Addressing Convergence and IP Telephony in Enterprise Communications

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1 Addressing Convergence and IP Telephony in Enterprise Communications Introduction The convergence of voice and data networks has begun to drive radical changes in the development and delivery of products for the small and medium-sized business enterprise. The absolute goal of these developments is to someday create a single network fabric over which both voice and data are delivered seamlessly and effectively to any type of communication device. Today we are at the beginning stages of this drive toward convergence. Convergence exists as an idea in principle, but applications that currently attempt to unify traditional circuit switched networks with modern packet-switched networks provide limited advantages and a constricted scope for growth. However, it is important to consider the ways in which these products will evolve into solutions that provide meaningful business advantages. Recent trends in the telecommunications industry have focused on the development of IP Telephony systems and applications. Typically, the term IP Telephony refers to the delivery of voice over an IP network. The IP network can be as encompassing as a company like AT&T, Level 3 or MCI s network backbone, or as remote as the single-server local area network (LAN) inside an enterprise such as a small business. From the end user s point of view, an IP Telephone System (also commonly called a LAN PBX, Communications Server, or IP System) will not only allow the transmission of voice and data traffic over a single LAN infrastructure, it will also radically affect the way in which their voice communications system is deployed and maintained, as well as change the way in which it interacts with their data servers. Copyright 2001, All Rights Reserved.

2 Addressing Convergence and IP Telephony in Enterprise Communications Page 2 IP Telephony Solutions are relatively new to the industry. The first wave of IP Telephony development, which began in about 1997, was the introduction of IP Gateways for the Enterprise PBX or Key System. The second wave was the introduction of IP-based Telephone Systems in late An IP-based Telephone Station on these systems looks identical to a digital telephone, except that the voice is packetized and sent directly over the LAN via an Ethernet connection. While these early products have offered a glimpse at the potential of IP Telephony, they do not measure up to the standards for reliability, regulatory requirements, and feature functionality established by the traditional PBX and Key System. A third alternative for enterprise IP Telephony is the introduction of a hybrid, IP-Enabled Digital Telephone System. This is accomplished by enabling a traditional PBX or Key System for direct Ethernet Connection to the LAN. Although lacking the appeal of IP Gateways and IP Telephone Systems in the trade press, the IP-Enabled Digital Telephone System provides the greatest benefit at this point in the life cycle of converged products. Since the 1990s, Iwatsu has been a leader in the development of converged voice/data and computer telephony applications. We are committed to playing a major role in delivering communications solutions that leverage emerging technology that meet and exceed our customer s expectations. The purpose of this paper is to describe the current technologies in use and under development to enable IP Telephony at the enterprise level, and the economic benefits that will result from their implementation. In addition, this paper will outline Iwatsu America s strategy for development and deployment of IP-based solutions. Convergence and IP Telephony Defined Since the mid-1990s, IP Telephony has evolved from a hobby for techno geeks to an industry-altering business opportunity. Hundreds of vendors have begun to develop and offer products focused on making the term convergence a reality. The goal of convergence is to 1.) Create a single network infrastructure to replace today s separate packet and circuit switched networks. And 2.) Create products that effectively and seamless carry voice, data and video over a converged network. One such product group is IP Telephony. IP Telephony is the simultaneous and joined delivery of voice, data and video communications over any network that supports the Internet Protocol (IP). The Internet Protocol is a standard describing software that: 1.) Keeps track

3 Addressing Convergence and IP Telephony in Enterprise Communications Page 3 of the internetwork addresses for different nodes, 2.) Routes outgoing messages, and 3.) Recognizes incoming messages. Basically, it allows a voice or data packet to pass through multiple networks on the way to its final destination. This protocol typically works in conjunction with Transmission Control Protocol (TCP) and is usually identified as TCP/IP. Most LANS and WANs, as well as the Internet, use IP for transmission of data. Because of the poor quality of service over the Internet, most service providers have begun to build their own IP networks. These networks are fully controlled by the service provider, thus insuring a much higher quality of service (QOS). Physical media such as POTS lines, xdsl, ISDN and twisted pair may also support IP. The main benefit of IP Telephony is increased manageability, lower support costs, better collaboration tools, and increased productivity throughout the converged network. The Evolution of Enterprise Communications from Analog to IP Telephony Since the late 1960s, the technology that powers enterprise communications has evolved at an accelerated pace. This rapid evolution at the enterprise level has resulted from the drive to take advantage of the latest network services. This section offers insight as to how the introduction of new network services has pushed forward the evolution of enterprise communications systems. 1970s: Analog In the 1970s, voice traffic ruled the analog network. Voice communications circa 1975 consisted of a Central Office switch connected via analog trunks to an analog PBX which, in turn, was connected via twisted pair wiring to an analog or single line telephone. Twisted Pair Analog Trunk CENTRAL OFFICE Analog Telephone Analog PBX /Key System figure 1. Analog Telephone System

