The promise of integrated communications - BT

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The promise of integrated communications - BT

BUSINESS BRIEFING

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The promise of

integrated communications

Constant presence, continuous collaboration

No. 50


BUSINESS BRIEFING

EDITORIAL

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INTEGRATED COMMUNICATIONS

The promise of integrated

communications

B4 FROM VISION TO REALITY

The convergence of telecoms and IT is coming at last. The implications will

be profound for all operators and all customers. By Andrew Lawrence

B6 THE UNIFIED FOUNDATIONS

Unified does not mean simple. The technical foundations of the integrated

IP network are proving complex and expensive. By Andrew Lawrence

B10 FASTER, SMARTER, CHEAPER

Enormous efficiencies can be achieved by merging voice and data networks.

By Kate Adair

B12 LIFE AFTER POTS

The business of charging per minute to connect two telephones across a

network is dying, so telcos are planning to drive revenues from new services.

Plus: BT’s £10 billion national communications network. By Phil Jones

B16 POWERFUL CONNECTIONS

Applications on unified networks are able to exploit video, voice and data.

Businesses that use them can become far more productive. By Pete Swabey

B19 A WORLD UNWIRED

Technical and business barriers must be overcome before businesses can

benefit from fixed line and wireless convergence. By Tim Bradshaw

B22 VOICING CONCERNS

The business benefits are many – but first, the converged IP network

must be made secure and resilient. By Abi Carter

B25 HELPING HANDS

A range of companies are clamouring to help manage integrated

communications platforms. By Gareth Morgan

www.infoconomy.com

CONTENTS

INFORMATIONAGE BUSINESS BRIEFING 2005 B3


INTEGRATED COMMUNICATIONS

OVERVIEW

From vision to reality

The convergence of telecoms and IT is coming at

last. The implications will be profound for all

operators and all customers.

The computing and the telecommunications

industries have been talking about their

imminent marriage for a long, long time. But

somehow, the dream has never quite been realised.

The two worlds of two-way, real-time voice calls on

the one hand, and information processing and

management on the other, have become tangled but

have never quite merged.

That continued separation – in technologies,

vocabulary, business models – has cost the IT business

consumer dearly. Fixed voice calls, mobile calls, emails,

video links, broadcast – all these communications

channels remain essentially separate. Coupled with the

fact that IT applications themselves are usually less

integrated than they could be, and it is no surprise that

electronic communication has become dysfunctional.

“Communications, sometimes referred to as ‘the

great liberator of our age’, is gradually turning it into an

era of inefficiency,” said communications consultancy

Xierus in a recent report, The era of over communications.

Many of the gains resulting from increased function

and mobility are being lost because users are distracted

and overwhelmed by the need to mentally integrate

overlapping and competing systems.

Until now, no amount of preaching, forecasting or

B4 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

investment has been enough to force the issue of

convergence. Computer companies have bought

telecoms companies, telecoms companies have bought

computer makers, and services companies from both

camps have attempted to bridge the divide with

creative programming.

Many have produced innovative technologies, and

some customers have implemented them, but none

has managed to deliver to its customers or its

shareholders the kind of compelling advances that

convergence has always promised.

Instead, the two industries have developed

alongside each other: IT has become ubiquitous, with

intelligence and processing power distributed around

the globe and across the Internet; voice and video

communications, meanwhile, have advanced at the

same furious pace, but their circuits, mobile or fixed,

have been largely closed off to the powerful,

sometimes anarchic, but clearly liberating world of

open, digital computing.

REVOLUTION

Over the next five to 10 years, all that is set to change

dramatically and irrevocably. The worlds of computing

and telecommunications – and that ultimately includes

mobile and broadcasting too – will all move onto one

common, open and programmable infrastructure.

While there will continue to be a patchwork of

underlying transport mechanisms, all the services that

run across these networks will be based on standard,

manageable packets of information using the Internet

protocol (IP).

Above this, new standard sets, such as the SIP

(session initiation protocol) and IMS (IP multimedia

subsystem) will enable all IT companies – from both

sides of the old computing/telecoms divide – to build,

distribute and manage a wide range of integrated

services that work smoothly together.

Some of the implications of this can already be seen

in the kind of services that the Internet and IP-based

communications of 2005 are able to offer. But far

greater, more profound implications are to come.

“This is not about voice over the Internet, or about

replacing PBX [private telephone exchanges]. This is

about a phased migration from one world to another,”

says Steve Masters, general manager, IP Infrastructure,

for BT Global Services, which has a huge commitment

to this new order. “The implications will be profound.

Everything will be more efficient and cost effective.”

“In terms of this being an important development to

the enterprise, I think this is actually being underplayed

at the moment,” says Jerry Caron, principle telecoms

analyst with research company Current Analysis. Apart


from the opportunities to cut costs through

integrating services, a swathe of new applications and

services, empowered with voice, video and presence

technology, will soon appear (see table, Converged

communications).

All of these will ultimately be based on a new, unified

communications base, provided by service providers

and sometimes, but perhaps less and less, built inhouse

on standard components.

The goal of the providers, says Neil Sutton, general

manager, IT Services for BT, will be to build and offer

near ubiquitous networks that are always available, are

high bandwidth, secure, cost effective and

manageable, and are layered with services – such as the

ability to sense ‘presence’. Their ease of use and

openness will belie their underlying complexity.

Analysts agree that, this time, convergence is no

false start. Major telecoms companies around the

world are taking risky and irrevocable steps, rebuilding

their infrastructure and business models, and

broadcasters are preparing to do the same. In the UK,

BT’s £10 billion investment in its new IP-based 21 st

century network (21CN) is an example of the scale of

the changes being made (see page 14).

“Part of 21CN is a realisation that 15 years from now,

BT will not be a carrier. It will be an application

integrator,” says Caron. BT is ahead, but all providers

will have to make similar commitments or establish

their strategy, he says.

Kai-Uwe Ricke, CEO of German operator Deutsche

Telekom (DT), is certainly thinking along the same

lines, as are all of the former national telcos (see page

12). “It is the services surrounding the provision of

telephone calls, such as billing and service level

guarantees, that will bring these companies their

revenue, not selling telephone call minutes.”

For the mobile service providers, the implications

are equally profound. Although at present they are

wedded to a business model based on minutes of

connection time, several are preparing to put in the

infrastructure to offer advanced, integrated services –

including, eventually, voice-over-IP (VoIP). Others are

examining the implications.

The world will move to IMS,” says Paul

Mankiewich, chief technology officer for mobility at

Bell Labs, the research arm of telecoms equipment

provider Lucent Technologies, referring to the open, IP

multimedia system that will enable operators to deliver

integrated IP services over their networks.

A recent report by Analysys, a telecoms consultancy,

concluded that most mobile operators will install an

IMS within five years. “And our advice to them is to

move to SIP as fast as you can,” says Mankiewich. SIP

www.infoconomy.com

INTEGRATED COMMUNICATIONS

OVERVIEW

CONVERGED COMMUNICATIONS: THE NEW OPPORTUNITIES

UNIFIED MATURITY MATURITY VALUE TO

APPLICATION FIXED MOBILE BUSINESS

Voice over IP ★★★ ★ £££££

Ad hoc video/audio conferencing ★ ★ £££

Video on demand ★★ ★ ££

Push to talk ★ ★ ££

Embedded voice in applications ★★ ★ ££££

Video telephone ★ ★★ ££

Unified messaging ★★ ★ £££

Embedded video in applications ★ ★ £££

Wireless-fixed roaming ★ ★ ££

Selection of best connection ★ ★ ££

Presence and device awareness ★★ ★ £££

Instant message/presence ★★★ ★ ££

Digital management of audio

(store, analyse etc)

★★★ ★★ ££££

Digital management of video

(store, analyse etc)

★ ★ ££

Ubiquitous web/application access ★★★ ★★ ££££

IP centrex (call management) ★★★ ★ £££

★ Test, early pilot ★★★★★ Established in market

gives the system the ability to sense a user’s ‘presence’

on the network and to tailor services according to the

device they are using.

For the enterprise customer, the choices are no less

important. Tactical implementations to install VoIP, for

example, may fail to adequately support more

advanced collaborative applications. “It is important to

have a roadmap, a cunning plan,” says Sutton. BT itself

advocates a strategy that moves from consolidation (of

both equipment and services), through convergence,

and finally to new, extended applications. In each case,

it argues, there is a clear financial case for investing.

Gartner, the IT advisory company, has warned that

the convergence of email, instant messaging, and fixed

and mobile voice services will overwhelm CIOs that do

not plan for this change: “We’re talking about a

complete change in role; businesses are going to need

a communications czar or some kind of chief process

officer to manage this,” Neil Rickard told a recent

Gartner Symposium.

This may be the most important first step. The

changes in the next ten years may prove as disruptive

as the Internet has in the past ten.

Article by Andrew Lawrence

alawrence@infoconomy.com

INFORMATIONAGE BUSINESS BRIEFING 2005 B5


INTEGRATED COMMUNICATIONS

INFRASTRUCTURE

The unified foundations

Unified does not mean simple. The technical

foundations of the integrated IP network are

proving complex and expensive.

For most CIOs (chief information officers), the

goal of putting all their organisation’s

applications, including voice and video, onto one big,

simple and intelligent Internet protocol (IP)

backbone is a top priority. Many have already done

so, and, according to Forrester Research, an IT

advisory company, about one-third of all

organisations will have a unified IP network by 2010.

This rush to convergence is understandable. Many

businesses, notes a recent report from Bearing Point,

an analyst firm, currently have a patchwork of

networks that are “cobbled together, often resulting in

inefficiencies, high costs, inadequate disaster recovery

and an inability to deliver new bandwidth-intensive

applications”. Even if the economic arguments were

not so overwhelmingly in favour of standardising on

one network, the technical ones – in terms of

manageability and ease of use – would be.

But there are some big riders to this otherwise

simple proposition. Building a successful, unified

infrastructure, it turns out, is a far more complicated,

Going mobile

EVENTUALLY, local area and wide area wireless

networks will link seamlessly into fixed networks –

with handover of services and billing occurring quietly

in the background. Building out IP networks

into the wireless world, however, is a difficult technical

challenge that is further complicated by intense

competition and by regulatory pressures.

The development of SIP and IMS technology will

provide mobile operators with a technical platform

to deliver presence and device ‘awareness’ to IPbased

networks, enabling application layer convergence

of the mobile and fixed communications

worlds. “Once you have a SIP-enabled phone, you

won’t even know you are on an IP network,” says

Paul Mankiewich, chief technology officer of mobility

for Lucent’s Bell Laboratories.

