Converge to emerge

Sunday Business Post - Computers in Business Magazine - July 2007

Convergence is no longer simply about cheap phone calls, it has evolved to become a central hub for many SMEs and larger businesses, writes Dermot Corrigan...

Converged communications networks, such as voice over internet protocol (VoIP) telephony, have the potential to help Irish SMEs utilise their communications networks to improve the way they do business.

The ability to make phone calls is no longer the main reason why businesses choose to invest in new communications networks, said Donal Berry, business development manager with Datapac's communications solutions group.

"I do not think that people invest in voice over IP technology so that they can get dial tone on their phone the same as traditional telephony," he said. "The investment is for business drivers.”

Converged information and communications technology (ICT) systems can radically shake up a small business' internal and external communications, according to Matthew Burke, head of solutions, design and consultancy with Damovo.

"Convergence is primarily viewed as the integration of voice, data and video across a single IP network," said Burke. "In convergence, the data network becomes the backbone for all communications within a business."



Put simply, this means that instead of having a traditional telephony system with routers, switches and individual lines, one application runs on your office network and manages all your internal and external communication (including voice calls, emails, data transfers and audio and video traffic) over an internet connection.

"Traditionally your computers ran on your data network and your voice was on a separate telephony network,” said Berry. “On a truly converged network you have your CRM, ERP, Microsoft applications, switches, routers and voice all on the one."

Niall Feely, director of business market with Eircom, said that SMEs often found the progression to converged systems from traditional telephony systems easier than larger organisations did.

"We find now that it is easier, cheaper and faster for smaller companies to adopt new technologies and new ways of working," said Feely.

James Finglas, sales director of MJ Flood Technology said that Voice over IP (VoIP) was the most common stepping off point for convergence in Irish SMEs, who were maybe not fully aware of the potential and practicalities of convergence.

"Skype really raised the profile of Voice over IP and has raised the platform for companies like ourselves to be able to educate SMEs around the different technologies involved in convergence," said Finglas.

Burke said that the idea of convergence was being taken on board in all sizes of business in Ireland.

"With more and more articles appearing in the national press, small business owners are learning about the practical benefits of converged applications and services,” he said. “Features and benefits of convergence that were once only known to the IT department are now widely known at boardroom level."

Apart from VoIP, some of the features and benefits that come under the convergence umbrella are multimedia conferencing, video broadcast, unified messaging, presence features, instant messaging and contact centre technologies.

Feely said that most small business owners were typically not as concerned with exciting new technologies, and more worried about how they could use convergence to build their business.

"People are much more interested in what it can do for them, rather than the technology itself," he said. "You would rarely get a customer who says look I want to buy some of this convergence stuff or I want voice over IP. They are much more interested in figuring out how to adopt email to sell more to their customers, or how can we become more productive or get my employees set up to work from home."

Vincent McFadden, head of convergent solutions with BT Ireland, said that given the pace of development in the convergence space, it is important that SMEs identify the individual requirements and advantages that apply to their business.

"The key challenge is for the SMEs to understand the benefits to their business from deploying converged technologies,” he said. “Some of the benefits are tangible and the business case is easy to define and justify, however, as we move beyond the integration of voice and data and to more advanced converged technologies the benefits are less tangible, as they are more around productivity and efficiency gains.”

What can convergence do?
Converged networks can use voice over IP functionality to carry all their telephony needs on the one system.

"You get one number from your communications vendor," said McFadden. "This number is virtualised, so it doesn't belong to any single device. Your real devices (home office phone, mobile phone, office desk phone, and personal home phone) are all configured behind that virtualised number. During normal office hours calls will ring at all numbers except your personal home phone. The call can be answered at any device, transferred to any other of your devices during the call. So I ring you at 7.30 in the morning. You answer at home. It's a long call, and you need to get to the office. Transfer the call to your mobile. Continue till you get to the office then transfer to your office IP phone."

The latest converged networks are including FMC (fixed mobile convergence) functionality, which can integrate mobile and fixed line networks, McFadden said.

"Fixed mobile convergence solutions make it easier for employees to collaborate and respond rapidly to customers in a multi-vendor, standards based environment. The SME wants to control mobile costs, improve communication, leverage fixed and IP investments, hook PBX (Private Branch eXchange) and mobile phones together, cut duplication of devices, billing analysis and management and make employees more productive."

A major benefit of all this is that call costs drop considerably, and can disappear altogether. However, Finglas said that concentrating solely on cheaper phone calls was to miss the real advantage of converged networks.

"Everybody focuses in on the call costs, and these solutions may or may not provide a return there, it is dependent on the type of business and the activities that they are involved in," he said. "Where you really start to derive benefits is around productivity."

CTI (Computer Telephony Integration), which is typically used to drive efficiencies in call centres, is far less expensive and easier to implement using a voice over IP system, according to Berry.

“You can have a centralised operator anywhere on your data network so you can route calls far easier than you would have traditionally,” he said. “At the moment, the customer will call and say this is so and so from whatever company and I would like to order this much of this product. There are steps involved in that, you have to guess which customer is calling, then get all the customer details up on the screen and then get the order form up on the screen and start inputting the data.”

“With CTI the incoming customer call is identified by the number they are calling from and the call is popped to the agent that handles that account and all the relevant order forms will automatically pop up onto the screen. You are taking three or four steps out of handling a call."

Berry said that convergence was also enabling people to access the office network and applications from wherever they happened to be.

"Teleworking is a major driver for voice over IP, your network can just expand out to wherever you have a broadband or VPN (virtual private network) connection," he said.

UC (unified communications) was another attractive driver for converged systems, said McFadden.

“This goes beyond the integration of voice and data and into a world where communications infrastructure integrates and converges with IT," he said.

