Dow Blazes VOIP Trail

A Fortune 100 company is building an IP voice/data network that could be a role model for other users.

There's a good chance that The Dow Chemical Co.'s new IP converged network will be remembered as the industry milestone that finally got the IP telephony ball rolling. The $30 billion global company is building a 50,000-user integrated IP voice/data network.

In partnership with outsourcer Electronic Data Systems Corp. and network equipment giant Cisco Systems Inc., Midland, Mich.-based Dow has completed a pilot of its converged network, DowNet, at selected sites across four continents. Nearly all 450 Dow sites in 35 countries should be operational by the end of the second quarter, says Ray Warmbier, DowNet program manager.

Voice over IP (VOIP) is a hot topic of discussion, but large installations are scarce, particularly in the U.S. Yet Dow is making a wholesale, pioneering commitment to the technology. In fact, the size of DowNet is matched only by Cisco's own worldwide VOIP network.

"People will watch this rollout carefully," predicts Larry Hettick, an Alameda, Calif.-based independent telecommunications consultant who specializes in packet network convergence. "Dow's adoption of IP telephony provides serious evidence to other enterprises that VOIP might finally be ready for prime time."

Why take the plunge? It would seem tough to justify a global network overhaul during a recession. But most of Dow's existing circuit-switched private branch exchanges (PBX) were very old and were running different software versions, explains Warmbier. "Some were upgradable and some weren't. Getting our old PBXs upgraded, replaced and standardized on a global scale would have cost us a great deal of money," he says.

Rather than continuing to invest heavily in legacy technology, Dow turned to IP telephony. It's replacing circuit-switched PBXs with Cisco CallManager IP PBX server software, which runs on standard PC operating systems and hardware. Multiservice routers at Dow sites will shuttle both IP telephone calls and data packets across a common IP virtual private network (VPN) delivered by Equant, a global wide-area networking services provider based in Amsterdam.

The IP VPN service is built on Multiprotocol Label Switching technology, which brings quality of service and privacy to IP networks. The Equant IP VPN replaces a mix of frame relay, Asynchronous Transfer Mode and other wide-area network services at Dow. Plano, Texas-based EDS is installing and managing the entire project and is responsible for delivering on contracted telecommunications service levels.

Savings, Ease of Use

Warmbier says savings will come partially from bypassing the public switched telephone network in many non-U.S. sites where phone calls are expensive. In addition, he says, upgrading and changing standard IP- and PC-based systems is easier than relying on a PBX vendor to change its proprietary telephony software.

This network is important to Dow's acquisition strategy. "We want to be able to bring new users from acquired companies into Dow work processes as quickly as possible," Warmbier says.

Dow's ambitions also include deploying new IP-based multimedia applications. The installation of regional Web-based call centers, for example, is expected to improve customer service through real-time, multimedia collaboration between call agents and Dow customers.

Dow is also running unified messaging, whereby users can access voice, e-mail and fax messages from a Microsoft Exchange in-box. The Radicati Group Inc., a research firm in Palo Alto, Calif., estimates that unified messaging provides a productivity gain of about 25 minutes per user per day.

Dow also plans to make use of IP/TV, a Cisco capability for delivering corporate webcasts. "Many of our senior managers want to communicate globally with their people on a regular basis, and this is a very efficient way to do it," says Warmbier.

One reason enterprises have been leery of migrating to VOIP is that they aren't convinced of an IP network's ability to guarantee application performance when voice and data - which have inherently different network performance requirements—coexist.

"At this point, the service we're getting with our [IP] phones is on a par with what we get with our [traditional] phones," says Warmbier. "But we did have to work hard on tuning the routers to eliminate echo on the line."

EDS is responsible for configuring the routers to classify, mark and prioritize Dow's voice, data and video traffic and then coordinating with Equant to make sure the network provides the high levels of service quality required by the contract.

Wexler ( is an independent IT and networking writer and analyst in Campbell, Calif.


Dow Chemical Co.

Business: The No. 2 chemical company in the U.S. A world leader in the production of plastics, chemicals, hydrocarbons and herbicides and pesticides. Merged with Union Carbide Corp. on Feb. 6, 2001. No. 78 on the Fortune 500 list. Known as the maker of Styrofoam.

Net sales (2000): $29.5 billion

Net income (2000): $ 1.7 billion

Top IT executive: David E. Kepler, corporate vice president for electronic business and CIO



Copyright © 2002 IDG Communications, Inc.

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