Rolling out the technology, say analysts, will take

five to 10 years. At this point, services such as

mobile VoIP, push-to-talk, and ad hoc voice and

video conferencing should all become available.

But one big question remains: how will the

B6 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

and longer-term, project than many managers are

anticipating. Most of the big projects publicised today

are still in their early stages.

BASIC BEGINNINGS

First, the assertion that full convergence is happening

today needs clarification. Sometimes, the IP backbone

covers only certain applications or geographies, and

none so far reaches effectively into the all important

area of mobile applications (see box, Going mobile).

Second, many integrated networks have not been

designed to support the requirements of the truly

unified networks that will emerge over the next several

years. At the very least, networks will be required to

support low latency applications such as voice, high

bandwidth applications, such as video streaming, and

resource hungry applications, such as transaction

management. They must also be able to differentiate

between applications so that their performance can be

protected if necessary. Furthermore, few networks

have been modelled to anticipate how usage patterns

might change once modern, converged applications

are installed – and how these applications affect each

other. Many businesses, having switched to IP-only

networks, have encountered performance problems.

A third issue is that converging different core

services onto the backbone, and even adding in

mobile network operators support the all important

real-time voice packets? At present, 3G cellular networks

have too much latency to support VoIP.

The solution will come in the form of 3.5G –

HSDPA (high-speed downlink packet access). Initial

services are likely to run at about 3.4 megabits per

second (Mbits/s), but this will rapidly increase.

Equipment manufacturers believe they can reach

speeds of 100 Mbits/s. According to Mankiewich,

Bell Labs has conducted trials where it has been able

to get better voice perfomance using VoIP than

using circuit switched technology and GSM phones.

WiMax networks offer another wireless alternative.

By 2007/8, WiMax networks covering a radius

of some 4-6 kilometres should be widely available.

With connectivity of between 0.5 Mbits/s and 75

Mbits/s, and little latency, they will be able to comfortably

support VoIP.

The technology for the truly converged network

is, therefore, in place. The major concern for operators

is how they transform their business models.


The vision… and the reality

VISION

The network will be unified in every

sense: for the user, the handover from a cellular service

to a WiFi service or an ethernet connection will be

seamless, whether the application is voice or data. All

services and all users will be accessible from anywhere,

one directory will serve all services, and communications

between devices will intelligently sense

formats and the context in which the service is being

sent. For CIOS, it will be possible to manage this

whole network with one set of tools and one set of

service level agreements.

advanced features such as ‘presence’, using the session

initiation protocol (SIP), is of limited value without

upgrading, extending and even rethinking the array of

applications and processes that will exploit the

technology. “If you see this is a way of ripping out costs,

you’ve missed the point of convergence,” says John

Wright, general manager, Mobility, BT Retail.

In most cases, enhancements will be handled by the

major application providers, such as SAP and

Microsoft; but in other areas, extensive upgrading and

re-engineering will be necessary. A centralised

platform to deliver services may be required.

Leading operators and equipment providers are

aware of all of these issues, and are designing

networks that are ‘application aware’. These vary in

sophistication, in their adoption levels and in their

‘openness’. But none of these technologies are yet

used on the ‘open’ Internet, so quality of service of,

for example, voice over IP (VoIP), cannot be

guaranteed unless it is supported from end-to-end by

a network operator.

NEW STANDARDS

One widely adopted standard for improving quality is

MPLS – multi-protocol label switching. This method,

now widely supported by equipment makers, involves

identifying the source of IP packets and attaching a

label to them according to agreed priorities. From then

on, all routers and switches on the network can

prioritise the traffic.

In June this year, Cisco, the leading provider of IP

telecoms equipment, introduced a more advanced set

of products as part of its AON (application-oriented

networking) architecture. This involves installing

devices on a network (or upgrading some existing

www.infoconomy.com

INTEGRATED COMMUNICATIONS

INFRASTRUCTURE

REALITY

Most user organisations do not yet have unified networks

and VoIP, the first big converged application,

has only just reached maturity. Public telephone

networks have yet to switch over from old style circuit

connections, and mobile services lack bandwidth

and full IP support. Most enterprise applications

do not yet exploit convergence, and most

installed networks do not yet use all the management

functions becoming available. Convergence for

most is five or ten years away, but early adopters are

already seeing benefits.

routers) that are capable of rapidly reading and

understanding the context of the messages. For

example, it might be able to differentiate between a

purchase order and an invoice.

Nick Earle, vice president of marketing, planning and

operations for Cisco, EMEA, says the innovation will

have an “impact on enterprise IT architecture as

profound as the migration from mainframe to

client/server in the 1980s”.

Many service operators and system integrators also

address the potential application performance issues.

BT, for example, takes a thorough, services-oriented

approach based on taking a centralised view of the

entire unified network. Its application assured

infrastructure (AAI) involves analysing network

requirements in advance, building performance

models, and then implementing a converged network

based on technology from a number of vendors.

IT analyst company Gartner says that service

providers could soon be delivering application-level

guarantees to more than one-third of their clients. But

their challenge, it says, is to turn project work into a

regular service.

Perhaps the biggest infrastructure challenge,

however, is architectural. How are these new, unified

IP-based services and applications to be delivered and

integrated – and how is it be done rapidly, flexibly and

cost effectively?

The telecoms companies, both mobile and fixed,

have the answer, in the form of the IP multimedia

subsystem (IMS), which will ultimately work on top of

a pure IP infrastructure. IMS is an open platform based

on SIP and enables the service providers to develop,

deliver and manage IP-based services that are end-user

and device aware. To those with an enterprise IT

continues >>

INFORMATIONAGE BUSINESS BRIEFING 2005 B7


INTEGRATED COMMUNICATIONS

INFRASTRUCTURE

Unification building blocks

background, it is analogous to the way that web

services orchestration platforms can be used to deliver

plug in services for the service-oriented architecture.

The IMS is capable of supporting a large number of

add-on services, and will be able to manage important

functions such as security, identity management and

billing. For this reason, the service operators see it as

vital – if expensive. Forrester Research recently said

that IMS systems could cost operators hundreds of

millions of dollars each to build.

Analysys, a telecoms research company, recently

forecast that all the major mobile operators would

deploy IMS systems within five years – even though it

warned that these systems are expensive and risky.

Although IMS platforms were originated by mobile

operators, however, they are likely to be more widely

adopted, with major fixed-line operators also seeing

this as a way to gain a competitive edge over rivals. By

IMS (OR IPMS): The IP multimedia subsystem is a standardised architecture that

specifies how network operators can provide converged multimedia services

regardless of access technology, wired or wireless. Applications include pushto-talk,

videoconferencing and content sharing. The advantages for operators

include faster launches for new services and a central repository of user data.

IP: As communications mechanisms and access technologies converge upon

the Internet protocol, truly unified communications become possible, with all

voice and data carried over the same network.

SIP: The session initation protocol is the control mechanism at the heart of any

converged network and device. Connection addresses can be associated with

people rather than their communications mechanism, thus allowing one number

for all devices. SIP provides ‘presence’ awareness.

HSDPA: Also known as ‘3.5G’, high-speed downlink packet access is a mobile

data service capable of transfers as speeds of up to 10 Mbit per second. This

will enable it to support IP multimedia services. Mobile operators plan to

deploy HSDPA in 2005-6.

AON: Application-oriented networking devices from vendors such as Cisco and

3Com intelligently process XML and other messages to help tune the IT infrastructure

for a service-oriented architecture, application acceleration, quality

of service and integration.

MPLS: Multiprotocol label switching is a data-carrying mechanism, designed to

unite traditional circuit-switched and new packet-switched networks. It also

prioritises the transmission of data packets depending on their needs.

3G: Third-generation mobile data services technology brings faster transmission

speeds to phones and laptops than exsiting GPRS systems and enables video

calling and other real-time data intensive services.

WIMAX: A wide-area (4-6 kilometres) wireless broadband technology, initially

used by service providers for backhaul. When the latest 802.16e standard is

ratified, it will be used by individuals’ mobile devices in much the same way as

WiFi networks are now. Trial services are already underway.

B8 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

installing a good IMS, operators will be able to deliver

a richer variety of services to their customers, often

more quickly and more flexibly than those using

alternative approaches.

This raises the question: Will IMS also be important

to enterprise customers? “We think so. But it probably

won’t be called IMS,” says Jerry Caron, an analyst with

Current Analysis, who foresees the development of

similar tools for use by enterprises.

Using the IMS model, he says, it will be possible for

enterprises to build a framework for cost effectively

delivering IP services, such as VoIP, video-enabled

applications and ‘presence’. These networks will be

able to link seamlessly into external networks, so in this

way, some business will be able to become their own

carriers – at least for part of the network.

APPLICATION PLATFORM

One of the benefits of SIP and the IMS model is that it

should prove flexible enough for operators (and

enterprises) to add in new application functions – even

those have yet to be invented or articulated. IMS has

been compared to enterprise resource planning (ERP)

systems, in that it could support a huge range of

corporate applications.

One example is the use of context and profile data,

which is not yet supported by SIP and IMS . “There is a

third leg (after signalling and traffic bearing) that’s

coming into telecommunications – a hidden

revolution, and that is context data,” says Rick Hull,

head of network data and service research for Bell

Labs, now part of Lucent Technologies.

Context may involve, for example, giving the

messaging service information on user context as well

as explicit preferences, possibly by profiling recent

phone calls and analysing the user’s relationships and

history. Without this, the new infrastructure could add

more complexity, rather than make it easier to use.

With so much complexity, one question repeatedly

arises. How much of this will businesses hand over to

service operators, and how much will they do

themselves? In theory, it will be possible to build or

enhance most next generation network applications

in-house, especially using tools such as Microsoft’s

LiveLink server, and link these to SIP-aware services

running on remote networks. But most CIOs are likely

to weigh up the risks and rewards and opt for an

outsourced service, even if they retain some critical

applications in house.

Article by Andrew Lawrence

alawrence@infoconomy.com


INTEGRATED COMMUNICATIONS

ECONOMICS

Faster, smarter, cheaper

Enormous efficiencies can be achieved by

merging voice and data networks.

The year before last they were thinking about it.

Last year, they thought about it some more. This

year, according to a growing body of indicators,

European businesses are throwing away their

private branch exchanges (PBXs) and buying into the

streamlined, cost-effective world of unified Internet

protocol (IP) networking.