4 Addressing Convergence and IP Telephony in Enterprise Communications Page s: Digital / Circuit Systems, Enterprise LAN In the early 1980s, with the introduction of digital telephones and T1 trunks, digital began to replace analog in the communications chain. By the late 1980s digital communications became the norm. Voice communications at that time consisted of a Central Office switch connected via T1 trunks (or analog trunks) to a digital PBX that, in turn, was connected via twisted pair wiring to a digital telephone. The digital PBX used circuit-switching technology to make connections. A parallel development was also spawned with the introduction of the desktop PC in the mid-1980s as a stand-alone device. By the late 1980s, as PCs proliferated, most enterprise PCs were connected together via a network that was completely different from the voice network the Local Area Network (LAN). Instead of emulating the voice network by using circuitswitched technology, LANs used packet technology. As a result, most enterprises had begun to operate in an environment where their LAN and Voice Network co-existed as two completely separate and different networks. Twisted Pair Digital/ Analog Trunk CENTRAL OFFICE Digital Telephone Digital PBX /Key System PC LAN Server figure 2. Digital Telephone System

5 Addressing Convergence and IP Telephony in Enterprise Communications Page 5 Early 1990s: The Internet Begins to Change Everything Through the early 1990s, the enterprise communications paradigm of separate and closed voice and data networks remained virtually unchanged. But in 1995, with the meteoric rise of the Internet, was validated as an indispensable business tool. This led to the establishment of a new type of communications provider the Internet Service Provider (ISP). In order to connect the LAN with the Internet, another set of lines was required. As a result, most enterprises today have two separate and redundant communications systems, a circuit-switched network for voice, and a packetswitched network for data. These individual networks require two sets of wire to the desktop, two sets of hardware, the PBX and the LAN server, two sets of digital lines one for voice, the other for data, a voice communications provider and an Internet Service Provider as well as two sets of management personnel: The LAN administrator and the telecom manager. Twisted Pair Digital / Analog Trunk CENTRAL OFFICE Digital Telephone Digital PBX/ Key System INTERNET SERVICE PROVIDER PC LAN Server figure 3. Separate Voice and Data Networks Mid 1990s: The Birth of Computer Telephony and IP Telephony In the mid- to late-1990s, in an effort to bridge the gap between the voice and data networks, Computer Telephony was born. Initially, computer telephony was used to pass call event data (mainly station status, system status, and call control information) from the PBX to the LAN using an established set of

6 Addressing Convergence and IP Telephony in Enterprise Communications Page 6 communications standards primarily TAPI (Telephony Application Programming Interface) and CSTA (Computer Supported Telephony Application). This led to the idea of using the PC as the desktop telephone to make and answer calls. It also provided the first opportunity for delivering call events to LAN-based applications for the purpose of enhancing productivity and customer service. The birth of Computer Telephony and PBX to Server Communication provided significant business benefits. Among them were the ability for Screen Pop Applications and better integration of PBX and server based functions. Late 1990s: Initial Deployment of IP Telephony Early deployment of IP Telephony was used to transmit voice from PC to PC over the Internet. Another early example of IP Telephony was the transmission of voice from one digital telephone to another digital telephone via an IP gateway connected to the PBX at each end. Because these early IP Telephony solutions had to rely on the Internet, voice quality was poor. In addition, lack of standards for Voice over IP limited the viability of an IP Telephony solution. However, when IP Telephony was used over a privately managed IP network, the voice quality was virtually undistinguishable from that provided by a traditional long distance carrier.

7 Addressing Convergence and IP Telephony in Enterprise Communications Page 7 Twisted Pair Digital / Analog Trunk CENTRAL OFFICE Digital Telephone Digital PBX/ Key System Circuit CTI via Serial Connection (CSTA/TAPI) IP Voice Gateway INTERNET SERVICE PROVIDER PC LAN Server figure 4. IP Gateways Bride the Gap Between Networks Today: Development of Ethernet Telephones and LAN- Based Telephone Systems Building on the early developments with IP Gateways and Computer Telephony, a new breed of enterprise telephone system has begun to emerge today the IP- or -Based Telephone System. This new breed of telephone system, although radically different in architecture from one vendor to the next, has a common goal converge the separate worlds of voice and data communications using a completely packet switched architecture. These systems make use of IP Telephones that utilize an Ethernet connection rather than twisted pair cable. The premise is the same as a traditional digital telephone, except that voice is packetized by the telephone and sent directly to the LAN over a built in Ethernet connection. Depending upon the architecture, IP Telephones may have the ability to communicate with each other peer-to-peer. In this case, PBX functionality which resides

