VoIP for Enterprise Customers: A COLT Business Briefing

Data Voice Managed Services

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Section Page

1 The hype about VoIP 3

2 What is VoIP and what has it got to do with convergence? 4

3 What are the business benefits of VoIP? 5

4 Cost in the first instance, but agility in the long run 6

5 Why not just do telephony over the public internet? 7

6 A question of protocols 8

7 Is VoIP secure? 9

8 The big choices: revolution, evolution or migration 10

9 Opening up the future 12

Contents

SECTION 1: THE HYPE ABOUT VoIP

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KEY POINTS:

» The hype about VoIP is becoming reality

» Businesses of all sizes are taking VoIP seriously

» VoIP can help transform your communications strategies

Hype is an occupational hazard in business: new fads, opportunities, and modelscome along with increasing regularity, and you’ve got to take a long hard look at eachone of them before deciding to part with your cash or change the way you work. VoIP– Voice over Internet Protocol – has been enthusing commentators and self-styledvisionaries for quite a while now. Allied with the subject of ‘Convergence’ – the comingtogether of previously separate communications and computing services across intoone intuitive, easy to use network – VoIP has been touted as the way to cut costs(both capital and operational), transform the way an organisation works (making itmore flexible and agile) and enabling business to be much more responsive to theneeds of their customers.

The test of any technology that’s been given a lot of hype is, of course, time. And allthe signs are that VoIP really is something that’s worth taking seriously. More and morelarge enterprises are realising that they can deliver reduced costs and demonstratechange in the way their people work. The buzz around VoIP has become more seriousover the last year, and many commentators are starting to talk about ‘VoIP coming of age’ and promising us that the technology and applications that go with it have ‘matured.’

So, for once, there’s a distinct possibility that the hype is justified and real investment –serious investment – is being allocated to VoIP. The talk around convergence isn’t soesoteric anymore: it’s become very down-to-earth, and businesses are making veryreal changes to the way they operate. And that trend isn’t confined to largeorganisations – many medium and small ones are now identifying the benefits ofmoving from a world of physical and fixed circuits to one based on IP connectivity.

Before we even try to get technical about the subject, let’s define VoIP, understandwhat it has to do with convergence, and then work out exactly how you can benefit.

SECTION 2: WHAT IS VOIP AND WHAT HAS IT GOT TO WITH CONVERGENCE?

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Voice over Internet Protocol (VoIP) takes your words and turns them into digital packetsand sends them out across a data network to their destination. The packets are routedin the most efficient way possible over a data network and then reassembled at theother end to become the sound of your voice. Internet Protocol (IP) is the networkingtechnology which computers use to communicate with one another. When you send anemail, or share documents, or watch video, it’s all done in the same way using IP: everybit of information is chopped into packets, labelled, and then sent as quickly andsecurely as possible to a place where it’s all put back together seamlessly.

Over the last few years the concept of Convergence has received a lot of attention, andhas often been hidden by over enthusiastic descriptions of what it might mean for abusiness and the way we all work. The hype has obscured the essence of whatconvergence is all about: simply, it’s the coming together of different means ofcommunication (voice) and computer (email, CRM, etc) applications onto one IP basedinfrastructure. Some experts like to talk about the three wires that enable our desks to bepart of the business world: the power cord, the telephone cable, and the computer cable.We can’t do away with the first one, but we can do something about the other two.

Convergence isn’t actually about technology; it’s about what you can do when youmake technologies work together in an open and easy way.

The importance of VoIP is the fact that voice is the most significant communicationtool we use each day. The coming of email or text messaging or even the ability toshare and swap complex files has not down-graded the power of the simple phonecall. All the surveys show that the cost of calls – and therefore the amount of minuteswe spend talking through a fixed or mobile handset – is still a major part of the IT &Telecoms costs of any organisation. The more we do business the more we talk, that’sa fact of life. The point about VoIP is that we can make talking to each other simplerand cheaper, and ensure it integrates with a host of other clever applications thatmake us more productive and responsive each and every day.

In fact, many organisations have found that moving to VoIP has enabled them tointegrate mobility and a host of other applications into the way they work. That meansthat you could look at VoIP as the gateway to true convergence: it’s the point wheremost organisations start their journey to the future. Very few businesses are braveenough to rip out the past and introduce a completely new way of working in onerevolutionary move. Most want to evolve into the future, gently nudging their peopleand systems into a new way of working, and then building on success as they reapthe benefits of each wave of change.

And that makes perfect sense; VoIP is the perfect place to start as you move into theconverged future, and there are some very sound business reasons why that is the case.

