all-in-one network not only offers savings in communications
cost but also offers many value-added services. That's
why more enterprises are upgrading their WANs for voice
over IP has been the buzzword this year among most Indian
enterprises. VoIP isn't new, but it's only in the last
couple of years that it has gained prominence here.
With the government loosening certain restrictions on
VoIP usage in April 2002, most Indian enterprises have
been focused on voice-enabling their IP networks.
This huge interest in Voice over IP is clearly reflected
in our research findings. The survey statistics reveal
that the biggest slice of the IT budget is allocated
for Converged Networks (this comprises of voice and
video over IP).
This is understandable. In the recent past, amongst
the economic downturn and slow growth registered by
most companies, one of the few ways to squeeze more
profits is by cutting costs. And voice communications
is one area where costs can actually be reduced significantly.
According to an industry estimate, 70 percent of a company's
communication costs are in the form of intra-office
STD bills. By implementing a VoIP solution a company
can actually reduce intra-office communications costs
by as much as 60 percent. After voice, the next step
is Video over IP networksa cost-effective video
In both cases, voice and video packets are transported
over an existing data network (the corporate WAN). This
concept of 'Converged Network' seems attractive because,
with minimal additional investment one gets the benefit
of voice and video as well.
Besides cost savings VoIP also presents value-added
services like integrating voicemail, video, e-mail and
fax (universal Inbox). Another advantage is that when
it comes to voice, IP networks are easier to maintain
than switched networks.
VoIP becomes cost-effective for enterprises that already
use leased lines on a WAN. Enterprise VoIP solutions
make sense if inter-office communication bills exceed
Rs 50 lakh, says an industry analyst.
this survey, we considered VoIP and Video as the two
main infrastructure segments for Converged Networks.
From the survey IVR (Interactive Voice Response) emerged
another focus area for enterprises.
About 97 percent of the survey respondents (who have
Converged Network as their focus area) have registered
an increase in their requirement. The average rate of
increase in requirement for Converged Networks is 63
percent. This is the highest average among all technology
As expected, 83 percent (this also includes those upgrading
their existing VoIP infrastructure) of the survey respondents
said they have a requirement for VoIP in 2002-03 while
53 percent have already invested in VoIP. About 47 percent
of the respondents have expressed their interest in
video on the network and 43 percent said they have existing
infrastructure for video. From
this we can infer that CIOs are definitely aware about
the benefits of VoIP and video on existing networks.
Vendors have anticipated this requirement much in advance
and the market is flooded with VoIP solutions. There
are IP phones, VoIP gateways and interfaces available,
and network integrators can tie all this into the existing
enterprise WAN. One can choose either an end-to-end
solution or just voice-enable existing routers and interface
these with existing EPABX equipment.
This huge interest in Converged Networks is also reflected
in the investments that enterprises are making in this
area. As mentioned earlier, our survey statistics reveal
that the biggest slice of the enterprise IT budget is
for Converged Networks. On average, companies have allocated
Rs 368 lakh for implementing Converged Networks.
There is an interesting trend here. Despite government
restrictions on VoIP, the budget allocated for Converged
Networks was significantly higher last year, about Rs
508 lakh, as compared to this year (Rs 368 lakh). This
implies that most companies have started implementing
VoIP solutions last year itself, even before the government
removed certain restrictions on the use of VoIP in enterprises.
Prior to April 2002, VoIP was only allowed over a private
Though the average amount allocated for Converged Networks
has reduced this year, it is still the highest among
the other IT verticals.
The data also reveals a sizable chunk, about 37 percent,
of the companies have allocated up to Rs 25 lakh on
Our survey indicates that VoIP usage is the highest
in the Banking/Services sector.
About 67 percent of respondents from the Banking/Services
sector said they already have an existing VoIP setup.
For 2002-03 the requirement for VoIP is the highest
in the IT/Telecom sectors closely followed by the Banking/Services
sector. Around 89 percent of the respondents from the
Banking/Services and 91 percent from the IT/Telecom
sectors said they have a requirement for VoIP.
As for video, 64 percent of IT/Telecom companies said
they used video over IP networks and 60 percent of respondents
from the manufacturing sector said they have a requirement
Real cost saver
While IT Heads are aware of the benefits of Converged
Networks, the key factor driving growth here is cost
savings. In the survey, three out of four respondents
said they were going for a VoIP or video conferencing
solution in order to save costs. Converged Networks
will be more common as enterprises realize the ROI and
We are already seeing an influx of vendors and network
integrators offering VoIP solutions. With increasing
competition, we can expect equipment costs to fall further.
Vendors are aware that enterprises want to protect their
investment in communications infrastructure, so they
will offer solutions that interface with legacy communications
equipment. For instance, existing switches or routers
that can be voice-enabled by a minor software or hardware
Companies with huge communication overheads, or customer-service
oriented companies like Call Centers will be the major
adopters of Converged Networks.
biggest slice of the IT budget is allocated
for Converged Networks
83 percent of the survey respondents
said they have a requirement for VoIP in 2002-03
Three out of four respondents are going
in for VoIP or video to save costs
VoIP usage is the highest in the Banking/Services
VoIP becomes cost-effective for enterprises
that already use leased lines on a WAN
The average rate of increase in requirement
for Converged Networks is 63 percent, the highest
among all technology groups
Most companies started implementing VoIP
solutions last year itself, even before the
government removed certain restrictions on the
use of VoIP in enterprises
5 benefits CIOs SEEK
Better customer service
Faster business decision making
Ease of deployment