8 Addressing Convergence and IP Telephony in Enterprise Communications Page 8 inside the LAN-based Telephony Server, is invoked only when call control is required. (For example, during conference calls, call transfers, and voice mail transfers.) The end result is a new breed of telephone system where PBX functionality inside an enterprise resides on a LAN-based communications server, and all voice traffic flows over the LAN. Gateways are provided to connect directly to public and private IP and circuit switched networks. The LAN-based Telephone System may someday replace the traditional enterprise PBX/Key System. Today, many issues prevent wide-scale deployment including limited telephony features, questionable reliability, bandwidth and infrastructure limitations, and regulatory issues. Digital / Analog Trunk CENTRAL OFFICE IP Telephone IP Telephone System PC INTERNET SERVICE PROVIDER LAN Server figure 5. IP Telephone System

9 Addressing Convergence and IP Telephony in Enterprise Communications Page 9 Issues Affecting Deployment of IP Products The packet-based IP Telephony products available today are affected by critical development issues that affect their viability as valid business solutions. These issues are both technical and evolutionary. Before widescale deployment of IP Telephone Systems is realized, each of these issues must be addressed. Voice Quality Originally, IP was conceived as a transport protocol for data traffic, not realtime voice and video traffic. As a result, when IP networks are heavily loaded, real-time delivery of voice is affected by serious quality issues due to the lack of provisioning for voice traffic. These issues include delay, jitter, and packet loss. Delay is measured by the amount of time it takes for a packet to travel from point A to point B. High end-to-end delay will result in echo and talker overlap (the problem of one talker stepping on the other talker s speech). Jitter is the variation in inter-packet arrival time. As voice is sampled, it is separated into multiple packets. These packets may not arrive at their destination in the same sequence in which they were created because some of the packets may have taken a longer route to reach their destination. Limiting jitter requires holding packets long enough to allow the slowest packets to arrive in time to play in the correct sequence. loss occurs at times of peak loads and congestion where due to link failure or inadequate bandwidth, packets are dropped. Research shows that users will not accept a delay in voice transmission of more than 150 to 200 milliseconds or packet loss greater than 10%. There are numerous methods under development to improve voice quality in IP networks. Echo cancellers and jitter buffers promise to control delay and packet loss in IP voice transmissions. Engineering an IP network that minimizes end-to-end delay and packet loss is essential in providing acceptable quality of service. Unfortunately, poor quality of service is a common occurrence in an IP Telephone System because of the dynamic traffic loads on the LAN. Efforts are underway to improve voice quality by developing features that use bandwidth allocation techniques to reserve the necessary bandwidth required for voice traffic. In addition, development is underway to improve the efficiency of standards used to packetize and compress voice. However, the

10 Addressing Convergence and IP Telephony in Enterprise Communications Page 10 wide-scale implementation of these features is still one to two years away. During this time, progress will be made so that reliable interoperability between different manufacturers systems is assured. Interoperability Because standards for IP voice transmission have not yet matured, interoperability issues exist at all points in the IP network. Today, mainly proprietary voice compression algorithms are used to packetize voice. This means that only like devices can communicate over an IP network. Standards such as Session Initiated Protocol (SIP) and H.323 are maturing. In the future, if adopted and adhered to, a standard algorithm for packetized voice will solve the problem of interoperability between IP Telephone Systems. Reliability The traditional enterprise PBX / Key System is renowned for its reliability. To date, IP Telephone Systems have not been able to approach this record for reliability. Before wide-scale implementation of IP Telephone Systems will occur, these systems must function as reliably as the traditional PBX. While recent advancements in PC and Network operating systems have helped close the reliability gap between the enterprise PBX / Key System and the LAN-based IP Telephone System, much of the reliability problems occur at the network hardware level. These failures can be attributed to poor network design, lack of bandwidth, routing mission critical voice traffic on commercial networks that are prone to lock ups, and poor interoperability between devices. Phone System Feature Limitations Over the course of 30 years, the traditional enterprise PBX / Key System has evolved to support hundreds of different features. The large scope of available features makes the traditional PBX / Key System highly customizable to meet the needs of a business. Today s IP-based phone systems provide customers with only a small fraction of the features that a traditional PBX / Key System does. Today, businesses are purchasing IP systems for the sake of the technology, not for the depth and application of the communication features or business advantages offered.