KEY POINTS:

» IP is the new common language

» Voice is still the predominant business communication tool

» VoIP is the catalyst for convergence

SECTION 3: WHAT ARE THE BUSINESS BENEFITS OF VoIP?

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The story is very familiar: we all need to be more efficient, more responsive, and to cutcosts at every opportunity so that we can be competitive. If we don’t do it, then someoneelse will. The struggle is always to do more with less.

VoIP is one of those rare opportunities that enable you to do just that. Traditionally, abusiness would have a telephone system and a data network: two sets of equipment, twosets of people making them work and a lot of bills. Each physical site would need a PBX,and remote workers, home workers, would dial in using the PSTN, incurring charges asthey do so. The set up is relatively rigid, and it’s complex to make changes and addservices: it becomes a big technical challenge that soaks up time and investment money.

By creating a single IP network that carries both data and voice, you can cut through thatcomplexity and reduce your costs while reducing your dependence on expensive PRIcircuits. Recent research1 has found that companies who have moved to VoIP havemanaged to cut their annual IT and Telecoms costs by up to 30%.

Migrating your voice applications to your data circuits will no doubt raise the question ofsecurity and resilience. By using data circuits for voice calls, you will gain flexibility andgreater control over communications through the aggregation of traffic and the ability toquickly reroute traffic in the event of unforeseen disruptions to maintain business continuity.Confidentiality, both on and off network, is guaranteed as all your IP calls are carried on adedicated network circuit and routed over a secure IP VPN2.

You also spend less on the phone calls themselves. Calls over your IP infrastructure are freewhen routed across your IP VPN. When someone in one branch calls a colleague the call isno longer routed out over of the PSTN because it’s contained within your private IP networkFor organisations that have a broadly or highly dispersed workforce, VoIP can start to makean immediate impact on the bottom line. It also has a direct effect on the productivity of yourpeople because they’re able to use the IP PBX functionality seamlessly and concentrate onwhat they do best.

1 The Economist, October 12, 20062 Excludes public Internet version

KEY POINTS:

» VoIP saves money, simplifies networks and optimises resources

» Enables mobility and presence strategies

» VoIP is secure

BENEFITS OF VoIP

Cost Savings» Free on-net inter site calls using an IP VPN» No on-site gateways required» Reduced dependence on expensive multiple PRI circuits for carriage of calls to PSTN» Optimised call breakout points

Security and Resilience» Built with business continuity in mind» Seamless rerouting of traffic in the event of disasters thus avoiding costly disruptions to

the business» All IP calls are carried on dedicated network circuits and routed over a secure fully

encrypted IP VPN delivering business confidentiality both on and off network with nocarriage over the public Internet

Operational Efficiency» By using data circuits for voice calls, the customer will gain greater control over their

communications and how they aggregate their voice and data traffic which ultimatelybrings cost and operational benefits

» Provides ability to seamlessly and cost effectively extend IP PBX based corporateapplications and features to wherever employees are operating

Employee Productivity» Ensures IP PBX and handset functionality can be seamlessly utilised between sites so that

productivity gains are delivered across the business

Reducing Risk» By operating data circuits for voice traffic, the customer can provide greater resilience to

their voice services through the provision of overflow capacity on data circuits

SECTION 4: COST IN THE FIRST INSTANCE, BUT AGILITY IN THE LONG RUN

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VoIP will have a direct impact on costs for most organisations, especially those withdistributed offices, field and remote workers, and a wide network of suppliers andpartners, but that’s not the only reason to start thinking about using IP for voice calls.

First and foremost, it’s important to ensure that your organisation is ready to meet thechallenges of the present and the future. By untangling your infrastructure andfocusing your investment and expertise on a single IP network you can make yourorganisation flexible and responsive to the rapid change that characterises the 21stcentury economy. And, just as importantly, you can enable your people to becomemore flexible, and to change the way they work. It’s important that individualsrecognise the benefits of VoIP, and then put it to good use in their daily working lives;only then can you really make the most of the opportunity.

An IP network then gives you the ability to consolidate your voice applications and mergethem with more sophisticated methods of enabling your people to communicate with an IP based network. You can integrate voice with multimedia applications such as video conferencing which can support customer relationship solutions to make yourbusiness more responsive to immediate needs and long term trends. You can streamvideo, set up video conferencing very easily, and also use unified messaging solutions that enable your network to sense the presence of your people on the network. The latter application is one that’s getting a lot of attention at the moment. It’s sold on thepromise of making an organisation more transparent because, for instance, a manager in one site can immediately see who is available, regardless of location to engage the right resources on a call at short notice.

