“As business people we make shin guards, distribute cat food or evangelize, but should we consider VoIP? Will it make us more money or save us time?” -Dennis Schooley

So what is all this VoIP hype anyway? I mean that we all know that our voice can be transmitted to the four corners of the world through telephone lines. (Actually, I missed that part of second grade math where they taught us that a ball has corners, but everyone says so, so I’ll take it.) Alex G. Bell, the second most famous resident of Brantford, Ontario, right after Wayne Gretzky, of course, led us down the path of voice transmission.

We are also fully aware of the Internet. Otherwise, where would we get our sports scores, weather reports, horoscopes, and genealogy corrections? So why do we care about real-time transmission of our voice, in telephone quality, using Internet Protocol (VoIP)?

Presumably, the whole concept was created to bring some benefit to the techno-ignorant inhabitants of the home of the masses. As business people, we make shin guards, distribute cat food, or evangelize, but should we consider VoIP? Will it make us money or save us time? Will it make us more efficient as manufacturers, distributors or evangelists? If the answer to those questions is no, then we shouldn’t even think about it. So let’s explore those questions. After all, it’s about results.

Geoffrey Moore introduced the concept that a product must cross the gap of market acceptance in the ‘Lifecycle of Technology Adoption’ in his book Crossing the Chasm. In his next book, Inside the Tornado, Moore talks about the market acceptance tornado that lies like a siren beyond the abyss. It appears that VoIP is climbing the farthest wall of the abyss, but we don’t know for sure if it will find that grip to crawl around and catch the eddies of the tornado winds of fortune. All indicators are that it will happen. Dorothy and the Tin Man are holding their breath.

Perhaps the most significant indicator is that ‘business prevention specialists’, a title that I usually reserve for lawyers, but which in this case lovingly applies to the Federal Communications Commission (FCC) and the Canadian Radio, Television and Telecommunications Commission (CRTC). , have begun the task of investigating what should be regulated in the world of VoIP. The FCC has already ruled on a VoIP product offered by AT&T. That fact in itself should make us all realize that there must be something good to come, or they wouldn’t show up at the dance to make sure the band isn’t too loud.

Larry Stocker of Schooley Mitchell Telecom Consultants in Kansas City says, ‘If my clients’ interest in VoIP is an indicator, then I think there will be a big increase in service provision. We have quadrupled our number of assignments in the last six months alone, for customers who want to select the right VoIP service, at the right price, from the right provider. That seems to be a good indicator of market acceptance.

Another good indicator would be the number of providers, including top-tier telcos that have entered the fray to offer VoIP in their own particular flavor. That fact should pause us. It should make us question the original premise that “EUR ~ Internet talk will be free” and that there will no longer be long distance costs. If that were the case, would all these big companies, the renowned leaders in the telecommunications world, be struggling to get to market to provide the service? Maybe it’s just their way of giving back to society. I am more inclined to think that there are huge winnings at stake.

And now you say, ‘but I already have internet, why isn’t it free?’ Well, first of all, you will need some kind of device that offers “phone quality” over the Internet. Remember, I said ‘real time’. Those $ 20 mics just don’t work. Also, have you ever tried putting someone on hold on the internet, forwarding a call, or receiving a voice message that you know, the things that companies do every day?

Presumably that’s what all of these vendors are looking to sell you those ‘things’ at the end of the race. Whether they sell it to you outright or rent it to you for a monthly service fee is not the point. The point is, there is a cost to get access as well as the proper business applications. Included in the cost, which will be recovered through charges to you, are signaling, routing, protocol and interface technologies. Wow, that’s not lay talk.

Presumably that’s what all of these vendors are looking to sell you those ‘things’ at the end of the race.

In addition to the access “stuff”, as a layman would say, there has to be access to the Public Switched Telephone Network (PSTN), or I could never call my mother. VoIP calls have to end on phones every day because I’m pretty sure my mom doesn’t have a VoIP set up at home. She doesn’t have a bank card, won’t be staying at a hotel that doesn’t have ‘real keys’, and she still loves her dial phone (definitely on Moore’s tech buying group called Skeptics or Laggards). There is no way you can talk to her over her internet connection, she doesn’t have one and she never will. So this VoIP thing will have to access the normal phone system. That’s where the FCC and CRTC come in. Their position is that if the PSTN is accessed, the providers will have to pay the access fees. And the cost goes up.

In his book Implementing Voice Over IP, Bhumip Khasnabish says “The goals of VoIP implementation are to achieve (a) significant savings in network maintenance and operational costs and (b) rapid deployment of new services.”

Okay, so it’s not free, but there should be ‘significant savings’ if that’s true. Assuming those savings will pass through, it should make me more money through cost reduction. Presumably these ‘EUR ~ new services’ will be designed to save me time, make me more efficient, or provide easier access to my target markets. Just think if a step in shin guard making can be eliminated, if cat food distribution channels are simplified, or if the evangelist can find more pagans to convert.

Bill Webster, another Schooley Mitchell consultant in Calgary, Alberta, says, “The key is to assess the reliability and quality of service. If quality is what you need, and by the way, it is improving every day, then an analysis of cost benefit you need to compare your current VoIP access. Often times, VoIP is the winner. As new VoIP services become available over time, that advantage will become even more apparent to the typical business person. “

So there you have it. Should I or shouldn’t I, as you query the title? It seems that the answer is similar to; Should I or shouldn’t I? When Alexander Graham first introduced the concept of the telephone. I’m pretty sure everyone, at least the ones alive today, eventually got one. Bell also had to deal with stragglers.

It looks like this is the way the market will develop if the regulatory and supply indicators hold true. VoIP has yet to come out of the abyss, but when so many providers enter the arena, functionality increases to deliver the ‘best mousetrap’, price is lowered through competitive alternatives, reliability (bugs are solved) is push by the same forces, and you have an emergency.

It seems that if you follow Webster’s advice and prepare the proper cost-benefit analysis, you are likely preparing your kite for the VoIP tornado.

Copyright Schooley Mitchell Telecom Consultants 2004