Better solutions can elicit more interest in Convergence
Interest in Convergence technologies is low, but this is
expected to change with the introduction of more efficient and affordable solutions.
by Brian Pereira
It has often been said that convergence of voice, video, and data networks
can result in significant cost savings. The applications, mainly VoIP and Video
Conferencing, and the benefits they bring to business, have been the main reasons
for investing in this area.
But Convergence has been the least significant area of interest. In fact the
base is just 57 companies (out of the 254 that participated in this survey).
Overall, not many companies (18 percent) have invested in Convergence. Last
year just 14 percent invested in Convergence and 13 percent plan to do so this
The bandwidth crunch as well as QoS and technology issues have left a bad taste
in the mouth of those who have used convergence solutions. This has prompted
most companies to wait for better technology. The waiting period might soon
end as more efficient connectivity solutions such as 10G Ethernet over copper
and MPLS are around the corner.
High-speed core networks with a MPLS backbone will resolve the bandwidth issue.
The same can be said for 10G Ethernet technology. MPLS can also offer consistent
QoS markings for converged networks.
The survey found that those who have invested or plan to invest in Convergence
plan to step up investments in the coming year. On average, they spent 11 percent
of the IT budget on this segment in the last one year, and plan to increase
that to 14 percent in the next one year.
On average, the FMCG/consumer durables company is likely to spend 25 percent
of its IT budget on convergence in the next one year. The number of shopping
malls and retail outlets, especially in urban areas, is growing at a high clip
and much investment is going into infrastructure.
Speaking in IP tones
It makes acute sense for enterprises with several branch offices to invest in
VoIP. The savings on internal calls can be phenomenal. For instance IDBI Bank
uses IP phones for communications between its various branch offices. In 2002
it saved Rs 5 lakh on internal calls.
Besides cost savings, VoIP phones offer many convenient features that corporate
executives will appreciate.
56 percent of the respondents have VoIP infrastructure and 33 percent plan to
invest in this technology.
The average number of users for VoIP within enterprises is 39. The cost of IP
phones may be perceived to be high. Could that be the reason why few users within
an enterprise actually get to use an IP phone? According to the survey, 37 percent
of the respondents say there are less than 10 users and 31 percent say they
have between 10 and 50 VoIP users in their organization.
Messaging killed the video star?
When Video Conferencing was introduced in the corporate world, vendors spoke
about how it would cut down travel expenditure, not to mention negating travel
time. The idea was to facilitate group communications across distant locations.
However, almost the same functionality can be had at a fraction of the cost
using Internet technologies such as instant messaging. Online services now offer
free IM tools that are now video enabledusers just need to invest in a
26 percent of the bases of convergence users have invested
in video technology and 24 percent plan to do so. The average number of users
for Video is just six.
- Last year 14 percent invested in Convergence; 13 percent plan to
do so in 2004-05.
- On average, companies spent 11 percent of the IT budget on Convergence
last year and plan to increase that to 14 percent in the next one year.
- Of those who have invested in Convergence, 56 percent invested in
VoIP and 26 percent invested in Video conferencing.
- 33 percent plan to invest in VoIP and 28 percent plan to invest in
- One needs to consider
the benefits of convergence technologies before adopting either VoIP
or Video Conferencing.
- Before implementing VoIP,
think if your existing network infrastructure can support it. In certain
cases one may have to upgrade the infrastructure to ensure decent voice
- One may have to invest
in Quality of Service (QoS) tools to ensure optimal voice quality where
the usage of VoIP is high.