agreements and often goes begging for available technical talent.

As of November, the majority of network managers still weren't making any plans for VOIP in the next 12 months, IDC found in a survey of 400 WAN managers. Yet while 50% dismissed the notion of launching voice/data integration projects anytime soon, 43% said they expect to be integrating the two over network backbone or access lines this year.

Then there's the Gartner view, which sees a great migration to VOIP in the 2003-2005 time frame. But the analyst firm hedges its prediction with cautions about security weaknesses, incompatible vendor offerings and other technical limitations.

Still, the Gartner folks are pushing enterprises to plan for a networking future that can readily handle new IP-based applications.

Widespread deployment of VOIP is as inevitable as the IP networks underneath it. So you'll need to keep a close watch on it. Not just because it's a cool emerging technology, but because it's emerging as a cost-effective way to deliver what the VOIP vanguard will be enjoying: a competitive advantage.

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