A unified communications solution can include voice, e-mail, fax, instant messaging, video and web conferencing, file sharing and applications sharing, and means that two colleagues can work together on projects regardless of their physical location.

“UC enables users to collaborate and conference though a choice of communications medium, and to hold virtual meetings regardless of the location of the participants," said McFadden.

According to Feely, the emergence of intelligent converged networks means that SMEs can change the way they deploy and use key business applications. Instead of purchasing a software product and installing it on their server or each machine in the office, companies can now access applications online using flexible solutions hosted and delivered on the Internet.

"You are not bothering with buying servers and hardware and software licenses and going through implementation projects, you are just paying a fee per month, per user,” he said. “Also you can then expand it or drop it as you want.”

Feely said that this flexibility was especially useful to smaller businesses that may not have the IT infrastructure or resources to deploy complex applications required as their business expands.

"You do not necessarily have to invest in new hardware," said Feeley. "If you look at a hosted solution, all you really need is a PC that can run an Internet browser and access reasonably rich Internet content. Previously if you wanted a new application often it meant upgrading your memory and replacing your PCs."

Burke said that online video was another exciting tool brought to the table by convergence.

"New services such as IPTV (Internet Protocol Television) and video on demand will offer businesses new and interesting opportunities to interact with their customers," he said.

The practicalities
Implementing a converged communications network in an SME requires careful planning, said Burke.

"The migration strategy to convergence and IP is crucial for an SME," he said. "A successful migration takes forethought so it proceeds smoothly, at a pace appropriate to their needs, and with minimal risk."

According to Feely the first step in convergence implementation for small businesses is to put in a good quality high-speed broadband connection.

"The main backbone for a lot of SMEs would just be a broadband connection," said Feeley. "You get up to 6MB download speed now so capacity-wise that is massive for the vast majority of SMEs. Once you have that in place, you can do it in a piecemeal approach, you do not have to necessarily go for a big bang, throw everything out and start again."

Finglas said that until recently Irish broadband connections were not sufficiently resilient to carry IP telephony, which meant that SMEs were forced to either go for an expensive solution or continue using traditional telephony. This has now changed, however.

"The two things that were blocking that were the lack of quality of service on the line so the entry level was a full MPLS (multi-protocol label switching) solution," said Finglas. "The second thing was a service level agreement. Both of those are now being launched, which will open up the market and drive greater adoption from SMEs.”

McFadden said that convergence solution providers and vendors were now beginning to actively target the SME space.

"The major convergence service providers and vendors are beginning to aggressively target the SME market with relatively cheap, so called plug and play products," he said. "Products which combine the disparate functional technologies such as PBX, router, switch, firewall, voicemail, conferencing, wireless et cetera will start to appear and competition will drive price to a point where it becomes competitive to SMEs.”

McFadden said that larger SMEs might look beyond standard broadband offerings and consider implementing their own virtual private networks (VPN) as their connection point to the Internet.

"The VPN may be an internet based solution, possibly based on DSL (digital subscriber line) connectivity, which is much cheaper than leased lines, or a private solution using MPLS technology,” he said.

Finglas said that many traditional PBX telephony systems that SMEs may be using already have the potential for IP telephony built in.

"You can have a hybrid solution where the PBXs are part of the new solution," he said. "That can be done with most PBX systems put in over the last couple of years, so it is not a question of throwing out all the old hardware."

costs
Feely said that competition in the Irish communications market meant that the cost of converged solutions had fallen considerably.

"People will spend a lot more now on desks and chairs than they will on communications technology," said Feely. "The change has been quite dramatic in recent years. You can get business quality broadband for €40 per employee per month."

McFadden estimated that the total cost of putting in a sophisticated future proofed converged network for a 20 user SME was approximately €7,400. This included a power over ethernet switch (€2,200), a router (€1,000), 20 IP handsets (€3,200) and sundry installation costs (€1,000).

Converged solutions then lead to significant cost savings for businesses, with free or low cost telephone calls the most obvious. McFadden said that there were also savings typically made in the areas of infrastructure support and maintenance.

Berry said that adding and changing users was much more straightforward and less expensive with IP telephony systems.

“There is a lot of money spent on moves, add and changes in traditional voice systems," he said.

Scalability is very much a feature of converged communications networks.

"If you put in a VoIP solution it is similar to a server, if it has expansion slots as the company is growing you add another card and you add a number of station licences,” he said. “The solutions are scalable by design, without having to refresh the hardware before you reach quite a high level."

The future
The use of mobile devices within converged solutions will increase greatly over the next few years, said Finglas, who predicted that companies will soon be implementing their own mini-mobile networks across their sites.

“A lot of companies are looking at a GSM gateway that is specific to the LAN or the company,” he said. “When you come into a radius of your site it will actually pick up your own GSM gateway, rather than O2 or Vodafone, and then you can actually make calls onto your IP network, onto an MPLS and out to the main office. The technology is there and we know it works. One of the barriers to this is the regulator, as far as we are aware a decision has to be made at that level."

McFadden said that the communications market itself would see convergence in the coming years, with infrastructure and applications vendors working together to provide solutions.

"Convergence will drive the continuing trend towards interoperability and integration between the network vendors and software vendors," he said. "Virtualisation of resources in the data centre, server and network, will drive corporate IT resource centralisation. Widespread build out of quality of service enabled wide area network infrastructure such as MPLS and SDSL (symmetric digital subscriber line) will be a key enabler to the provision of converged applications across organizations and will enable a more rapid adoption of the home worker concept.”

Feely said the idea of using service providers to provide a converged IT function for SMEs was in the pipeline.

"You are starting to see the emergence of things like software as a service, hosted applications, and bundles that include your broadband, web-hosting, security, back-up storage and maybe some applications,” he said. “This is increasingly the way things are going.”