Ringing In The New Year With VoIP

"We're looking at a three-fold increase in growth just on our VoIP business next year," said Doug Bowlds, vice president at AAC Associates, a Cisco Systems partner in Vienna, Va., whose IP communications division represents about one-quarter of its $15 million in revenue.

AAC Associates has seen widespread acceptance of VoIP among its education, local and federal government customers, Bowlds said. "We have a whole lot more success stories to point to." Growing interest in applications that add video to converged networks is also driving sales of IP telephony to customers that previously wouldn't consider moving to VoIP, Bowlds said.

"Video is helping us extend it to other areas. For example, police [departments] typically have stayed away from VoIP, but once we start showing what they can do [when we add] IP video surveillance, they start getting really interested," he said.

Bowlds said his biggest challenge for 2005 will be finding enough VoIP engineers to fill the open spots on his growing staff. He currently has 15 VoIP-specialized engineers and is looking to add 10 more during the next 12 months.

"You can't put an ad in the paper to hire a VoIP engineer. We'll be doing a lot of in-house training," he said.

While some solution providers see 2005 as a year to bulk up their IP telephony practices, others plan to jump into the market for the first time. "We probably will be investing this year to get involved [in VoIP], adding people, getting people cross-trained," said Steve Thorpe, president of Adaptive Communications, a solution provider in Portsmouth, N.H.

Thorpe estimates Adaptive Communications will have to spend $250,000 to ramp up an IP telephony practice for sales opportunities he expects to see in the next two to three years.

"There has been a lot of industry buzz over VoIP in the last couple of years, but now we see our customer base getting ready to take advantage of the technology," Thorpe said, adding that VoIP would complement his current security focus.

Adaptive Communications has been talking with vendor partner Nortel Networks for 18 months about jumping into IP communications and will move ahead with Nortel when the time is right, he said. In addition to security, another technology that complements IP telephony sales is wireless, said John Freres, president of Meridian IT Solutions, a Cisco partner in Schaumburg, Ill., that expects the volume of its VoIP sales opportunities to double in 2005.

"The whole concept of mobility is absolutely becoming pervasive in accounts," Freres said. "Customers are starting to leverage their networks to get greater productivity," he said.

VoWLAN remains a niche technology today, but more customers will adopt it in 2005, Freres said. Research shows that VoWLAN deployments are on the rise. The VoWLAN phone market for the first three quarters of 2004 climbed to $37.9 million, up from $19.9 million in the first three quarters of 2003, according to Synergy Research Group.

"It's going to be as mainstream in our accounts as wireless has been," Freres said. "Once you get a few people using it, it becomes a huge productivity tool," he said, noting that his own company uses VoWLAN technology internally to showcase its possibilities for customers.

While many customers are keen on VoIP's promised productivity gains, for others the most compelling argument for the technology still is old-fashioned cost-savings, said Scott Klemm, vice president of operations at Distributed Computing Inc. (DCI), an Avaya partner in Baltimore.

One DCI education client in Pennsylvania, for example, shaved $12,000 per month off its telecommunications bill by moving over its 30 office employees and 100 field employees to a VoIP system, Klemm said.

"It was costing them $150 to $300 per month per employee in the field," he said.

Even customers that aren't candidates to deploy IP telephony now are buying VoIP-capable phone systems for the future, Klemm said.

"Only about 20 percent of customers say they don't need it at all. It probably was the exact opposite a year ago," he said.