Landline or Online

Is your business ready for VoIP?

1 | 2 NEXT

In the fall of 2005, Internet service went down at D.W. Morgan, a supply-chain and logistics company in Pleasanton, California. No big deal, right? Networking problems strike businesses all the time. But what for many businesses might have been an annoyance quickly became a crisis at D.W. Morgan. That's because the company had recently spent $55,000 installing a new phone system that transmitted voice calls over the Internet. No Internet service meant the phones wouldn't work. "In business, you're only as strong as the weakest link among all your vendors," says Grant Opperman, the company's president and chief strategy officer.

VoIP, or voice over Internet protocol, is one of the hottest trends in communications. According to the Yankee Group, some 8.5 million consumers have ditched their landlines, looking for lower bills and more flexible, customizable phone systems. But for a business, the road to reliable service with VoIP can be rocky, fraught with network outages, costly infrastructure upgrades, dubious call quality, and laborious project planning. "Voice is a finicky application to run over the network," says William A. Stofega, a research manager at the technology research firm IDC (NYSE:IDC). "If an e-mail arrives five minutes late, you don't usually know or care, but if there is any kind of voice delay, you know it."

Conventional phone systems transmit sound directly over the phone lines of telephone companies. Internet telephony converts a speaker's voice into small bits of data. Those data "packets" are pumped over the same data network that routes e-mail and webpages and are converted back to voice when they reach their destination. Companies such as Vonage (NYSE:VG) and Skype (NASDAQ:EBAY) offer Internet telephony to consumers and small businesses, while major corporate VoIP providers include Nortel (NYSE:NT) and Lucent (NYSE:ALU). Internet service providers, such as Verizon (NYSE:VZ) and AT&T (NYSE:T), provide the actual voice service that runs over the network.

D.W. Morgan, which seeks to provide clients with real-time information about the status of their supply chains, was eager to try the high-tech approach to phone calls. So back in 2004, when the company, which had just under 100 employees, moved to a new headquarters, it installed 25 Cisco Systems (NASDAQ:CSCO) IP phones with the help of a local firm specializing in IP communications. But before D.W. Morgan could make the most of the new technology, it had to work out a few kinks. For starters, there was a pronounced echo when there was heavy traffic over the voice or data network. "If someone was downloading a video or a few people were on a conference call, you'd start to get garbles and echoes," recalls David Morgan, the firm's CEO. To address the problem, a Cisco engineer reconfigured the T1 connection so that one circuit was dedicated entirely to voice traffic. The fix eliminated the echoes.

1 | 2 NEXT

Try a RISK-FREE Issue of Inc. Today!

Renew | Contact Us | Current Issue

Select Services