Certainly, an explosion in the number and variety of

network providers, carriers, Internet service providers,

telecoms providers and mobile and voice operators –

both actual and virtual – onto the scene makes it an

innovative and ground-breaking time to be in the

telecoms business. But competition is fierce and

services are often the differentiating factor.

New applications such as web conferencing, voiceenabled

websites and presence technology are being

aggressively promoted to businesses to compensate

for the plummeting prices of traditional voice calls.

While voice over IP (VoIP) calls are almost free, they

carry a range of opportunities to increase the average

revenue per user (ARPU).

In North America, market watcher Infonetics

reported that VoIP service revenue topped $1.3 billion

in 2004 and is expected to soar 1431% to a dramatic

$19.9 billion a year in 2009, demonstrating the

inevitable boost that these extra services will have for

anxious telcos.

BENEFITS SOUGHT WHEN PLANNING IP COMMUNICATIONS

Cost savings (83%)

Need to standardize equipment

across multiple sites (82%)

Employee productivity

gains (71%)

Previous PBX was reacheding

the end of its lifecycle (71%)

Call centre volume increase (56%)

Other productivity factors (32%)

Other factors (19%)

Source: SAGE RESEARCH

% of responses "somewhat important" or "very important"

0 20 40 60 80 100

B10 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

But it is not just the VoIP arena that will be layered

with services. Converged networks also cater for video,

data, multimedia, fax and email, which all offer

numerous opportunities to raise the ratio of revenue

per customer.

Services such as data storage, security, higher quality

of service, remote access capabilities and scalability will

all be offered to the customer at a premium or as addons,

either as a managed/hosted service or as an inhouse

package.

FREE TIME

Other communications options come in the form

of online competitors such as Skype, which

provides free telephony over the public Internet,

rather than private IP networks, and with over 15

million end users is soon to launch a business

version of its software. When it does, it will join a

growing coterie of independent software vendors

who believe voice-enabled and other multimedia

applications will lead the next great trend in

enterprise software investment.

“A battle for the enterprise desktop is looming

between major IT and telecom vendors, and at the

centre of it are innovative types of user-defined

communications and the marriage of telecombased

convergence and IT-based desktop

collaboration,” says Tom Valovic, an IDC analyst

specialising in VoIP infrastructure.

Judging from statistics from analyst group Dell’Oro,

showing total PBX market revenues down by 8% in the

first quarter of 2005 and IP PBX segment revenues

growing by 18% in the same period, budgets are

migrating towards VoIP equipment. But however

much networking companies such as Cisco and Alcatel

argue that converged networks are taking off, VoIP has

simply not reached a standard comparable to the plain

old telephone system (POTS), in terms of reliability,

quality and security (see pages 22-23).

Why part with millions of pounds to throw away

a communications system that is still fully

functional? Unless companies are dealing with a

green field site, implementing a converged network

is really only applicable on a large enterprise scale,

or if a traditional PBX is outdated, inflexible and in

need of modernisation.

BIG ON BENEFITS

BT estimates that a fully integrated environment has

significant cost saving potential. For example, a typical

company comprising 800 field engineers and 200

office-based/nomadic employees could almost halve

its operational costs over a two to three year period.


The vision… and the reality

VISION

Integrated communications networks

promise savings in several areas: lower call prices,

reduced travel costs and savings through device consolidation.

But the gains from productivity improvements

will be even more significant: smarter working,

perpetual ‘presence’, stronger collaboration. Leading

edge companies cut costs with converged networks

but they are also using the new applications that unified

communications bring to revolutionise their business

processes and deliver enterprise-wide benefits.

These savings come in three main areas: consolidation

of applications and infrastructure; convergence of

disparate networks; and finally, the extension of

convergence benefits.

Across these three areas, it is possible, says BT, to

make savings of up to 42% in travel costs by

implementing audio and web conferencing technology,

and up to 20% by utilizing fixed-mobile convergence,

for example.

A good example of a successful migration to a

converged IP network was Abbey National’s 2003

project to update its IT infrastructure and telephone

network – one of the biggest of its kind in the UK.

The result was an eight-fold increase in bandwidth to

all Abbey branches and the installation of an IP

phone network.

This was done to reduce costs and to give the bank a

strategic advantage through the ability to, for example,

stream video clips to branches. The £125 million

contract with BT to provide a managed service,

combined with a £70 million desktop service

outsourcing contract with Computacenter, resulted in

a cost reduction of £57 million in 2004 alone.

And in 2004, Ford Motors signed a three-year deal

worth approximately $100 million with SBC to

provide and manage an IP telephony system for

50,000 business users across 110 Ford facilities in

Michigan, USA, signalling that VoIP technology is

slowly getting recognition as a reliable, cost-effective

alternative to circuit-switched PBXs. The transition

will make it easier to deal with employees moving

between various offices, and will allow Ford to scale

up or down its usage with minimal disruption – all

part of a drive to maximise operational efficiencies.

The major barrier to customers switching to a

converged network is the initial cost of deploying the

www.infoconomy.com

INTEGRATED COMMUNICATIONS

ECONOMICS

REALITY

The reliability of converged network services, such

as VoIP, is still falling short of the mark set by traditional

PBX systems. As a result, many organisations

are not sanctioning a wholesale move to converged

networks, whatever the potential gains. Vendors will

not convince businesses to make the transition without

extensive marketing and educational strategies,

to expound and quantify the benefits and ROI of

bringing voice and data together on one network,

and to address concerns over quality and security.

“A battle for the enterprise desktop

is looming – at the centre of it is the

marriage of telecoms and IT.”

technology, and the difficulty of quantifying the

financial benefits of such an implementation.

The cost savings of web conferencing tools due to

lower travelling costs are one way to estimate return

on investment (ROI). For example, Aviva, now the

UK’s largest insurance group with nearly 50,000 staff

worldwide following its merger with Norwich Union,

chose a web conferencing tool from collaboration

specialist Webex in a bid to cut down on international

travel and says it saved £75,000 in the first year alone.

Chris Rechtsteiner, VP of marketing at enterprise IM

vendor Parlano, likens ROI to outer beauty – it is all in

the eye of the beholder. He says people latch on to the

decrease in telephony and email storage costs,

precisely because they are tangible numbers.

“It gets more nebulous when it comes to identifying

business opportunities,” he says. While it is difficult to

put a price on the time saved as a result of a fully

mobilised, converged network, the common

consensus is that it is priceless.

Article by Kate Adair

kadair@infoconomy.com

INFORMATIONAGE BUSINESS BRIEFING 2005 B11


INTEGRATED COMMUNICATIONS

SERVICE OPERATORS

Life after POTS

The business of charging per minute to connect

two telephones across a network is dying. But the

major telcos have ambitious plans to drive

revenues from new services.

At the World Conference of French telecoms

equipment maker Alcatel in February 2005, the

keynote speaker, Dr James Canton, chairman of the

Institute for Global Futures and a former White

House science and technology advisor, attempted to

shake up his audience by making a bold prediction:

“Within 10 years telecoms companies will have

ceased to charge customers for voice calls, and will

instead generate all their revenue from data

services.” Telcos that fail to recognise this trend and

respond accordingly, he warned, will not survive.

If Canton had been expecting his prediction to

provoke shock or protest, then he chose the wrong

audience. Probably the only aspect of Canton’s

remarks that the assembled telecoms professionals

might have disagreed with was his timeframe. Many of

them, possibly most of them, recognise that the death

of voice tariffs will happen much earlier than 2015.

Indeed, although they are sometimes still loathe to

admit it, most of the world’s telcos have been

preparing themselves for life after POTS (the ‘plain old

telephone service’) for sometime. The business of

charging per minute for connecting two telephones

across a network has been their chief revenue source

for the last 120 years – but not for much longer.

The writing has been on the wall for POTS ever since

a wave of widespread market deregulation hit the

industry in the 1980s. Under pressure from

competitors, per minute charging began to decline for

the first time; then, in the 1990s, new routing and

transmission technologies made the real cost of

The vision… and the reality

VISION

The post-POTS public network will

bring broadband dial-tone to the masses, significantly

reduce telco operating costs, and provide a flexible

and more responsive platform on which to develop

and deploy innovative, integrated business services.

Operators that invest in such networks will gradually

evolve from traditional, connection-centric telcos, to

modern, application-aware network service providers.

REALITY

No large public network company has yet managed

to create a pure Internet protocol (IP) public network

based entirely on industry standards –

although most have that ambition. Pioneers such as

BT will have to work closely with suppliers and standards

bodies to co-develop management and billing

packages, and may still have to resort to proprietary

standards to make things work.

B12 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

making such calls infinitesimally small – sparking an

international trade in ‘bulk’ voice minutes.

Consequently, even before voice-over-IP ‘softphone’

companies (such as Net2Phone, Vonage and Skype)

began to give anyone with a personal computer and an

Internet connection the ability to talk to each other for

free, switched voice minutes had become a commodity

business. And, as Canton might have put it, most telcos

have been planning their response accordingly.

WHERE NEXT?

However, recognising that it is time to create a post-

POTS exit strategy is one thing; deciding on what that

strategy should be and, crucially, when to execute it, is

an altogether more challenging problem. Certainly for

former public telephone operators (PTOs) such as BT,

Deutsche Telekom and France Telecom, deciding

overnight to abandon decades of investment in a

public switched telephone network (PSTN) is neither

viable nor necessary.

In the UK for instance, BT is still the first port-of-call

for the vast majority of the nation’s phone users —

even after 23 years of competition from alternative

fixed-line carriers and almost as many from wireless

network operators. Critically, it is also still the sole

owner of a local loop infrastructure comprised of

around 400 million miles of copper cabling that

terminates in some 30 million homes and businesses.

Such assets aren’t cast aside lightly and BT, alone so

far among Europe’s leading telcos, has in fact

published its plan to upgrade its network infrastructure

to support a new set of IP-based services (see page 14).

Given that it will be five years before BT has

completed its 21 st century network (21CN) project, it is

no surprise to find that the plan has been greeted with

healthy scepticism both by BT’s rivals and by some

independent analysts. According to Margaret Hopkins,

an associate analyst with telecoms consulting group,

Analysys, the most significant feature of BT’s new

project is not the extent to

which it is adding new

infrastructure to the

national network, but the

extent to which it is

preserving the useful life

of existing investments.

