VOIP in the Enterprise

According to recent surveys of Chief Information Officers (CIOs), VOIP is top of the list as far as enterprise IT projects planned for 2006. That should be no surprise, for VOIP (Voice Over Internet Protocol) can be a huge cost saver for most businesses. VOIP basically involves converting analog voice into binary bits, packaging it as IT packets, and routing it over the same network that carries your data. The benefits of doing this include:

  • Less infrastructure. With telephone traffic traveling over your data network, you only need to maintain one infrastructure (data) and not two (telephone and data), and less infrastructure means less cost in the long run.

  • Lower service charges. Early adopters of VOIP saw its biggest benefit in reducing or even eliminating long distance charges. While this is still a big draw for VOIP, some large telcos are seeking some kind of toll for providing Quality of Service (QoS) for piggyback IP traffic, so the magnitude of this benefit may decrease over time.

  • Integrated messaging. VOIP makes it easier to integrate phone, fax, and email into a single messaging system since each of these messaging formats is now carried over the same infrastructure. VOIP makes unified messaging or convergence a reality instead of merely a mantra.

  • New tools. VOIP also leverages the creative power of computing to telephone traffic, which means new tools and applications can be developed to do things with voice communications that couldn’t be done using traditional circuit-switched phone systems. VOIP also makes telephone services more manageable for companies, and can give them greater control over how these services are deployed and maintained.

  • Global mobility. Wireless VOIP promises even greater benefits since the Internet is now ubiquitous everywhere, so a mobile VOIP phone that works at a hotspot in Kansas should also work in Taipei, Glasgow, or Sydney just as easily once this new technology has proliferated. In fact, wireless VOIP may even displace 3G as a global mobile communication standard, though we’ll have to wait and see how the market shakes out on this.

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VOIP is still an evolving technology and there are several protocols that support it. These standards include:

  • H.323 and T120. These are the earliest VOIP standards and were developed by the ITU. The protocols are complicated and have high overhead, but many VOIP vendors support them. H.323 is basically a gateway protocol used to enable backbone networks carring VOIP traffic, but the family of associated protocols also specify an end-to-end VOIP and multimedia conferencing architecture

  • Megaco/H.248. This standard represents a joint effort of the ITU and IETF, and defines the operation of media gateway controllers and media gateways, which are conceptual elements of many VOIP systems. The standard also replaces the earlier MGCP standard and supports peer-to-peer communications in addition to centralized communication systems.

  • SIP. Session Initiation Protocol is defined in RFC 2543 and is a lightweight VOIP protocol that has gained in popularity recently. SIP was designed to help overcome some of the incompatibility issues that have prevented VOIP systems from different vendors from interoperating properly with each other. SIP is basically a signaling protocol for call setup and teardown, and does this using ASCII messages similar to how SMTP, HTTP, and other TCP/IP application layer protocols work. SIP doesn’t completely replace H.323 however but it does sidestep some of the mechanisms of that standard, and the result is that while H.323 is seen as the established top dog in the VOIP world, many vendors see SIP as the way of the future and are aggressively promoting products that support SIP in their VOIP offerings.


The number of different types of VOIP technologies is huge, and the reason for this has to do with three things: different protocols and standards, different vendor approaches, and different customer needs. Let’s take the third issue first since it’s most important, that is, you should only adopt the technology your business actually needs. Are you a small business that just wants to save on long distance costs? Using a VOIP service provider like Vonage would probably be your best approach, but crunch the numbers first before you buy. Or you can go out and buy a VOIP phone you can plug into your DSL router, or an analog terminal adapter (ATA) that connects your legacy phone with your router. Cheap and simple, and easy to maintain.

Or does your company just want to reduce long distance charges between headquarters and a remote branch office? In that case, setting up a VOIP gateway at each site is one way of doing this, while replacing your PBXs with IP PBXs is another if the telcos for your offices already have service provider VOIP gateways you can directly connect your IP PBXs to. And with the IP PBX approach you have two more choices: either leave your traditional phones and phone lines installed, or replace your phones with IP phones that plug into LAN drops around your office to get the greatest VOIP benefits for workers. And if you don’t want to purchase or lease an IP PBX and maintain it, you can opt for an IP Centrex, which is basically an outsourced IP PBX service offered by some VOIP providers. Or if you’re a large enterprise with high-end routers on your backbone, you can upgrade these routers with cards providing VOIP gateway and gatekeeper functions, replace your legacy phones with IP units, and have it all.


There are as many VOIP vendors out there nowadays as there are stars in the sky, and while you may be able to get significant savings by going with a startup vendor that offers the latest innovations, large enterprises may want to take a more conservative approach and go with Cisco, still probably the dominant vendor in the high-end VOIP arena. Cisco offers different types of VOIP solutions for the needs of different businesses and according to the size of your business. A good place to start if you want to research these solutions is this page, which describes the different solutions and how they are implemented. If you want to go with other VOIP vendors, that’s fine but make sure you do your due diligence concerning their offerings, history, and customer base—the last thing you probably want to do is implement a solution from a vendor that is here today and gone tomorrow.

Microsoft and VOIP

Which brings me to Microsoft. Why doesn’t Microsoft have a VOIP offering for its customers? After all, they already own the desktop and have a significant share of the server market. The simplest explanation to their absence in VOIP offerings is that while they own the nodes (servers and workstations) they don’t own the network (cabling, switches, routers, and wireless access points). Other vendors own the “pipe” and Microsoft products have traditionally been consumers of the pipe, not pipe itself.

But that may be changing. The first shot in this impending Battle of VOIP was fired when Microsoft announced a joint venture with Qwest to provide converged communications services using Microsoft Solution for Enhanced VoIP services, a new offering we don’t know much about yet, together with Qwest’s OneFlex VOIP services. What we do know at this point is that Microsoft Solution for Enhanced VoIP Services will be designed to enable telecommunication carriers to offer integrated voice, e-mail, instant messaging, presence and collaboration capabilities to their customers—particularly to customers using Microsoft server products like Live Communication Server 2005 and desktop products like Microsoft Office. In other words, it seems (and would be logical) for Microsoft’s VOIP offerings to target not just the ability to enable telcos to provide new VOIP services but to base access to these services upon existing Microsoft products like Office. What that will exactly mean, and how long it will take until working prototypes are available is yet to be seen, but one thing we know about Microsoft is that once they eventually get rolling they can gain a lot of momentum in a market segment.


As I said at the beginning of this article, VOIP is on everyone’s mind these days, from the home user who wants to save on long distance costs to the large enterprise that wants to leverage the benefits of unified messaging and new collaborative technologies. VOIP is and will be a hot topic for the next few years as new technologies are developed, so it’s worth investing time and effort learning all you can about this technology, starting with this article as a launching point.

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