Unsupportable Optimism

By Baselinemag  |  Posted 2005-12-14 Print this article Print

Boeing will scrap 125 old phone switches as part of one the world's biggest IP telephony projects. Will the new system fly right?


Jay Lassman, a research director at Gartner who specializes in enterprise IP telephony, thinks Boeing is being optimistic.

He wonders what hidden costs the company will encounter that it didn't factor into original estimates, such as the labor involved in software upgrades.

Lassman also questions the assumption that maintaining a mixed-vendor network is 20 percent more expensive than a single-vendor one.

"How do they know that? That's the Cisco pitch," he says, pointing out that even if such savings are realized, being tied to one supplier carries its own risks.

Finally, he adds, there's no guarantee Boeing's data network will be able to handle the phone traffic generated by 160,000 employees since it may not have been originally engineered to handle voice.

"Companies jumping into IP telephony whole-hog have really relied more on faith than on business reality," Lassman contends.

Naughton, for starters, is fully confident the network will hold up. "Voice is a very efficient protocol, in our view," he says.

Of the 18 petabytes (18 quadrillion pieces of data) that traverse the Boeing backbone network per month, he says, voice amounts to less than 1 percent.

Also, Boeing isn't forever tied to Cisco. The airplane maker's IP telephony contract with Cisco runs for three years, through 2007, with options for two one-year extensions.

By then, industry standards could let Boeing use other vendors' phone equipment in its network. For example, with the SIP (Session Initiation Protocol), a standard for setting up Internet-based phone calls, any SIP-compliant phone should be able to work with phone switches that support the specification.

Ultimately, according to Naughton, Boeing's business decision to move to IP telephony globally was based on the realization that a growing number of its older telephone switches have been phased out by vendors.

It calculated the cost of sustaining existing phone systems instead of migrating to IP telephony.

While Naughton wouldn't disclose that cost difference, he notes that over the long term it becomes much pricier to keep older technology running. "We know we can't leave the environment static," he says.

Story Guide:

  • Talking Points: After years as an also-ran, VOIP is in the front ranks of business tech.
  • Leap to IP Is Still a Tough Call Despite advantages in cost and maintenance, it still takes a leap of faith to migrate, and a lot of determination to sell the idea to decision makers.
  • No Killer App, But Lots of Small Enticements Smallish efficiencies and the increasing number of apps aimed at particular businesses build up to make a good case for VOIP.
  • > Boeing's Jumbo Phone-System Overhaul: Boeing moves 125 phone switches to IP, in what may be the largest corporate migration to date.
  • Non-Trivial Migration: 35,000 Users, 125 PBXs, Clusters, Servers…
  • Cutting Costs; Admirable ROI: 49 percent over seven years.
  • Unsupportable Optimism? Some analysts say Boeing and other companies may be ignoring potential downsides.
  • Cost Analysis: Functionality aside, do the costs justify a migration to VOIP?

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