The network tells the manager that their colleague is available to talk and makes theconnection through the appropriate device with just a few clicks of a mouse. Presencemanagement solutions save time, make people more productive, and ensure thatcustomers get quick responses to their needs. Only an IP infrastructure can deliverthat kind of power.

For many, VoIP is the start of that journey – and it enables them to build an IPnetwork. It’s a journey that will benefit from careful planning. You need to thinkcarefully about your objectives, it’s also important to think about security. One of thebest ways to achieve all that is, of course, to use the experience of those who havedone it all before.

KEY POINTS:

» VoIP delivers the platform to integrate applications

» VoIP isn’t just about saving money

» Your people become more flexible and responsive to customers

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KEY POINTS:

» Enterprise VoIP is not Internet telephony

» It’s about QoS

» Plan your service carefully

VoIP is different to Internet telephony and whilst the general public have been makingthe most of Voice over the internet for quite some time through various brands likeSkype there’s a big difference in providing enterprise scale VoIP over a secure andspecially designed network and one that uses the public internet for conveniencewithout service guarantees.

Issues over the quality of calls, the integrity of the service, the robustness of eachconnection, and the need to secure each call as it goes in and out of yourorganisation have convinced the great majority of businesses to go for their own IPnetwork. It’s important to be in control, and to ensure that you get the best possibleservice for something as fundamental to your business as voice calls.

To deliver high quality real-time voice that doesn’t suffer from delay (the packets ofinformation getting held up out on the Internet) or jitter (when those delays vary) youneed to be able to guarantee Quality of Service. The public Internet treats a voicepacket the same way as any other, and so it might or might not get held up: any delayover 50 milliseconds means that your voice gets distorted, and longer delays makeconversation impossible.

If you have to compress all the traffic that’s using a data circuit then quality will becompromised, especially at busy times, which is when you need high voice quality themost! So, it’s important to ensure that you have multiple inbound and outboundchannels on the circuit that’s plugged into your PSTN. This is where it’s vital to choosethe right codec3 so that you can have the right bandwidth available at all times, andensure that however busy you get there’s enough flexibility in your solution to ensurethat each call is perfect.

3 A codec is a device or program capable of digitally encoding an analogue voice stream.

SECTION 5: WHY NOT JUST DO TELEPHONY OVER THE PUBLIC INTERNET?

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KEY POINTS:

» IP PBXs offer two protocols – SIP and H.323

» Either protocol will deliver the functionality for your VoIP solution

» Your PBX selection often drives the protocol needed

When you have decided to make the transition to IP, there are two protocols you willneed to choose between – SIP and H.323 - which will enable your VoIP calls to becarried across the PSTN. Ultimately your choice will often be a consequence of whichIP PBX you select.

SIP, or Session Initiation Protocol, is an open industry multi-media signalling standardthat enables carrier voice equipment to work with your organisation’s IP basednetwork. The protocol ensures that a logical voice channel is opened and that’s known

as a SIP trunk.

Using an IP network means you don’t need to have separate PSTN and data circuitson your premises, SIP supports a range of real-time communications like video,Instant Messaging, user-based presence applications, as well as voice.

Similarly, H.323 does the same job and is a standard set by the InternationalTelecommunications Union to govern multimedia communications over a LAN. H.323standards are helping traditional networks to offer new collaborative applications, andare the foundation for a range of audio and video codec’s that compress anddecompress media streams.

All very technical, but vital when you’re ensuring that your IP network actually deliverswhat it’s supposed to!

SECTION 6: A QUESTION OF PROTOCOLS

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KEY POINTS:

» Treat the security of VoIP the same as your data

» Optimise security settings to avoid loss of quality

» Choose the right partner to get the security levels correct

It can be. From the start it’s important to understand the vulnerabilities of VoIP, andthen to ensure that you work with a partner who can ensure the integrity of yourbusiness operation as you migrate to an IP network.

VoIP causes a problem: its packets of information are time critical. They have to arriveat the other end quickly and in the right order. They can’t be held up for long by afirewall, or scanned randomly, and then delivered seconds or even minutes later like anemail or a file. As we’ve seen, any delay of 50 milliseconds or more causes echoesand jitters and can make normal conversation impossible. That need for quicktransmission causes problems for security, and can make your network vulnerable.Other issues include ‘Denial of Service’ attacks, malicious re-routing of calls, toll fraud,ID spoofing and eavesdropping.

So, is it really secure? It is if you work with the right partners. You need to be able towork with a provider who has the network infrastructure that can guarantee securityacross its own network – one that isn’t as vulnerable to attack across the public Internet.

