The View from Here: The Case Against VoIP

July 9, 2008

Like any new technology, VoIP attracts a lot of attention. It is pushed by vendors and other proponents as the key to the future, a way to simultaneously save money, add features and simplify operations. Indeed, all of these assets are real and quantifiable.

But VoIP isn’t for every organization.

Before seriously taking the plunge – and inviting a vendor, consultant or anyone else who will smell a payday in for a chat is close enough to taking the plunge for the purposes of this post – decision-makers and IT must look at a number of issues related to whether or not VoIP really is for them.

1. Those were the days. Things were quite different in the early days of VoIP. At that time, the equipment and services were not as reliable and robust as it is today, but far cheaper than the traditional phone services. The first reality that IT departments must make sure decision-markers understand is that the situation has flipped: The basic phone services offered by VoIP providers are nearly the equal of the traditional companies’. However, the price differential has largely disappeared.

Reality: Companies looking at VoIP primarily as a way to cut costs on voice services should be careful.

2. What lies beneath. Putting voice and data on the same network is a complex task. Before techs begin to unpack the routers, switches, gateways, IP PBXes and other widegets, the IT department must make sure that the underlying infrastructure is up to the task. If the network is not capable of supporting IP-based voice and data – in a way that gives the time-sensitive packets priority and does other things that actually makes the system work – the organization is courting trouble by going to VoIP.

Reality: The underlying plumbing counts. Organizations must do pre-deployment assessments, and those antiquated or inadequate infrastructure should not deploy VoIP. Upgrading substandard networks can wipe out any savings from VoIP.

3. Why does your company want VoIP? This, really, is the biggest issue. VoIP is an expensive undertaking. Even in the best of circumstances, some flies will find their way into the ointment and re-education of workers will be necessary. Those VoIP is glitzy and will provide some advantages to virtually any organization, there are those that truly can do without it.

Organizations best positioned to take advantage of VoIP and the multimedia applications that come with it are those with distributed work forces, including many branch and satellite offices, telecommuter and field personnel. The call of VoIP is especially strong if the organization benefits from tying together back end systems and serving up that data quickly.

Reality: There are many organizations that can get by quite nicely without VoIP. IT and finance should have a clear understanding of why VoIP is being deployed and a detailed and clear-eyed costs/benefits analysis should be performed.

VoIP is a great thing. But it isn’t a great thing for everybody, especially as traditional phone providers try to cut their losses by making their legacy services more attractive.

–Carl Weinschenk

Photograph courtesy of Emily Weinschenk.

Posted by Carl · Filed Under SaaS

Comments

6 Responses to “The View from Here: The Case Against VoIP”

Ken Krause on July 10th, 2008 3:00 pm

Carl, those are some great points to keep in mind. Some of the features are attractive — especially those in point #3 — but at what cost?

For smaller organizations, it hardly seems to make sense. Rather than paying for expensive equipment, they’d probably be better off with a hosted PBX system. (Full disclosure: We have a client, Protus, that offers such a system called my1voice, http://www.my1voice.com.)

Hosted PBX systems are great for distributed workforces because all the technology sits outside of the company walls. You can put everyone on the same number and give them individual extensions, even if they’re all over the country. They also offer the find me/follow me service that lets you set your extension to ring one phone at a time in a specified sequence, or ring all your phone numbers at once, so you’re always reachable. Just like VoIP, but without the hassles.

Larger companies probably need something more robust. But for companies of up to 20 or 25 people, hosted PBX systems are worth a look. They tend to be pretty cost-efficient too.
PhoneTool on July 12th, 2008 6:50 pm

Refreshing!

VoIP is happening but nowhere near the speed one would think from all the hype that surrounds it.

The biggest obstacle to it’s uptake is the word “Free.” It’s the only factoid that most commentators retain and sadly it’s true in only the most limited circumstances.
Considering The Case Against VOIP « Clearing My Head on July 13th, 2008 11:16 am

[...] over at The IT-Finance Connection has expressed an interesting perspective in a post entitled, “The View from Here: The Case Against VoIP.” It’s got a few people stirring. He cites posts from Ike Elliot, Garrett Smith & Jon [...]
Robert Wolpov on July 14th, 2008 11:24 am

(Full disclosure: My company, Junction Networks, is a business VoIP service provider to over 4,000 businesses.)

I agree with your approach to evaluating a technology investment; consider ROI, determine requirements, consider implementation risks and costs. It doesn’t just apply to VoIP.

Our experience tells us that VoIP is a clear choice in many scenarios including:

- new office space
- new data network
- establishment of second physical presence
- disaster recovery is a high priority
- PBX reaches end of life
- phones reach end of life

Yes, I agree that the underlying “plumbing” must be up to the task, If it isn’t, maybe it is time to update the plumbing for general purposes. A business with a poor data network or with antiquated connectivity today is missing out on far more than VoIP services. The productivity enhancements and cost savings available to a well connected enterprise are tremendous.

I would be interested to hear why an organization with reasonable infrastructure would NOT switch to VoIP given leading vendors have committed to migrating their products and services to VoIP and may discontinue older products.
VoIP Newsly, The place to be for VoIP and internet innovation on July 21st, 2008 10:30 am

[...] watcher Carl Weinschenk had a thought-provoking post on his IT-Finance Connection portal about “the case against VoIP”. That should get your attention, [...]
Steve Mol on September 24th, 2008 10:48 am

Very good article, Carl. Your point about VoIP being best suited for multi-site and/or telecommuting companies is exactly spot on.

We sell telephone systems that are hybrids of both VoIP and “legacy” digital and analog technology. We recommend VoIP for connecting satellite offices and/or telecommuters, and put in the appropriate cards IF those applications are involved.

For the vast majority of installations, the digital and analog extension cards are the best option and all that is required. The IT departments love the fact that we don’t use any internal bandwidth, and the additional cost per telephone for the wiring amounts to an average of $10 per phone - and that assumes the wiring isn’t already there in the first place.

This cost is more than offset by the decrease in costs for prioritizing data switches and bandwidth capacities.

For anyone considering buying a VoIP system, be sure to not only look at the cost of the telecommunications equipment “upgrade,” but also the cost differential for the IT equipment if a separate traditional telephone network is used. Be sure to have the IT and telephone vendors quote both ways. In most cases, the “savings” on telephone equipment is far outweighed by the incrased costs for the IT infrastructure.