Phone and data networks combine

The PBX used to be the front gate to many organisations, an expensive specialised machine guarded by a fierce gatekeeper who all calls had to go through.

Now a company's private branch exchange or internal telephone switch is more likely to be software on a standard PC server, priced at a point where even small organisations can afford relatively sophisticated solutions.

From there it's a short step to Voiceover Internet Protocol (VOIP), a technology which allows organisations to combine their phone and data networks to create a widely distributed virtual office.

Stephan Goodburn, general manager of Cogent Communications, says as phone systems have changed from analogue to digital, the greater power at lower cost equation has changed Cogent from being a seller of PBXs to an integrator of application-based solutions.

"People are looking for wireless solutions," Goodburn says.

Cogent sells systems based on Nortel, NEC or Samsung switches, depending on the size and complexity of the customer.

Goodburn says VOIP is taking off slowly, in part because of the reluctance of the telcos to embrace something which is eating into their telephony revenues.

"Every switch Cogent sells is VOIP capable, but only about 20 per cent of sites use them that way," he says.

While the argument for VOIP used to be cutting down calling costs for organisations which were spread over multiple toll zones, telcos have responded to the threat by lowering toll costs and offering more attractive deals into frequently-called zones.

Now VOIP deployments are more about the ability to have visibility of all branches and business units and to deliver data and voice on the same channel, Goodburn says.

"It is not a price-based market, people are looking at benefits for the business."

It is the applications which can be put on top of PBAXs and VOIP which make the difference.

"Most applications have to be custom-built, which small and medium businesses struggle with."

That is where rival Agile is getting good traction selling IP Office, a product which telecommunications giant Avaya developed for the small business space. It will scale from two to 250 extensions.

"IP Office does all the voice and data so it is a converged solution," says Agile general manager Tony Jayne.

"As well as managing the keyphones and PBX, it handles conferencing, firewalls and IP gateways, and bundles in applications like voicemail management, email and computer telephony,

"It is easy to implement and support, it works in a Windows environment, and you don't need a systems integrator.

"Most SMEs don't want to know about technology, they want to know what it will do and that it will keep going."

Jayne says about 60 per cent of the systems Agile is selling are for voice-data convergence.

He says it allows businesses with multiple sites to assign staff to call-centre-type work without needing a dedicated call centre environment.

"They can also have a single phone number or freecall number, then route the calls to the closest branch," Jayne says.

"Part of the demand is driven by remote access, so owner-operators or managers can get into their systems from outside. All of the technology is an enabler for people to run their businesses, and owner-operators to get their lives back."

Labour hire company Allied Workforce uses an an Avaya switch and IP Office to connect its 20 branches from Kaitaia to Dunedin, running on Telecom's Private Office Network ADSL service.

IT manager Jason Elliott says it was one of the factors which allowed it to grow 50 per cent last year without a corresponding increase in costs.

With 25,000 calls coming in on its 0800 number every month, Allied Workforce needed a system which would route calls to the nearest office as quickly as possible.

Elliott says that while Telecom does this for landlines, mobile callers must go through a complicated voice menu.

"We are currently working on bringing the 0800 number in-house so we can query incoming calls against a database and send them through faster," he says.

West Auckland law firm Smith & Partners uses VOIP to run the phone system for the 30 staff in two offices in Henderson and Huapai.

Office manager Rachael Adlam says the system means one receptionist/telephonist at the Lincoln Rd branch can handle all calls, freeing up the receptionist in the growing Huapai office for fulltime secretarial work.

Cogent installed an NEC PBX with Vicom call centre software, and there is a mix of analogue and digital phones. The two offices are connected with Telecom frame relay, dedicated data circuits which ensure reliability.

"All solicitors and senior staff now have direct dials, which cuts down the number of calls which go through the receptionist," says Adlam. "We also all have voicemail, which was a big step at the time."

Tasman District Council uses a VOIP system to tie together its seven offices and libraries, from Takaka east to Golden Bay and south to Murchison.

Information services manager Peter Darlington says the council installed an NEC switch connected to a Windows server running Corus software, which acts as the master phone console.

Every PC on the network also runs a Corus module, allowing any user to route calls, collect their voicemail and do anything an operator can do.

"While you can use your computer directly to take the call using a headset, most people just use their existing handsets," says Darlington.

"When a call comes in there is a Corus screen pop-up telling them who is calling, if that is in the directory, and the duration of the call.

"If the computer is turned off, the phone still acts as a phone.

"We liked the system because we did not have to replace handsets. We have a mix of basic analogue phones, digital ones with a small screen and the full IP phone which you can plug directly into the network switch."

To ensure quality of service was maintained, the council upgraded its frame relay network from 256kb to 768kb. Each office has six phone channels, each with a guaranteed 100kb of bandwidth.

Darlington says that is enough to ensure voice quality is maintained across the 200 extensions, leaving enough over for other council applications to run smoothly.

The upfront cost for the new system, including software, switches and servers and some new phones, was about $200,000. While it saves $11,000 a year in toll calls, leasing higher specced equipment and data lines costs $30,00 a year.

"What we get is a better quality of service we are able to deliver to ratepayers and residents," Darlington says.

"A call to Takaka with a query about a building matter can be redirected quickly to the building inspector in Richmond, and because it is on our own network it is not a toll call."

Front desk staff at each council service centre spend less time answering calls and more handling rate payments and public queries.

"It allows them to be more integrated with the main office in Richmond where the specialist staff are," says Darlington.

"It also gives us the ability to hot desk. If our head office staff need to be based at a service centre for a project or meeting, they can program the desktop where they are so it becomes their extension.

"They also have the ability to dial in from home, log on to Corus, and that becomes another extension."

Analyst Christopher Loh from International Data Corporation says small and medium-size New Zealand businesses have responded well to the new generation of smaller, cheaper IP communications products.

He says implementations are often coming with business process change.

"Organisations are seeing enhanced telecommunication infrastructure and services as a competitive advantage," Loh says.

IDC predicts VOIP use will grow faster this year than other technologies it monitors.