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Big Blue dials into IP phones

The tech giant teams with networking companies Cisco and Avaya to sell and manage telephone systems that use the Internet instead of traditional phone lines.

IBM on Wednesday said it is partnering with Cisco Systems and Avaya to sell and manage telephone systems that use the Internet instead of traditional phone lines.

The partnership offers customers a choice of IP (Internet Protocol) telephone gear from Cisco and Avaya, which will be installed and managed by Big Blue. The companies have already begun jointly selling the services and equipment.

The deal marks IBM's first move into the corporate market for so-called IP telephony, where Electronic Data Systems, Hewlett-Packard and other companies have already staked their claims. Yves Lozach, director of networking services at the Armonk, N.Y.-based tech giant, said the partnership's gear and services are targeted at medium-to-large businesses.

"Voice is becoming an application on a data network," Lozach said of IBM's decision to enter the market. "And applications on a data network is our core business."

IP telephones use the Internet instead of traditional phone lines to exchange voice calls, faxes or pager messages. A dialer avoids paying long-distance charges, because the calls don't travel along a phone company's network of copper telephone wires.

But the equipment is still in its earliest generations, so it is expensive and prone to bugs, says Norm Bogen, a networking industry analyst at Cahners In-Stat Group. So far, two markets have developed for the services: consumers who buy monthly airtime and corporations merging their phone and office computer networks.

Lozach said initially, potential corporate customers are being quoted a price of $600 per phone line for IBM installation and management plus the

Bogen said IBM can use its nearly 20 percent share of the office network installation and management services market to take on incumbent IP telephony providers.

Under the joint sales push, customers will buy IP telephone gear from Cisco, Avaya or other hardware makers, then install and manage the networks themselves, according to Greg Sloan, vice president of global alliances at Avaya.

IBM can take over the management duties, which takes the strain off information technology departments, who would have to retrain their staff or hire outside help, Bogen said.

"When you start touching the IP infrastructure, it's becomes very difficult to do," Sloan said. "IBM's recognizing a market need for management."