“21CN is all about

sticking to copper,” says

Hopkins. “It means there

won’t be any roll out of

fibre, unless it’s to large

new housing estates or

other greenfield sites.” All


the same, she adds, “It does mean that every

residential line will automatically get an upgrade to

broadband.”

It is this universal provision of broadband to the

home that is seen as the central point of BT’s post-

POTS business strategy, which is to shift away from

connecting people across a private metered circuit and

to become a provider of a full range of broadband

services, including voice, data and television.

The same so-called triple-play strategy is also being

adopted by other European telcos. In Italy, new carrier

FastWeb is taking advantage of a slow start by the

incumbent operator, Telecom Italia, and has rushed

ahead with a three-pronged voice, video and data

package that has quickly caught on with subscribers.

In Germany, the former PTO Deutsche Telekom

(DT) is taking a more measured approach, treating

business as the primary target for its broadband

services. “Convergence [of data and voice] is real in the

enterprises, but not in residential,” explained CEO, Kai-

Uwe Ricke, at a recent conference. Denying DT’s focus

on business rather than residential broadband shows a

lack of ambition, he says DT is committed to using

broadband as a lever for radical change: “DT is not a

network provider anymore, it’s an ICT company,” says

Ricke. “Businesses need billing services, HR services,

and they need them with guaranteed service levels.

These are all things that we have a history in.”

HOME ADVANTAGE

As the former UK national PTO, BT starts off with

advantages that other telcos will struggle to match,

particularly the near universal access to the UK

residential market that the broadband 21CN will

provide. However, with broadband wireless

alternatives such as WiMax and 3G either set to match

or exceed the likely peak capacity of BT’s xDSL

broadband over copper technology, and with cable and

satellite TV operators already having dipped more than

a toe in the telecoms space, BT’s residential play

position is by no means assured. For this reason, it is

pursuing business customers with equal gusto.

Indeed, for the post-POTS telcos, the business

services sector offers both the richest potential for

immediate top-line gains and its sternest competitive

test. BT Global Services, the company’s business

network services arm, already has an enviable

customer base both at home and abroad, thanks in no

small measure to the company’s £520 million

acquisition of Infonet. This deal puts BT Global

Services on a more or less equal footing with major

international competitors such as SBC’s AT&T and

France Telecom’s services arm, Equant. These are the

www.infoconomy.com

INTEGRATED COMMUNICATIONS

SERVICE OPERATORS

companies BT’s Global Services business is most likely

to go head-to-head with for big multi-million full

service contracts. However, this won’t stop BT’s

customers becoming the targets for a host of smaller,

and more specialised competitors, such as Colt,

Kingston Communications, Vanco and Savvis.

BT’s size and comprehensive services portfolio

ought to give it the edge over most rivals when it

comes to winning major contracts from businesses

such as Reuters and Unilever – who tend to favour a

one-stop-shop approach to their communications

requirements. However, according to Larry Velez,

senior European telecoms analyst with Forrester

Research, a number of companies are eschewing the

risk of placing all their communications needs with one

operator, and are instead pursuing a best-of-breed

strategy that plays into the hands of smaller players.

There is no shortage of operators that fit this

description, such as Colt, with its rich estate of

metropolitan fibre ring assets, and Savvis, the IP

network and data centre operations specialist. The

view of the financial and IT market analysts is that

technological convergence does not necessarily mean

consolidation of suppliers. The IP services market will

be as complex as the networks themselves.

Article by Phil Jones

pjones@infoconomy.com

INFORMATIONAGE BUSINESS BRIEFING 2005 B13


INTEGRATED COMMUNICATIONS

SERVICE OPERATORS

21st century simplicity

BT’s new £10 billion national communications

network will dramatically simplify business

communications.

The quality of any company’s communications

services is ultimately determined by the nature

of the network infrastructure that supports them. In

this respect, the good news for UK business is that

the country’s dominant carrier, BT, is building an

entirely new national network for the Internet age.

Indeed, the £10 billion, five-year 21st century

network (21CN) project that BT announced last year is

expected to catapult the UK’s national telecoms

network to the top of the global technology

infrastructure pecking order. When it is completed,

sometime in 2010, BT will become the first national

telco to own and operate a pure Internet protocol (IP)

network. At the same time the UK, by implication, will

become the first country in the world to ‘switch off’ its

public switched telephone network (PSTN).

The significance of this to UK business telecoms

users should not be underestimated. For the last four

decades, enterprises have struggled to match their

increasingly data-centric, digital communications

requirements against a public network infrastructure

that was designed to support analogue voice services.

To do so has involved the use of a constantly shifting

and complex mosaic of different network services.

Getting the most out of a kaleidoscope of raw

leased-line bandwidth, integrated services digital

network (ISDN) dial-up links, frame relay overlay

networks and asynchronous transfer mode (ATM)

switched systems has been neither simple nor cheap.

Each service has had to be separately procured;

separately provisioned; separately managed; and

separately billed and paid for. But not any more.

B14 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

In theory, 21CN will cure this nightmare of

operational and management complexity at a stroke.

Multiple individual networks running arcane telecoms

switching protocols will be replaced by a single, logical

network based on IP. In essence, the UK is swapping

the analogue dial tone that has greeted the ear of voice

callers for more than 100 years, with a ‘broadband dial

tone’ geared to the ‘voices’ of digital devices.

Customers will still be able to access different types

and standards of service over this logical network:

including end-to-end ethernet for those with big

throughput appetites and subtler, application-sensitive

services based on multi-protocol label switching

(MPLS), for others. Now though, all of these services,

including voice and video, will be accessible at all points

of the network via branch exchange devices known as

multi-service access nodes (MSANs).

Every UK business stands to benefit from this – not

least BT itself. BT expects 21CN to reduce its

operational costs by around £1 billion a year, and to

provide its business units with a more flexible,

responsive platform on which to build new services –

and hence respond more quickly to shifting market

demands. To what extent customers and business

partners will be able to share directly in these benefits

remains to be seen.

In theory, the greater flexibility of 21CN ought to

make it easier and cheaper for other operators to

launch new services based on BT’s infrastructure,

raising the prospect of a new era of communications

service innovation in the UK. In practice, a lot will

depend on how successfully Ofcom can strike a

balance between allowing BT the fruits of its

investment, whilst also ensuring that 21CN’s

advantages are not unfairly reserved for the benefit of

BT and a few chosen partners – such as Microsoft.

Much the same can be said of BT’s relationship with

its business customers. So far, in its promotion of

21CN, BT has talked about giving customers greater

control and faster access to services. At some point,

this should translate into fully self-provisioning

services: allowing customers to dynamically, and

automatically, access bandwidth, storage or whatever

other physical and logical resources BT and its partners

are able to offer over the network.

But how quickly that point is reached will depend on

how fast BT can develop the management systems

needed to control, meter and bill for them and, critically,

how quickly BT’s competitors can force its hand.

Article by Phil Jones

pjones@infoconomy.com


Chivas Brothers – case study

When Pernod Ricard and Diageo

jointly acquired Seagram’s wines and

spirits business in 2001, one of the

world’s best-known whisky makers –

Chivas Brothers – was included in the

purchase, and its manufacturing and

bottling facilities went to Pernod Ricard.

Headquartered in Paisley near Glasgow,

and employing over 800 people, Chivas

produces a number of prestigious whisky

brands including Chivas Regal and The

Glenlivet.

Rather than subsume its new whisky

making subsidiary into its global

operations, Pernod Ricard gave Chivas

Brothers a degree of autonomy. For

Chivas Brothers, being a separate entity

again as opposed to part of a wider

business, had repercussions that had to

be addressed without delay. Among the

ADVERTISEMENT FEATURE

After its acquisition, the whisky maker needed a swift

network upgrade that would not add to the disruption.

"The changeover to the

IP Clear data network

was well-run and wellmanaged…We're

saving

up to 20 per cent against

the arrangements we

had previously."

Stuart Watson,

IT Director,

Chivas Brothers

most important was the selection and

implementation of new communications

networks.

Under its new owner, Chivas Brothers

wanted a flexible, expandable, reliable

and less expensive network solution that

would be based on proven technology.

Above all it wanted a solution that could

be installed quickly – in about three

months – and painlessly. “Our number

one priority was to completely avoid

business disruption,” recalls Stuart

Watson, IT Director at Chivas Brothers.

Chivas Brothers opted for a single

supplier – BT – to help implement its

communications strategy. Initially the

focus of that strategy was on getting a

data network up and running but, in later

phases, a converged voice and data IP

network would be implemented. Chivas

Brothers chose BT’s IP Clear service, and

Internet Protocol (IP) Virtual Private

Network (VPN) running over BT’s wholly

owned IP MPLS (multi-protocol label

switching) network. Apart from the IP

technology, Chivas also wanted a service

provider with demonstrable project

management skills to meet its tight

deadlines.

In just three months, BT installed the

data network linking Chivas’ 21 sites so

that they could share vital data –

including Chivas’ main manufacturing

and financial applications – as well as email

and internet access. Sites include

rural distilleries in the Highlands of

Scotland, bottling facilities in Paisley, a

main distribution centre in Linwood, and

administrative offices in both Paisley and

London. Stuart Watson says, “The

changeover to the IP Clear data network

was well-run and well-managed. We had

practically no disruption to business at

any of our sites, and the project came in

on time, on budget and exactly to our

expectations.”

Under the terms of the five year

contract, BT is also fully managing

Chivas’ data network. Watson explains

why, “We chose a fully managed option

because BT was offering a good, flexible

service at a cost effective price, and I

didn’t want to tie up one or two of my MIS

staff constantly monitoring the data

network. It really isn’t part of our core

function.” Included in the BT service is

proactive network monitoring and fault

handling, the aim of which is to identify

and correct faults before they affect

Chivas’ network service. Chivas Brothers

receives network performance data and

management statistics from BT every

month, which include information on the

data network’s peaks and troughs,

enabling Chivas Brothers to make betterinformed

decisions about changes to its

network.

Having a robust network is crucial to

Chivas’ business. Some 800 employees

rely on access to the data network to

perform their daily jobs. Also, being a

whisky producer, Chivas Brothers is

required by customs and excise to track

its products from distilleries, through

bottling to distribution. However, one of

the biggest benefits of IP Clear is that it

provides Chivas Brothers with a flexible

and assured way forward. Chivas

Brothers has already installed IP-ready

voice solutions and expects network

convergence very shortly.

Now Chivas Brothers has a more

flexible and cost-effective network, and

the reliability that its business demands.