SECTION 7: IS VoIP SECURE?

SECTION 8: THE BIG CHOICES: REVOLUTION, EVOLUTION or MIGRATION?

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If you have not done so already, at some point in the very near future you’re going tohave to make a decision about VoIP and possibly, convergence. Do you resist the waveof enthusiasm for both, or do you embrace the future wholeheartedly? As we’vementioned, the choice doesn’t have to be one between doing nothing and rippingeverything you already own out and starting all over again: the market and the availableoptions are much more sophisticated than that.

What’s clear is that the initial hype has been replaced with a determination to makeorganisations more productive, flexible, and responsive to the needs of customers, andIP networks are a key aspect of that effort.

As an independent analyst, IDG, put it, “the effort which organisations are currentlyexpending on the transition to internet protocol voice will, in the long term, be rewardedwith lower infrastructure opex costs, reduced telephony tariffs and increased productivityfor their employees.” They found that almost three quarters of large organisations fullyexpect to migrate their voice networks to IP-based systems by the end of 2008.

Sooner or later, all equipment becomes unreliable and uneconomical to run and you’llhave to replace it with something.

So, you will have to make a decision at some point, and the best decisions are alwaystaken when you have the time and space to think and plan for the future.

Of course, doing nothing, for now, is an option. You’re existing voice and data networksseem to be working fine as they are, and the importance of your voice traffic is critical toyour business so why mess with it? By putting off the decision to converge yournetworks you might be able to benefit from future technological improvements that makethe whole process cheap and easy to implement. That might be the case, but you riskbeing left behind as your competition takes some hard decisions now and then reapsthe rewards of lower Capex and Opex costs, enabling them to deliver better value tocustomers – your customers!

If you want to use more remote or home workers then ensuring that they can have theflexibility and access they need to do their work will cost you more because you needto maintain or modify two networks rather than just one. The inherent flexibility of aconverged network means that you can develop the capabilities of your business andmake it more responsive quicker and for less expense.

And, as we pointed out before, your existing PBX technology will, at some point in thefuture, have to be replaced and the vast majority of new systems will have IP technologyat its heart. Doing nothing might be an option, but it certainly isn’t a cunning plan.

Instead of doing nothing you could do something – something piecemeal and migratetoward VoIP and convergence at a pace that suits you. You might focus your investmenton a new IP PBX and connect it to a TDM line to see how the technology works withinyour business and then wait to make the next move before you make a decision.

POSSIBLE CUSTOMER SCENARIOS

Business has… Business wants… Solution

Traditional TDM PBX » To move to IP when it suits them Traditional voice» To use existing TDM equipment, sweat the asset portfolio» Interoperability/ management with sites that have IP PBXs

End of life PBX » To upgrade their PBX functionality IP Voice Solutions» Clear ROI of upgrading VoIP Access» VoIP connectivity

New location » New LAN IP Voice Solutions» New PBX IP VPN» New VoIP access VoIP Access

Plans to purchase a » To consolidate Voice and Data over single WAN IP Voice Solutionsnew IP PBX » To benefit from network convergence and retire PSTN lines VoIP Access

» Interoperability/ management with sites that have IP PBXs

An existing IP PBX » To maximise the functionality of the IP PBX VoIP Access » To port some numbers» To pilot IP Access

A mixture of voice » A new IP PBX IP Voice Solutionsinfrastructure and » To benefit from network convergence and retire PSTN lines IP VPNnetworks » To simplify/converge their WAN/LAN VoIP Access

(potentially using the Internet option as a pilot)

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You could rely on pure internet telephony but it doesn’t bring the guarantee of qualityyou need to support your workers and your customers. As we’ve seen, VoIP using thepublic internet isn’t up to meeting the rigorous demands of the commercial world so whyrisk your productivity and reputation on the vagaries of contended internet channels.

COLT believes that it’s important to take into account all your needs and avoid anypiecemeal approach to either VoIP or convergence. By doing that you can be surethat you’ll make the most of the potential of the technology. Not that that means youhave to do everything all at once, COLT believes that there are three distinct stages toensuring that you make the most of the opportunity.

» First, you need to create a converged infrastructure through a single platform. That will serve to lower costs and VoIP Access assists in this stage.

» Second, you build an integrated suite of applications on that platform and use them to drive efficiencies and new capabilities into your business.

» Third, you use single devices that deliver a unified experience to all your people so that they are truly mobile and flexible.

