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Telecommunications: Can Cisco Answer the Call?
9/29/2004
Busy Signals
Still, Cisco and its rivals flunked early VoIP tests. Time and again, Chambers directed that his own office phone be replaced with a VoIP system. But his mandates to Cisco’s IT team went unfulfilled for several years due to hardware glitches, software bugs, wiring snafus, and the massive scope of Cisco’s own telephone network, which served 40,000 employees during the height of the dot-com boom. (The company now has about 35,000 employees.)VoIP also suffered disconnects outside of Cisco. Through the late 1990s, many corporate customers and universities balked at first-generation VoIP systems, because they lacked quality of service (QoS) features found in traditional phone systems. Many VoIP pilot tests were further delayed by the dotcom implosion, economic recession, and September 11 terror attacks. Skeptics said it was difficult to embrace VoIP—which typically costs $1,000 or more per user when deployed down to the desktop—without a proven track record for the technology.
“Not many people could justify an unproven phone system with so many economic and geopolitical unknowns clouding their financial vision,” recalls Jill Cherveny-Keough, director of academic computing at New York Institute of Technology, a college with campuses on Long Island and in Manhattan.
Even so, Chambers wasn’t ready to unplug Cisco’s VoIP push during the recession. While rivals such as Nortel Networks Inc. (www.nortelnetworks.com) and Lucent Technologies Inc. (www.lucent.com) stumbled with accounting scandals and a heavy dependence on the decimated telecom carrier market, Cisco calmly outspent its adversaries on research and development. Consider the scorecard: In its fiscal year 2002, Cisco pumped $3.3 billion into R&D, down a moderate 13 percent from 2001. In stark contrast, according to their companies’ annual reports, Nortel and Lucent spent $2.2 billion and $2.3 billion on R&D in 2002, down 31 percent and 34 percent, respectively, from 2001.
Before and during the economic slowdown, a few VoIP pilot programs from Cisco and other major vendors quietly took flight. The first wide-scale university deployment came in August 1999, when the University of Arkansas at Pine Bluff deployed a $4 million converged network using Cisco’s CallManager gear. Dozens of similar Cisco and rival rollouts followed. By 2002, the University of Guelph (ON) was the first in Canada to implement a fully converged IP network.
| Five Reasons to Worry |
| Before signing on the dotted line,
make sure your proposed VoIP system d'esn’t suffer from these shortfalls: 1. Lack of 911 accessibility 2. No “switched-loop attendant” console 3. No “blind transfer” call-forwarding features 4. Limited analog ports for modems, credit-card machines, etc. 5. Limited conferencing features Source: Gartner Inc. |
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