Stuart Watson says, “We’re saving up to

20 per cent against the arrangements

that we had previously, and our internal

key performance indicators show that

network availability has improved from

98.5 per cent to 99.9 per cent since we

took the managed IP Clear solution.”

By selecting BT’s IP Clear service,

Chivas Brothers has an up-to-date data

network that can easily be expanded as

the business grows. Equally importantly, it

has a service that supports its strategic

plan to converge voice and data over a

single network.

To find out more how BT's networked IT services

can help your organisation thrive, go to

www.bt.com/corporate/convergence


INTEGRATED COMMUNICATIONS

NEW APPLICATIONS

Powerful connections

Applications on unified networks are able to

exploit video, voice and data. Businesses that

use them can become far more productive.

When converged networks uniting data and

voice traffic were first developed, the ‘carrot’

that vendors used to lure customers to invest in the

technology was the saving they would make in

reduced phone bills.

Although there are still some companies that have

yet to weigh up the cost benefits of shifting to voice

over Internet protocol (VoIP), the convergence pitch

has moved on. Today, network hardware suppliers,

service providers and software developers are eagerly

touting applications that make use of an integrated

communications infrastructure not just to reduce

costs, but to change the way that businesses operate.

Their hope is that organisations will see the new

modes of working made possible by converged

communications not just as cost-saving, pennypinching

measures, but as a key source of competitive

advantage, if not an operational necessity. As yet,

though, these new applications are largely untested,

and there is considerable debate over their usefulness.

COLLABORATION

Collaboration tools will certainly be both enriched and

simplified by the integration of audio and video data.

By integrating VoIP with desktop calendar applications

such as Outlook, for example, it will be possible to

arrange and execute a conference call with a few

The vision… and the reality

VISION

Corporations will stream rich media

over IP networks, making remote collaboration simple

and intuitive and enabling staff, customers and

partners to quickly and easily share voice, video and

data. Presence technology will enable users to instantly

see the availability of workmates and clients. All of

the communication and collaboration technologies

supported by the converged network will be embedded

into critical business applications, revolutionising

business processes and powering a more efficient, collaborative

and auditable corporation.

B16 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

mouse clicks, rather than having to pay costly thirdparty

conferencing contracts.

However, many analysts still question the business

benefit of voice-enabled collaboration tools. “The

theory that these tools will cut down on air travel is

totally specious,” says Steve Cramoysan of analyst

group Gartner. “We could easily come up with a

counter argument that so much remote

communication might reinforce the value of face to

face dialogue.”

But unified communications networks will have a

much deeper impact upon collaborative work when

the features are integrated into existing working

processes. Neil Sutton, general manager of IT Services

at BT, believes, for example, that significant

productivity benefits will be derived from integrating

communications with document management.

“Using collaborative tools on shared documents and

shared content makes the process much more efficient.

Rather than sending round massive emails, an

employee can use their own personal portal to

distribute the information,” says Sutton. The increased

personal responsibility for documents engendered by

this approach, he argues, will also increase productivity.

US business intelligence company Fair Isaac is one

early adopter of voice-enabled collaboration. It uses

Microsoft’s Live Communications Server to support

communications channels such as instant messaging

and live conferencing both internally and with

customers. Since the roll out of the technology in

2005, the company says it has shortened the average

length of its sales cycle by 30%.

PRESENCE

The possibilities of the new ‘presence’ applications

enabled by integrated communications are generating

REALITY

Today’s Internet is providing businesses with a taste

of the interactive and collaborative applications to

come. But powerful tools such as BlackBerry email

forwarding, instant messaging and web conferencing

operate independently, and their reach into the

voice world is limited. Very few applications use

voice or video. Most enterprises are still analysing

the problem, consolidating their services and spending,

and undertaking the first stages of convergence.

For most, the world of unified applications is several

years away.


even more excitement. Using the session initiation

protocol (SIP) communications standard, applications

or users can automatically see the availability of

colleagues, clients or partners. As all forms of

communication are integrated over the same network,

anyone can find out whether the person they are trying

to contact is on the phone, using the Internet or out of

the office, and contact them via the most appropriate

means – email, instant message or mobile phone.

Furthermore, the message can be automatically

adapted to suit the preferred device of the recipient.

Again, the benefit of presence applications when

used on their own is debatable. “If the only advantage

is saving half an hour for an individual per day, that’s a

pretty weak value proposition,” says Gartner’s

Cramoysan. But when built into business processes, an

automated awareness of the location of key team

members might make those processes more efficient

and fail proof. If a certain level of employee is required

to approve a purchase order, for example, presence

technology could find which appropriate staff member

is readily available, and accelerate the process.

In the call centre, quickly being able to track the

whereabouts of an individual with specific experience

might help manage calls more effectively. “The focus

of the contact centre is the time it takes to turn around

the call,” says Rob House, head of business solutions at

communications technology vendor Siemens. Using

presence and SIP technology could reduce the time it

takes to connect the customer to the right contact.

Indeed, converged networking promises to

revolutionise the way call centres are operated. Abbey,

the UK Building society, recently rolled out a solution

in partnership with BT and Cisco that enables excess

traffic to its call centre to be routed to available staff in

branches around the country. Such a system could

equally be used to divert traffic to ad-hoc home

workers, whose availability can also be monitored by

presence technology.

“It’s hard to imagine any CRM application of the

future that will not have this technology embedded,”

says Jerry Caron, an analyst with research company

Current Analysis.

INTEGRATING INFORMATION

Many of the new generation collaboration

technologies being enabled by integrated

communications are primarily designed for

information workers. The premise is that their

knowledge is an asset that needs to be made more

available, more quickly, than has previously been

possible. Examples of task-based processes that have

been enhanced by integrated communications are not

www.infoconomy.com

INTEGRATED COMMUNICATIONS

NEW APPLICATIONS

HOW VALUABLE WOULD IT BE TO SEE YOUR COWORKERS’ STATUS

PRIOR TO CONTACTING THEM?

Not applicable (1%)

It would not have a real impact (1%)

It would be somewhat useful (15%)

It would be useful (45%)

It would significantly streamline internal communications (37%)

Source: FORRESTER RESEARCH

WHAT IS THE MOST IMPORTANT BENEFIT OF

REAL-TIME CONNECTIVITY?

Improved internal communications (37%)

Better and faster decision making (31%)

Increase customer satisfaction (18%)

Shortened production cycle (10%)

Source: FORRESTER RESEARCH

Other (3%)

numerous, although some such projects are underway.

But although many of the applications are presented

as a justification for switching to a converged network,

they may, in fact, not be dependent on a wholly IPbased

infrastructure. Launching such applications on a

mixed circuit- and packet-switched network may

involve more programming, and perhaps more

hardware, but for many companies this will be

preferable to throwing out their legacy systems.

Equally, the potential of converged communications

has only begun to be explored and many of these

applications are still in their infancy. However, the fact

that the integrated communications infrastructure is

based on open, standard platforms means that new

ways of building multimedia into business processes

can and will be developed rapidly, enabling new modes

of communication that are likely to revolutionise the

way businesses work.

Article by Pete Swabey

pswabey@infoconomy.com

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INFORMATIONAGE BUSINESS BRIEFING 2005 B17


The Eden Project opened to the public in

March 2001, and in its first two years

attracted close to four million visitors. This

rapid rate of growth soon outstripped the

capabilities of the site’s voice and data

communications infrastructure. In addition,

the Eden Project wanted to extend its vision

of promoting a greater understanding of the

relationship between plants, people and the

planet’s natural resources, to a global

audience using multimedia and the internet.

These longer-term aims meant that a simple

upgrade of existing systems would not be

sufficient.

The Eden Project started out with a

mixture of telecommunications, computers

and cabling from a range of suppliers. There

was no real integration between the various

IT systems. This limited the organisation’s

flexibility to develop its vision on the scale it

now dreamed of. Being a unique visitor

attraction with a world-changing agenda for

global education, it draws together state-ofthe-art

building architecture with some of the

most ambitious botanical and

ADVERTISEMENT FEATURE

The Eden Project – case study

A converged network transformed the attraction's IT

systems from constraint to competitive differentiator.

"Quite simply, we felt BT

was a company we

could do business with.

By working in partnership

at the leading

edge of technology and

responsible practise,

the possibilities are

enormous."

Tim Smit,

CEO,

The Eden Project

environmental features and goals the world

has ever seen. However, it has the internal

resources of a small business, limiting what

it could achieve under its own steam.

Howard Jones, Organisational

Development Director at the Eden Project,

made a call to Cisco Systems, which

catalysed a whole process that quickly

involved BT as a natural partner. Once

engaged, BT quickly became critically

important to the Eden Project. Not only did it

bring the right ethos, as an international

brand with a high commitment to corporate

social responsibility, it was also able to

embark upon providing certain managed

services.

The BT team worked closely with the

Eden Project management team to build up

a deep understanding of their needs. In

conjunction with Cisco Systems, BT

recommended a converged network

infrastructure. This would enable the Eden

Project to simultaneously address two

important objectives: ensuring that it ran

efficiently and productively with maximum

cost savings, while being able to exploit the

latest interactive and multimedia technology

when engaging with “virtual” visitors from

around the world.

Howard Jones says, “The Eden Project is

a facilitator for change: a place where

conversations can take place that will go

somewhere. What BT and Cisco have given

us is a means of enriching those

conversations and extending them to include

a global audience. These are people who

really do give a damn about corporate

social responsibility, and that’s crucial.”

The Eden Project is located in difficult

terrain in a remote location. Local

telecommunications infrastructure is sparse

and a single optical fibre provided the

organisation’s link with the outside world.

Although that link has never failed, the Eden

Project’s success has dictated the need for

greater business resilience and a BT

microwave link is planned, providing 2mbps

of alternatively routed bandwidth. Mobility is

also important to the Eden Project, and there

are already broadband BT Openzone

wireless access points at key locations

around the site to enable visitors to connect

to the internet.

As well as providing the right mix of

information and communications

technologies, selected and combined to

address the Eden Project’s unique

requirements, BT implements, manages and

supports elements of these on the

organisation’s behalf, so that its staff can

focus on their broader vision without having

to concern themselves with the technology

that makes it possible.

The Eden Project is enjoying multiple

benefits from its new infrastructure, both

internally in helping it to run more efficiently,

and externally in taking its vision to the wider

world. In addition, the Eden Project is

realising all the bottom line benefits

associated with a converged network,

including lower total cost of ownership over

the life of the system. “The converged

network brings immediate and dramatic

savings. And, since this is the Eden Project,

the system is designed for long-term

sustainability and evolution,” says Phil

Wharton, Head of ICT at the Eden Project.