So, the obvious conclusion is you need to take a decision now, or in the near future,about your infrastructure. And if you’re unsure about making the step to VoIP, we canwork with you to trial VoIP over existing data circuits – a fact that reassures many,removes the doubt and enables them to help justify the move to the management teamas well as the IT specialists.

KEY POINTS:

» VoIP is happening

» There are many ways to embrace VoIP without making big changes

» Take the time to explore all your options and develop a clear plan ofaction for embracing VoIP

SECTION 9: THE BIG CHOICES: REVOLUTION, EVOLUTION or MIGRATION? cont...

SECTION 9: OPENING UP THE FUTURE

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You won’t be surprised to learn that we believe COLT is best placed to deliver thebenefits of VoIP on the best possible terms. COLT VoIP Access will put a foundation inplace for you to build upon while achieving the necessary short term financial andoperational benefits.

The wider COLT IP product portfolio – IPVPN, VoIP Access and IP Voice Solutions –provide the flexibility to build the solution you need.

COLT wholly owns and manages a network infrastructure that spans most of Europe,reaching 13 countries, 32 cities and over 10,000 buildings, with high quality links tothe rest of the world. It’s a high-quality network that is constantly being improved,serviced, and monitored. You get stringent SLA’s that are supported by local staff whospeak your language and respond swiftly to any problems as soon as they arise.

We have built our reputation for customer service on our ability to work withcustomers to deliver real results based on their own, very specific objectives. Thatapproach has won us numerous customer service awards over the years – a trendthat keeps on going with many recent accolades such as Frost & Sullivan’s 2007Award for Best Customer Service.

The key to our reputation for customer service is the fact that we create partnershipsthat endure. They’re partnerships that are focused on the specific objectives of theenterprise, and enable us to create a carefully worked out plan that takes into account the unique needs of each customer as they migrate to a new world of communications.

So, we’re not just suppliers who deliver isolated elements that you then have to puttogether into a coherent whole: we deliver the coherence and certainty you need sothat you can successfully (and at your own pace) deliver on your objectives.

That might mean that we won’t advise you to get rid of your existing PSTN right awayso you can keep it going whilst you begin using IP telephony – or we might suggestpiloting VoIP on one site so that you can ease your organisation into the future. Or, ifwe believe you will benefit, we will suggest a complete migration of your wholeorganisation and then work with you to achieve it.

In short, we will work with you to review your current position, advise on what benefitswill be generated by moving to VoIP, then work out a strategic plan that will get youfrom here to there most efficiently.

ISSUES YOU NEED TO CONSIDER WHEN MIGRATING TO VoIP

» What IP PBX do you have and is it compatible with VoIP Access?

» Will you need H.323 or SIP protocol?

» Do you have an existing data network or one that will cope with voice?

» Do you want to put voice and data together?

» What is your overall bandwidth requirement?

» How much bandwidth do you need per channel?

» Will you need to port numbers?

» How much IP PBX programming will you need?

» How much TDM network will be cancelled?

» Have you already piloted the service?

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KEY POINTS:

» COLT manages its own network throughout Europe

» COLT is renowned for award winning customer services

» COLT works with you to deliver financial and operational benefitsthroughout the business

By working with COLT you won’t have to deal with a variety of vendors and theirdiffering SLAs, to ensure you get a consistent user experience across your network.

And we’ll also ensure that all your stakeholders get real benefits from the wholeprocess – the benefits the hype has told them will be delivered! That means a ChiefInformation Officer will see the benefits of investing in a single, convergedinfrastructure and be able to measure them clearly. They’ll be able to see thatcomplexity had been reduced and how a whole new portfolio of integratedapplications designed to make the enterprise more mobile and flexible can beintroduced seamlessly.

The Network Manager will discover that more can be done for less. It’s the Holy Grailof Network Managers everywhere. No longer will they have to juggle multiple budgetsthat are attached to a series of networks – now there’s one network on whicheverything can be done simply, and cost effectively. That means it becomes a realasset to the business rather than a hindrance.

And, of course, the end user will enjoy the benefits of a converged world as they dotheir work each and every day. They’ll find communicating with each other, and withthe outside world easier. They really will have the potential to have just one number onone device! They will be able to work wherever they happen to be via their phone andlaptops and have as much access as they need to business critical applications. VoIPis the start of the journey.

COLT’s focus is on taking the complexity out of communications and ensuring thatyour network infrastructure is a real benefit to your business.

SECTION 10: OPENING UP THE FUTURE cont...

Data Voice Managed Services© 2007 COLT Telecom Group Limited. The COLT logo and COLT pennants are trade marks. All rights reserved.

For further information on COLT VoIP Access,

visit www.colt.net