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Voice-over-data network gear ahead of business demand

Every major networking firm is rushing to bring voice capabilities to its Internet-based data equipment, but most businesses say they're leery of LAN installation.

Every major networking firm is rushing to bring voice capabilities to its Internet-based data equipment, but most businesses say they're leery of installing the technology in their local area networks, a new study shows.

When asked about their plans for the next year, some 56 percent of businesses, large and small, say they don't plan to use "converged" products on their LANs because they don't trust the technology, according to the report by Infonetics Research. That figure is up from 49 percent six months ago.

The problem lies in the fact that the technology, capable of sending voice traffic across a data network, is still seen as new and untested, said Infonetics analyst Mike McConnell. "The market is definitely skeptical because the technology needs to be reliable."

Businesses fear that cost savings touted by vendors could be nullified by lost business if voice services go down, McConnell said. "One insurance company I talked to sums it up. He said... 'It could cost us a million dollars plus my job.'"

The integration of voice capabilities into data gear based on Internet protocol (IP) is expected to be one of the most hotly contested--and hotly debated--niches in networking over the next few years. But manufacturers' push seems to be outstripping demand.

Companies are used to having their office computers crash, but it's not acceptable for the phone network, McConnell pointed out. "When you pick up the phone, you expect a dial tone."

McConnell said he anticipates it will take three to four years for businesses to feel the technology is reliable enough to use it on the LAN.

The study, based on a survey of 225 small, medium, and large companies, also found that 40 percent of businesses plan to adopt so-called gigabit Ethernet technology to their networks by November 2000, up from 24 percent six months ago.

The report further found that more businesses will move to "Layer 3" switches, or switches that also have routing capabilities. Some 81 percent of firms say they will install the more powerful network devices, compared with 59 percent who said they would do so six months ago.

Usage for both products will jump because their prices are declining, McConnell said. For example, gigabit Ethernet switches used to cost between $1,600 to $2,000 per port six months ago. Costs have now fallen to about $1,200 per port, he said.

The technological barriers to using gigabit Ethernet switches have also been lowered, as it's now possible to use the copper wiring employed by most business networks.