Having the right infrastructure in place

means the difference between being able to

share knowledge with a classroom of

children on site in Cornwall, and being able

to extend the same experience to an

international audience over the web, using

sound, video and images as well as text and

graphics. The Eden Project has also been

able to deploy web cams and a flying robot

in its domes during temporary exhibitions. It

aims to allow people all over the world to

conduct virtual tours via the internet. “It is in

such areas that the strategic return on

investment will really be achieved,” says

Howard Jones.

The Eden Project’s CEO, Tim Smit,

concludes, “Quite simply, we felt BT was a

company we could do business with. By

working in partnership at the leading edge

of technology and responsible practice, the

possibilities are enormous.”

To find out more how BT's networked IT services

can help your organisation thrive, go to

www.bt.com/corporate/convergence


A world unwired

It is a staggering statistic. According to John

Wright, general manager of mobility at BT Retail,

four out of ten mobile calls are made from inside

offices. Forget the cost – the modern day business

executive rates convenience above everything;

there may be cheaper communications methods

available, but they cannot compete with the ease

and familiarity of the mobile phone.

For the businesses that, in many cases, pick up the

tab for those calls, it is a large and growing problem –

but one that could shortly be resolved. Network

operators and infrastructure providers are poised to

launch a raft of new products and services that promise

seamless communication unrestricted by location.

In-building wireless (WiFi) networks that can

support voice over Internet protocol (VoIP) to the

outdoor cellular network promise to preserve all the

benefits of mobile technology, while slashing call

charges. Globetrotting executives visiting offices

abroad, for example, can still use their mobile phone

but will no longer need to ‘roam’ onto expensive

foreign networks. Other benefits include better

integration with enterprise phone systems, allowing

improved transferring, parking, monitoring and

filtering of calls. Users will also be contactable on the

same phone number regardless of device or location.

The general release date for many of these new

services is 2006, but some functions are becoming

available sooner as vendors such as Avaya and Cisco

put their software onto smartphones – programmable

mobiles with advanced operating systems. However,

not all of these devices can provide seamless roaming

between networks, which proponents suggest is vital if

phones are to use the cheapest available network.

“It needs to be simple and easy. People are too busy

for that extra keystroke,” says Wright of BT. “The vision

we have is convergence whereby the [calling]

experience is not

degraded whether the

user is linked locally, at the

office, at home, or out

and about.”

He envisages that

phones will also connect

via emerging wireless

networks, such as WiMax

or high speed download

packet access (HSPDA),

but warns that as access

technologies multiply,

switching between them

manually will become

problematic.

INTEGRATED COMMUNICATIONS

MOBILE AND FIXED SERVICES

The convergence of next-generation services onto

wireless devices promises to deliver huge cost

and productivity benefits. First, several technical

and business barriers must be overcome.

COMMUNICATIONS FUSION

Proving that seamless handover could be achieved was

the key success of Fusion, BT’s long-awaited converged

phone service. “This is a watershed – separate fixed and

mobile telephony services are no longer discrete but

are intertwined,” gushed UK market watchers Ovum

at the launch in June.

BT may have achieved a world-first with a regular

mobile phone (in this case, a Motorola V560) that can

use both a landline and mobile networks. However,

Fusion is aimed at consumers and small businesses. The

use of Bluetooth, a short-range radio technology, to

connect the phone to the in-house hub, and unlicensed

mobile access (UMA), a technology for handing the

call from the home network to the public one, means

it is not suitable for large enterprises. Businesses need

such a device to make use of existing WiFi networks

and to integrate better with their private branch

exchanges (PBX). However, BT is working on a WiFi

version to replace Bluetooth. This will also be able to

make VoIP calls in BT’s Openzone wireless hotspots.

Taking advantage of the price benefits of VoIP

beyond office wireless local area networks (WLANs) is

a key selling point of such systems. BT’s Wright

suggests that mobile calls might typically take up 10%

of the volume of all calls on an enterprise phone bill,

but 50% of the cost. “Fusion is looking to bring

together the best of the fixed world – in quality of

service, cost and control – and add mobility.”

The vision… and the reality

VISION

As wireless technologies multiply,

mobile phones will be able to take advantage of the

cheapest available network, using VoIP where possible

for near cost-free calling and enabling truly realtime

communications. Calls will be handed over from

one network to the next automatically, without interruption

and concealing the underlying technological

complexities from the user. As well as cost, other benefits

include having only one contact number and

greater portability of enterprise applications.

www.infoconomy.com

REALITY

Although fixed-mobile convergence services are

already available for consumers, the challenge of

integrating enterprise telephony systems with existing

mobile networks and WiFi zones is much greater,

particularly when it comes to achieving seamless

handover. Competing service provider interests have

impeded progress, as have issues of device cost, size

and battery life. The uncertain progress of other

high-speed wireless networks, such as 3G and

WiMax, will further complicate convergence.

continues >>

INFORMATIONAGE BUSINESS BRIEFING 2005 B19


INTEGRATED COMMUNICATIONS

MOBILE AND FIXED SERVICES

ENTERPRISE VoWLAN HANDSET SHIPMENT VOLUMES,

BY TYPE, WORLDWIDE, 2001-09

Units, million

12

10

8

6

4

2

0

2001

2002

2003

2004

Source: DISRUPTIVE ANALYSIS, JUNE 2005

2005

Dual-mode SIP VoWLAN/cellular Dual-mode UMA/GAN CoWLAN

2006

However, enterprise-class Fusion will not be

available until mid-2006, partly due to handset delays.

Few affordable devices capable of both WiFi and GSM

calls are available, but many are in development. Cisco,

for example, is working with both Nokia and Motorola

on ‘dual-mode’ phones, which will enable continuous

calling across cellular networks and WLANs. Both are

due for release in 2006 and will tie into existing Cisco

equipment, tackling the tricky issues of seamless midcall

network roaming and device authentication.

Nokia has also developed a dual-mode WiFi and

cellular handset with networking equipment provider

Avaya, which can detect and use WiFi when available.

But while supporting the fundamentals of converged

communications – one phone number, one mailbox,

cheaper in-office calls – it will not be able to sustain

calls moving between WiFi and cellular networks.

FINE FORM

But then not everyone agrees with BT that seamless

handover is so crucial. “How often do you walk from the

office to the car while on the phone?” asks Jerry Caron,

principle analyst at research firm Current Analysis. “Is it

that big a deal to say ‘I’ll call you right back’?”

The final form factor and functionality of dual-mode

handsets is more important, says Caron. “Those

devices really need to be multi-mode – the exact same

people who benefit from PDAs, smartphones or

BlackBerrys today are the people who will benefit from

dual mode devices. So whatever beast comes out

cannot be voice only, it has to be able to support

business applications.”

Avaya and Research in Motion have already joined

forces to extend applications to the latter’s BlackBerry

device using the session initiation protocol (SIP), which

can make any device communicate with any other.

They are starting with VoIP but plan to develop

business applications for the handheld general packet

radio service (GPRS) emailer. But GPRS will not

provide enough bandwidth for applications such as

B20 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

2007

Cordless IP — Single-mode VoWLAN

2008

2009

videoconferencing, which means for truly seamless

convergence of applications and services from wired to

wireless, 3G networks will have to come into play.

Here again, device design is key. “Most high-end

phones are becoming 3G anyway and to do voice over

WLAN you need a high-end phone because you need

a fast processor and a smart operating system,” says

Dean Bubley, a wireless VoIP expert with Disruptive

Analysis. Battery life is also an issue, he says. “A phone

is very tightly engineered to a power budget. WiFi and

VoIP applications make more demands on processor

requirements and on the battery. Running [free

consumer VoIP service] Skype on a PDA requires at

least a 400mhz processor but even Symbian

smartphones today rarely have more than 200mhz.”

CHANGING RELATIONSHIPS

The technical challenges of passing voice calls between

3G and WiFi are more than enough to keep developers

and engineers busy. But there are also some tricky

business issues to overcome. VoIP calls are not metered

by the minute, undermining most operators’ current

business models. Even diverting in-office calls from

their networks could seriously dent their revenues.

Vodafone has not taken kindly to the threat. Its

German unit has threatened to block some VoIP calls

to its network and has introduced aggressive new

international roaming tariffs with its ‘Passport’ service

– all designed to encourage customers to ditch

landlines altogether and go completely mobile.

Analysts are certainly divided on the size of the

converged opportunity: Infonetics Research’s latest

survey into voice over wireless LAN (VoWLAN) found

that 36% of respondents are planning

implementations, up from 13% in 2003. Specialist

wireless advisory group Farpoint estimates that half of

all mobile phones will have WiFi functionality by 2010,

but Bubley of Disruptive Analysis predicts SIP-based

dual-mode handsets will make up only 5% of the

market by 2009, with 5.8 million sales worldwide.

That caution may well reflect the potential

complexities of managing and integrating so many

products and services from different vendors –

described by one IT manager as “finger pointing hell”.

Few operators have even worked out their billing plans

and business models for this converged world.

While the business goals of ubiquitous, real-time

communications are clear, the technology that will

enable it remains a topic of fierce debate.

Article by Tim Bradshaw

tbradshaw@infoconomy.com


Criminal Justice is a major area of public

service in the country. Some 400,000 people

serve it, from court ushers, judges and

Crown Prosecution Service lawyers to police,

prison and probation officers. In order to

function effectively, the service and related

Government departments need to be

supported by robust IT systems.

The Criminal Justice IT (CJIT)

programme was set up in spring 2002 with

a vision of enabling anyone involved in

Criminal Justice – including professionals,

victims and witnesses – to have easy access

to all available information relating to their

part in the criminal justice process.

Over the past three years the demands

on the CJIT team have grown. Most recently

ADVERTISEMENT FEATURE

Criminal Justice IT – case study

A new wireless network allows the justice service to

balance remote access with tight security.

"We needed a new

model allowing

intrinsically secure

transmission and access

to information

irrespective of where the

person was working."

Ian Baker,

Assistant Director of

Infrastructure Services,

Criminal Justice IT

it has been tasked with enabling employees

to work more flexibly. Ian Baker, Assistant

Director of Infrastructure Services, CJIT,

explains, “We wanted to provide individuals

with greater choice over how they work, and

gain improved productivity through the use

of enabling technology.”

