‘Future-proofing’ Your Telephone Network

Getting businesses today to spend money on new technology might not seem to
be the wisest decision for an equipment vendor, but Alcatel officials are banking on the idea most are looking past
short-term goals.

The company is rolling out three IP telephony phones Monday to convince
companies to switch from a private branch exchange (PBX)-based telephone
network, part of its e-Reflexes product line.

Pricing for the three new IP phones — the e-Reflexes 4035, 4020 and 4010
IP Telephone — range between $495 and $285.

PBX is a circuit-based technology used by many larger corporations today,
acting as a mini-router for all the telephone numbers in an organizations,
freeing them from buying one external telephone line for every employee at
the local telephone company. (Hint: it’s the extension you dial to reach
someone in a particular organization, say (555) 555-5555, ext. 245)

The problem with PBX technology is that it often uses a closed, proprietary
system specific to the hardware vendor, making it a problem for in-house
developers to create enterprise-specific content on the phones, be they a
cubicle phone or digital wireless phone.

Many equipment makers believe IP telephony is an ideal method to circumvent
these restrictions, reducing costs by eliminating the need to write an API
for every new application the IT department wants to create.

Towards that end, Alcatel also announced a software development kit for
developers, letting them produce XML-based applications over one API (the
XML Telephony API) and independent of any particular operating system. The
kit costs $4,469 and includes code, documentation, examples and 10 user

It also frees up server space, according to Jeanny Bayerl, Alcatel
marketing program for communications director.

Digital phones requires one port, so with a PBX card with 32 ports, you can
put 32 phones on that card, she said. IP phone cards use a completely
different approach; if you are communicating with IP to an endpoint, like
to a digital or analog phone or network trunk, it can handle 60
simultaneous calls

“If you’re looking at something that can support up to 60 simultaneous
phone calls, you’re really talking about supporting a population of, say,
500 IP phones per card,” she said. “It takes away a lot of CPU hardware.”

To date, the market for IP telephony has been spotty. Despite obvious
technology improvements, it has been plagued with voice quality problems
and high cost. But cost reductions and improvements have created an
increase in attention.

According to Allied Business Intelligence (ABI), IP telephony will soon
surpass PBX-based shipments, mostly in hybrid and IP-enabled
systems. Julia Mermelstein, an ABI senior consulting analyst, said many
companies are reluctant to invest in circuit-based technology that might
soon be obsolete.

“Beginning in 2005, we will see the sale of all-IP PBXs take off as more
and larger enterprises complete the evolution to IP-centric phone systems,”
she said.

“It’s not that people are going total IP right now, it’s never an
all-or-nothing situation,” Bayerl said. “Sometimes we find schools or
universities that are doing a kind of leap frog (in technology), but
generally, when we say all-IP, we don’t mean corporation-wide, we mean IP
on a subset of the network they are doing that in, like branch offices that
move over to IP, but the corporate office keeps their digital phones.”

To meet today’s requirements, Alcatel officials said they are offering an
IP plugware option, which allows businesses to buy digital phones and
upgrade to IP in the future.

“The whole market is feeling the effects of the economy downturn,” Bayerl
said. “A lot of people aren’t spending, and even when they are spending
money they want to make sure they’re going in a ‘future-proof’ direction
and spending it wisely — not the frivolous spending we saw a couple of
years ago.

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