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Commentary: Internet calling verges on mainstream

VoIP is racing toward mainstream acceptance, steered by attractive price points, cost savings and significant improvements in voice quality and reliability, according to Forrester Research.

Commentary: Internet calling verges on mainstream
By Forrester Research
Special to CNET
November 18, 2003, 3:00PM PT

By Vijay K. Bhagavath, analyst, Forrester Research

Voice over Internet Protocol (VoIP) is racing toward mainstream acceptance, steered by attractive price points--currently $200 to $500 per line--proven cost savings in early-adopter deployments and significant improvements in voice quality and reliability.

Early adopters with whom we spoke--financial services, health care providers and technology firms--are benefiting from VoIP-enabled technologies that simplify work flow in customer service and sales departments. These "presence powered" solutions are the result of the fusion of VoIP, instant messaging, presence awareness, conferencing and collaboration capabilities.

Presence-powered communication is real-time interaction on a VoIP network among willing participants who are contacted via their choice of device or application type.

Solutions built with presence-powered communications will enable firms to:

• Find people when needed. While Microsoft's Office Live Communications Server 2003 and IBM's Lotus Sametime offer IM presence, products such as Siemens OpenScape extend presence to the user and group levels, making it possible for people to instantly locate individuals or members of a group. The result? Employees can engage in more natural ad hoc interactions with colleagues who are available, and they can opt in via their choice of device--phone, PC or personal digital assistant.


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Interact in real time. Forrester expects these solutions to gain traction in the 2004 to 2007 time frame, with steadily increasing growth in VoIP adoption. Firms will be attracted to presence-powered communications solutions due to their convenience and potential business benefits. For example, employees can initiate instant team interactions by simply clicking on user names or project name tabs from within PC-based applications, accelerating business decisions and saving precious time otherwise spent setting up and rescheduling audio conference bridges and WebEx Communications sessions.

• Shrink communications costs. Large firms can save thousands of dollars by deploying desktop presence-powered communications solutions instead of sticking to pricey alternatives such as conferencing services. Forrester's cost model for a 10,000-employee firm indicates an annual savings of 38 percent in conferencing costs by switching to a VoIP-based desktop-conferencing solution.

To capitalize on the benefits of presence-powered communications, information technology and business executives should jointly assess the portfolio of commercially available presence-powered communications solutions. This can be accomplished using metrics such as cost, expected return on investment, time taken to set up conference calls and the average number of attempts needed to reach internal staff via the phone. Early solutions offer:

• Instant conferencing and collaboration. Siemens recently announced OpenScape, a presence-aware instant-conferencing and collaboration solution to free users from the ardor of setting up collaborative interactions. Microsoft and IBM offer presence-powered team collaboration solutions as well--Office Live Meeting and Lotus Workplace, respectively. IT should engage integrators like Wipro or Hewlett-Packard to implement security and access controls into these solutions and integrate them into their PC-based applications, mobile devices and management systems.

• Presence-powered telephony. Presence takes the guesswork out of contacting people, which results in fewer voicemails and missed calls. Several software boutiques are working in partnership with VoIP incumbents such as Avaya and Siemens to offer click-to-call plug-ins for PC-based applications and mobile devices. Presence-powered telephony means that a U.S. technical support representative can call a developer in India by clicking on the "dev team" tab to get immediate answers to a customer query.

• Voice-enabled customer relationship management (CRM). The integration of VoIP and presence with CRM adds context, a feature currently available only in call centers, to mainstream business communications. Start-ups are offering voice-enabled CRM solutions to provide customer service or sales staff with a call center experience at mainstream price points. An incoming call triggers a CRM query to display a screen pop-up with background information about the caller. Forrester expects several VoIP vendors to offer voice-enabled CRM by 2004.

Forrester anticipates that three groups of early adopters will be among the first to accrue the benefits of deploying presence-powered communications built on a VoIP network:

• Financial services firms will profit from instant conferencing. Portfolio managers can use instant conferencing to hold an unscheduled conference call with available asset managers and completely pull out of a tumbling stock. Credit union branch officers can rapidly confer with available senior managers at headquarters to seek their second opinions on a mortgage approval, a process that takes a few minutes--often with the customer live and on hold--instead of days.

• Physicians will get quick second opinions via ad hoc team collaboration. Health care professionals will find it valuable to use instant-collaboration solutions to get immediate opinions from available experts on medical images or diagnostic procedures--while simultaneously conversing with them. Hospital systems currently rolling out Wi-Fi handheld devices can readily extend the capabilities of presence-powered communications to enable hard-to-reach staff like nurses to be accessible via presence tabs like "internal medicine nurse staff."

• Technical support will reach out to experts via presence-aware telephony. Field sales and customer service representatives in high-tech vendor firms also stand to benefit from group presence features integrated into their PC-based applications. Customer queries requiring subject matter expertise, currently handled via annoying customer callbacks, can be more expeditiously handled when a customer representative confers with one or more available internal experts by clicking on presence tabs like "product marketing" or "system test."

Presence-powered communications are new technologies that carry risks firms must evaluate when deciding whether these technologies are right for them. What's important?

• Security. Presence-powered communications solutions being implemented over Windows platforms fit cleanly into the existing enterprise security framework. IT should provide users with simple Web-based presence management tools to specify a list of individuals or teams who can see their presence and initiate impromptu interactions based on constraints like employee level, job function or time of day.

• Reliability. The reliability risks can be addressed through architectural means--such as server redundancy and load balancing. IT should work with disaster planning shops like SunGard to plan for various disaster recovery scenarios and incorporate failover to overlay legacy communications systems in the event of an outage.

• Scalability. Microsoft and Reuters are among the largest deployers of presence-powered VoIP solutions based on Microsoft's Office Live Communications Server 2003. IT organizations can design distributed VoIP and presence server clusters using existing best practices like Microsoft's forest approach to constructing scalable server clusters with failover provisions. Microsoft recommends running Windows-based presence servers at 75 percent of their capacity--or up to 7,500 users per server--to ensure allowance for message overflows.

© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.