In addition, the introduction of flexible

working procedures was seen as a means to

reduce the need for formal office space and

help utilise what was left more efficiently. As

Ian Baker comments, “What we needed was

a new model that would push the envelope

from current fixed desk working or basic

remote access – allowing intrinsically secure

transmission and access to information

irrespective of where the person was

working.”

At the centre of CJIT’s plans was the

development of an advanced Wireless LAN,

which would meet Government-level

security specifications for connection to the

Government Secure Intranet (GSI). In

developing this solution, CJIT also looked to

instigate an improved definition of the

Wireless LAN specification, which conforms

to the Manual V Government security

standard defined by CESG, the Information

Assurance arm of GCHQ.

CJIT chose BT to design and deliver the

Wireless LAN solution, which now provides

secure end-to-end access between laptops

and offices while CJIT employees work

remotely. The new infrastructure was

designed to meet the operational needs of

Criminal Justice users whilst complying with

the strict accreditation requirements for GSI

security, for both CJIT and other

Government users.

Working closely with CJIT throughout the

design stages and implementation, BT

conducted a number of exercises to

maximise the effectiveness of the final

solution. For example, it carried out research

into the best places to deploy the wireless

hotspots, as well as a technical audit of

possible sources of radio frequency

interference. Critically BT identified and

minimised security risks from nearby wireless

networks or potential drive-by hacking.

The infrastructure design underwent

thorough testing before it was granted

CESG approval and deemed secure for

connection to the GSI. The CESG team

undertook an intense period of penetration

testing, which included mimicking possible

hacking attacks that might take place, to

actively and realistically evaluate the

network’s security measures. Only once

these tests were passed was the network fully

approved.

Wireless LAN working is now helping to

make the Criminal Justice service more

efficient in a number of ways that create a

‘win-win’ situation both for the organisation

and its employees. For example, people are

able to use their time more productively and

respond faster and more accurately to ad

hoc requests through better and ubiquitous

access to information. These efficiency

savings are vital in helping the service to

deliver the savings demanded by the

Gershon Review of public sector spending.

The new network can also help reduce

office relocation costs. For example, when

the CJIT teams in London moved offices in

February 2005, those people with fixed and

wireless VPN access suffered only a

weekend of downtime as opposed to three

days or more for those on the fixed network.

This move was fully supported by BT with the

same security and Wireless LAN experts

carrying out a new survey, re-installing the

network and ensuring that all steps were

taken to preserve the security of the CJIT

network to maintain GSI accreditation.

This project underlines the value of

flexible working within the sector and

demonstrates the potential for introducing

secure Wireless LAN solutions into other

areas of Criminal Justice such as the Crown

Prosecution Service and Prison Service. The

CJIT model could be instrumental in any

future roll-out, providing the research,

experience and best practice that will enable

fast, secure deployment of flexible working

and remote access to even more

professionals in these sectors.

To find out more how BT's networked IT services

can help your organisation thrive, go to

www.bt.com/corporate/convergence


INTEGRATED COMMUNICATIONS

SECURITY & RESILIENCE

Voicing concerns

Integrated communications brings many business

benefits, but securing converged platforms is a

considerable challenge.

Today’s network security managers spend little

time worrying about telephones. Most are too

busy trying to protect their data network from

hacking, viruses, spam and a myriad of other threats

that have become part of day-to-day business.

But as more companies take the decision to move

voice traffic off traditional circuit-switched networks

and onto a converged communications platform, the

problems of securing voice look set to make data

management look simple.

Many analysts have expressed concern that

businesses do not fully understand the challenges of

managing and protecting voice traffic on Internet

protocol (IP) networks, presuming that the measures

in place to protect data traffic will be sufficient to also

protect voice. Elizabeth Herrell, a vice president at

industry analyst Forrester Research, for example,

believes there is widespread complacency: “Many

mistakenly believe that if they have security for their

data network, it will be adequate for their voice. This is

not true and additional security is needed.”

To help highlight this issue and help develop

solutions, the Voice over IP Security Alliance (VoIPSA)

was formed in February 2005, bringing together a

range of vendors, researchers and consultants. Its view

on the risks associated with converged networks:

B22 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

“Successful attacks against a combined voice and data

network can cripple an enterprise, halt

communications required for productivity, and result

in irate customers and lost revenue.”

David Lacey, chief security officer of the Royal Mail,

is equally alarmist. “Putting VoIP into the data network

will drive a coach and horses through existing firewall

security,” he says.

SPEED VERSUS SAFETY

The main problem lies in the fact that the time-critical

nature of voice packets means they cannot be

quarantined for inspection in the same way as data.

Firewalls, understandably, tend to slow the transfer of

data by anything from a matter of seconds to a few

minutes while they scan the contents of the data

packet, but even a minimal delay to a voice packet

would render a voice call unintelligible. However,

opening up firewall ports to ensure faster

communication leaves the voice network open to

threats, such as denial of services and toll fraud.

A Gartner study, ‘IP Telephony Security Demystified’,

recommends that to minimise the security threat, “the

firewall must scan VoIP messages and open ports

dynamically only for calls approved by the call control

server. At call disconnection, the firewall must close the

session as well as any open ports.”

There is an added complication. Because people are

used to the high availability and quality of the public

switched telephone network (PSTN), expectations for

VoIP are also sky high. Most converged networks can

now ensure four or five ‘nines’ of reliability – that is,

they are up for 99.99% or 99.999% of the time – but

there are still a plethora of quality of service issues.

Any delay over 50 milliseconds, for example, can

create echo on a VoIP call and delays over 250

milliseconds can lead to participants talking over each

other. Jitter – the disruption in sound that is the result

of packets being delivered at different times – can be

minimised by holding the packets long enough for the

slowest to arrive, but that causes delay.

Such delays can be alleviated by prioritising voice

traffic over data, meaning that although they may use

the same routes, a voice packet will always get through

ahead of a data packet. Gabor Szabo, security business

development manager from networking vendor

3Com, says, “Switches should be able to automatically

understand voice. An application-oriented network

[AON] better understands how traffic should be

handled.” A converged voice and data AON could put

voice above other applications, such as a supply chain

or enterprise resource planning system.

Craig Pollard, head of security products and services


The vision… and the reality

VISION

Converging voice and data on to an

integrated platform provides the opportunity to

secure both the network and the applications on it.

Because access policies can be built in, and devices

secured, there will be no need to have separate firewalls

and intrusion detection systems to secure data.

Intelligent networks prioritise different kinds of traffic

and detect voice and data application breaches.

New opportunities to distribute critical voice and

data capabilities over a common network infrastructure

also aids business continuity.

at network equipment maker Siemens Communications,

agrees that the network needs to be

more intelligent, “because more openings to that

network are intelligent”. For example, he says: “When

you pick up an IP handset, you’re essentially picking up

a computer.”

All the networking vendors are now working on

adding more intelligence – and resilience – to their

products. That there is work to be done with regards to

tightening vendors’ offerings was made clear in July

2005 when Cisco, the undoubted leader in the field,

had to issue a patch for a major vulnerability in its

CallManager software which, if seized upon, could be

used to launch denial of service attacks. CallManager is

the call-processing component of Cisco’s architecture

for voice, video and integrated data (AVVID).

The session initiation protocol (SIP), which

facilitates communication across differing networks

and devices, is also susceptible to security breaches

since its relative immaturity as a standard means it

does not have clearly-defined security requirements.

Herrell of Forrester Research believes that this is a

cause for concern: “The lack of firm specifications on

SIP standards allows vendors to determine how much

security is built into the system. Standard security

tools for data networks are ineffective with SIP and

must be upgraded.”

RECOVERY RAMIFICATIONS

Converging voice and data also has implications for

business continuity and disaster recovery – but these

are not all bad. Putting voice and data on the same

network increases the risk of voice going down,

because IP networks fail more often than a PSTN.

However, since IP extends across the whole network, if

www.infoconomy.com

INTEGRATED COMMUNICATIONS

SECURITY & RESILIENCE

REALITY

Most companies are reasonably confident in the

security of their data networks and the reliability

and quality of their existing phone systems. Put the

two together, however, and the picture is not quite

as rosy. VoIP introduces vulnerabilities to which the

previous PBX was impervious. Product developers

and users are still learning how to secure a converged

network, but many do not realise the need

for a new approach. The relative immaturity of new

communications protocols – even the ubiquitous SIP

– adds to the risk of instability.

there is a disaster it is easy for employees working

remotely to access the system, and thus, in the case of

a converged network, maintain communications.

There is no need for a remote site with dedicated, prewired

lines to be set up. Instead the workforce just has

to have access to broadband and business will

continue as usual. “It’s a boon to business continuity

not a threat to it, otherwise why would you bother?”

asks Neil Sutton, general manager of IT services at BT.

“Businesses need a tangible benefit.”

Others also see communications convergence as

having a positive impact on overall security – if

businesses are willing to take the threats seriously. The

introduction of a new architecture, they argue,

presents a valuable opportunity to invest in protection

simultaneously, meaning the technology is secure from

the start rather than having to play catch-up as

happened with data. Ari Takenen, CEO of

Codenomicon, a provider of tools that automate

software testing, says that it is important that VoIP is

not allowed to fall “into the patch-and-penetrate race

we have had to witness with other widely deployed

communication software”.

Protecting converged networks undoubtedly

requires a radically different way of thinking about

security, says Lacey of the Royal Mail, and, he argues,

there are gaps in understanding risks and solving them.

But, he says: “It is do-able.” Moreover, he agrees that

putting another valuable application – voice – over the

data network could pave the way for investment in a

comprehensive, secure infrastructure.

Article by Abi Carter

acarter@infoconomy.com

INFORMATIONAGE BUSINESS BRIEFING 2005 B23


Visa CEMEA – case study

VisaNet is the processing system that

enables Visa transactions to be authorised

and monies transferred from cardholder to

merchant. It connects every single bank

which issues Visa cards. Processing up to

5,000 authorisation transactions per second

and settling as much as US$5 billion and

100 million transactions in a single day, it is

the world’s leading financial transaction

processing system.

Visa’s CEMEA (Central & Eastern

Europe, Middle East & Africa) business has

grown rapidly since it was formed in 1995.

As new banks join Visa, the network that

ADVERTISEMENT FEATURE

Switching to a consolidated infrastructure cut running costs

and facilitated future expansion for Visa's processing system.

The new BT infrastructure

offers the scalability

and flexibility required to

meet the challenge of

Visa’s growth in emerging

markets, as well as

providing a platform

for Visa to develop and

deliver innovative

products in the CEMEA

region. BT has enabled

us to provide a much

better service to our

members while reducing

costs and simplifying

supplier and network

management.”

Brian Huckett,

CFO & CIO,

Visa CEMEA

connects them to VisaNet expands. To cope

with this, Visa used fit-for-purpose solutions

for each individual market. However, by

2002 Visa CEMEA found itself with an

increasing number of contracts to manage

and problems identifying which supplier

owned a specific connectivity issue. There

were also increasing costs of running the

network, which though solid, was based on

out-dated technology.

Visa recognised that a switch to a

consolidated network, combined with

rationalising its supplier contracts, was the

best solution. It embarked on a thorough

market evaluation to identify key business

drivers and create a technology roadmap

with which to move forward.

Remote areas were a serious

geographical and environmental challenge

for maintaining Visa’s service levels and

providing the required resilience. In

addition, most CEMEA countries are cash

economies. For Visa cards to compete with

cash, being more secure is not enough. Visa

CEMEA needs to offer a service that is at

least as quick and as reliable as cash.

In CEMEA, the cultural shift toward

electronic payment began with Visa Electron

debit cards. Many of these have been issued

as ‘salary cards’ where an employer works

with a bank to issue cards to all its

employees enabling it to switch from paying

salaries in cash to electronic payment. One

example of this is the City of Moscow

benefits system, where over two million Visa

cards have been issued to pensioners,

students and public sector employees. The

new system has improved services, reduced

fraud and brought many new people into

the banking system.

To offer this type of service in CEMEA

required the right infrastructure. Visa began

negotiation with 250 different suppliers with

a view to delivering a new network for the

CEMEA region. In April 2003, Visa offered

the five-year contract to BT, encompassing a

265-site, 51-country migration path. The

network would need to be highly available

and fully resilient. Visa was confident that BT

acting as prime supplier would guarantee

those attributes. Head of VisaNet Service

Management for Visa CEMEA, Raj Haider,

says: “We created a strategic partnership

with a strategic direction. The concept of ‘insourcing’

was agreed between the two

parties, with BT people working inside the

Visa organisation. This has helped BT gain a

deep understanding of the business and

made for an efficient partnership.”

There were plenty of challenges in

delivering the project on time – from power

supplies to shipping to engineering

challenges, as well as cultural and political

obstacles. Many challenges were unique to

the areas in which the projects were being

carried out – from the blistering heat of the

Sahara Desert to the freezing tundra

of Siberia, BT had to ensure it

solutions worked.

Ninety per cent of the 265 sites were live

by July 2004, with the last site migrated in

February 2005. “The new BT infrastructure

offers the scalability and flexibility required to

meet the challenge of Visa’s growth in

emerging markets, as well as providing a

platform for Visa to develop and deliver

innovative products in the CEMEA region.

BT has enabled us to provide a much better

service to our members while reducing costs

and simplifying supplier and network

management,” says Brian Huckett, CFO &

CIO, Visa CEMEA

During the implementation, BT joined

Visa and local members in negotiating with

each government, as well as participating in

joint marketing to drive new Visa member

take up. Visa says that the new architecture

is providing better security then ever before,

significantly higher availability than with the

previous network, forty per cent

improvement in response times for card

processing, and improved network visibility,

management and control capabilities.

“Most importantly, the BT network gives

the card holder a much better experience in

all 51 countries where VisaNet operates –

lifting the individual’s experience of the Visa

payment. Member banks are also much

happier with the day-to-day experience of

doing business with Visa,” says Raj Haider.

To find out more how BT's networked IT services

can help your organisation thrive, go to

www.bt.com/corporate/convergence


Helping hands

The days of separate enterprise voice and data

systems are numbered: unifying voice and data

onto a single IP-based network not only offers

compelling cost savings, but it can power radical

improvements to business processes.

Integrated communications platforms enable

enterprises to use a mix of services, from fixed line or

wireless, to email or instant messaging and audio or

video, to reach out to employees, customers and

partners in a timely, cost-effective manner.

Increasingly, the network will operate independently

from devices, enabling organisations to treat voice in

exactly the same way as any other piece of data – and

that includes integrating it into business applications.

The benefits of these technology advances are

already being put to good use by a range of forwardthinking

companies.

At financial services company Prudential, for

example, the transition to a voice over Internet

protocol (VoIP) network has not only helped cut costs

but is at the heart of a drive to improve customer

satisfaction. The company is in the process of rolling

out a VoIP network that can identify customers from

their incoming call number, and, based on previous

interactions, automatically route them to the operator

most likely to be able to help them.

High street bank Lloyds TSB is using its IP network

to improve bandwidth allocations, allowing it to use

applications previously regarded as too demanding for

its network.

For low cost airline Ryanair, the roll out of VoIP

contact centre, coupled with an upgrade of its wide

area network (WAN) is the first step in a move to a

completely converged network. Although the initial

VoIP implementation will only cover the company’s

core sites, it will eventually be rolled out to more than

100 sites across Europe. “This will deliver significant

cost savings while allowing Ryanair to grow to 34

million passengers across 19 countries,” says Brona

Kernan, head of IT at the airline.

GROWING COMPLEXITY

But the rapid rise in the introduction of VoIP networks

is also being accompanied by a similarly paced increase

in the number of technologies that are being used at

the edge of the network. Beyond the enterprise, users

will connect laptops via WiFi, perhaps even WiMax;

others will use general packet radio service (GPRS)enabled

BlackBerrys or 3G videophones. That means a

lot of technology and a lot of standards to support.

That growing complexity is one of the reasons why

Prudential, Lloyds TSB and Ryanair have all decided to

outsource some or all of the responsibility for their

www.infoconomy.com

INTEGRATED COMMUNICATIONS

MANAGING COMPLEXITY

Few companies have the capability or capacity to

manage integrated communications platforms inhouse,

but a range of suppliers are clamouring to

help out.

network improvements to a third-party specialist.

Indeed by 2010, more than half of all enterprises will

source and provision the majority of their networks

from an external provider, predicts IT advisory

company Gartner.

The sheer complexity of upgrading networks to

support converged communications is convincing

most businesses to look at outsourcing, says Tim

Bishop, head of strategy at telecoms equipment

maker Siemens. “As more complexity gets put into the

network, companies will find they don’t have the

expertise or the resources to manage it,” he adds.

In some industries, such as financial services,

investment levels in network technologies may be so

high that the appropriate skills can be found in-house;

there may also be a cultural resistance to handing over

control of the network – seen by many as a core

competitive differentiator – to a third party. But

organisations that retain responsibility for the

network are likely to be in a minority, says Rich Matlus,

research vice president specialising in IT services and

sourcing at Gartner. “Businesses are already used to

outsourcing network operations – just look at the

history of voice calls.”

But while the prospect of removing the complexity

– and the overheads – associated with upgrading

networks will be appealing, migration will still be a

painstaking process needing careful management.

continues >>

INFORMATIONAGE BUSINESS BRIEFING 2005 B25


INTEGRATED COMMUNICATIONS

MANAGING COMPLEXITY

The vision… and the reality

VISION

The drive towards a unified communications

infrastructure, based on a combination of IP

networks and mobile technologies, will enable companies

to reshape and revitalise corporate communications.

Instead of owning parts of the network, businesses

will buy services – from device independent

communications to business processes – without having

the physical costs of managing and running a network.

In this world, service levels will be the primary

mechanism for deciding costs, not metered usage.

PEOPLE AND PROCESSES

There are a number of simple steps that businesses

need to take to help them ready themselves for

converged networks, says Steve Masters, general

manager of IP Infrastructure at BT Global Services.

The initial phase of convergence is about making the

best use of your current infrastructure. That might

entail email server consolidation, or mobile cost

management.”

Matlus of Gartner agrees that going through a

process of infrastructure consolidation is essential

groundwork to enabling businesses to migrate to a

converged network in a planned, piecemeal manner.

But alongside the infrastructure overhaul, businesses

also need to take a careful look at their skill resources.

As businesses transform themselves into smoothly

efficient messaging machines, the role of many within

the IT department will change, and some roles may

disappear altogether, says Matlus. “But if you don’t

retain some of the network expertise in-house, you’re

really in no position to know what service level you’re

paying for,” he warns.

In some cases, building an enterprise-wide unified

communications system will involve purchasing

services from a large number of different providers.

These include local area network services, fixed line

connectivity, 3G and other mobile services such as

WiMax and WiFi. The upshot is that enterprises will

have to monitor and manage a wide array of service

level agreements with different providers.

Alternatively, some organisations will choose to

appoint a single lead partner to manage that complex

web of relationships for them. Telecoms providers

including BT, Cable & Wireless and Equant are,

understandably, eager to position themselves as the

prime contractor, either by offering an end-to-end

service, or by acting as the integrator, bringing

B26 INFORMATIONAGE BUSINESS BRIEFING 2005 www.infoconomy.com

REALITY

The convergence of communications requires many

skills that may not readily be found within most

organisations. As a result, most businesses are taking

a piecemeal approach to implementation. For

many, the leaping-off point is migrating legacy circuit-switched

voice networks to IP systems –

although not all are thinking about the strategic

implications of this. Many businesses, however,

remain satisfied with their traditional voice networks,

and are biding their time.

together the various components of the

infrastructure. Lloyds TSB’s VoIP implementation

includes the introduction of 70,000 VoIP-enabled

handsets from Cisco Systems, but it is BT that is tasked

with installing them.

Neil Sutton, general manager, IT Services at BT says

that to avoid conflict, the job of managing service level

agreements (SLAs) has to rest with a single company.

In some cases, he says, customers are currently

grappling with 250 separate SLAs.

But the telecoms providers are going to face stiff

opposition for this business from the systems

integrators, such as Accenture, and data centre

hosting giants, such as IBM. These companies will

offer not just to run the network or a business process,

but all the applications too.

“Businesses are going to need some sort of coalition

to meet all of their needs,” concludes Matlus, “but it is

not yet clear which companies are best positioned.”

What is certain is that there is much to play for. The

value of these contracts is likely to be vast and their

impact will be felt well beyond the enterprise sector.

Some analysts suggest, for example, that as integrated

communications platforms become more

commonplace, many employees will end up having

their personal communications services bought by

their company too. Many people, they point out,

already use their company email for personal

communications, so why not use the company instant

messaging, VoIP and other services too?

If this happens then the service providers that

control the corporate market will, by default, control

large swathes of the consumer market as well.

Article by Gareth Morgan

gmorgan@infoconomy.com

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