11 Addressing Convergence and IP Telephony in Enterprise Communications Page 11 Regulatory Issues Many states are now requiring business telephone systems to provide the exact location of a caller when a call to 911 is made. This is called E-911 Compliance. Currently, vendors (including Iwatsu America) have developed features to alert a local public safety answering point of the location of a caller making an emergency call. Circuit switched telephone systems can easily report the location by associating the origination point of a call with a specific system port. There is no regulatory decree for Internet 911 at this time. If, in fact, Internet 911 does become a state mandate, IP Telephone System vendors will have a unique challenge identifying the location of an emergency caller. When Simple Network Management Protocol (SNMP) is used to report the IP address of a device on the network, a map of devices can be generated. However, a recent trend has seen Dynamic Host Configuration Protocol (DHCP) used instead to assign IP addresses dynamically. In a DHCP environment, the IP address associated with a specific device will change at random. Because of this, extra processing power will be required to create instantaneously accurate maps for the purpose of 911 reporting. This is a significant issue today that is not supported by IP Telephone Systems. Questionable Value Proposition The first IP Solutions IP Gateways and Internet Phones touted long distance toll bypass as the major value proposition. Gateway manufacturers illustrated how over 12 to 18 months, the overhead costs of gateway equipment would be paid for by the cost savings associated with routing long distance calls over the Internet for free. As long distance rates dropped, and acceptable quality of service over the internet could not be achieved, IP Gateways became a niche product best used over private IP networks. At the enterprise level, the main value proposition for IP Telephone Systems is the combination of separate voice and data networks into a single converged network. In theory, convergence promises substantial benefit for the customer location: One wire to the desktop rather than two Single point of administration Simplified integration of voice and data applications Simplified moves, adds and changes of station equipment Most companies, however, have already invested heavily in keeping their voice and data systems separate. This provides a form of office redundancy

12 Addressing Convergence and IP Telephony in Enterprise Communications Page 12 in that LAN network issues will not affect the ability to use the telephone. Concerns also exist regarding fire wall protection for the voice traffic traveling over an open LAN infra-structure. Single point administration is a true administration advantage. However, both traditional PBX systems as well as IP-Based telephone systems provide for this. Development of a Converged Network The convergence of voice and data systems and networks is rapidly becoming a reality. However, the wide-scale deployment of packet-based voice communications products will not begin to occur for three to five years. This time may be accelerated as interoperability standards evolve and the Public Telephony Network (PSTN) becomes more data-centric. Eventually, the new packet-based telephony network will carry voice and data over a common transport, operating in parallel with the existing PSTN. New switches, routers, and access devices will populate the network allowing virtually seamless crossover from the PSTN to the packet-based telephony network. In this paradigm, the transport for telephony becomes transparent. Users will not be able to distinguish, nor will they care, whether a call is routed over a packet-switched or circuit-switched network. This new network paradigm will have the power to radically alter the way in which enterprise technology is deployed. Innovative applications and business opportunities will be developed to take advantage of and exploit the integrated delivery of voice and data over a single, unified network fabric. Today, only a small subset of customers can justify a unique business need to adopt this new technology. As the network fabric, and the technology matures, new applications and services will fuel the demand for IP Telephone Systems and other packet-based voice products.

13 Addressing Convergence and IP Telephony in Enterprise Communications Page 13 Overview of Enterprise IP Telephony Products This section describes the different types of IP Telephone Systems available to the enterprise today. PC-Based PBX/Key System A PC-Based PBX/Key System consists of a Telephony Server connected to the LAN. Voice cards installed in the server are connected to standard analog telephones over twisted pair wire. Additional hardware is installed in the server to support connection to central office trunk lines. An Ethernet card provides direct connection to the LAN for computer telephony and maintenance. These systems do not use the data network to transmit voice. Basically, these are key systems ported to a Windows NT server. Characteristics: Windows NT or Unix based telephony server Standard analog telephones Benefits: Relatively low cost Standard telephone hardware Integration with network based applications including voice mail Limitations: Low reliability Limited feature set Limited connection to PSTN PSTN circuit switched ANALOG ANALOG TELEPHONY SERVER IP NETWORK figure 6. PC-based PBX/Key System

14 Addressing Convergence and IP Telephony in Enterprise Communications Page 14 IP Telephone System The distinguishing characteristic of an IP Telephone System is the fact that it provides PBX capabilities and delivers voice over the LAN. These switches, which can run on Windows NT, Unix, or a proprietary Operating System, control and distribute calls over the LAN. The stations are connected via Ethernet and may require an external power source. Typically, the stations communicate peer-to-peer and only require the telephony server when call control features such as conference, transfer, and voice mail access are invoked. Voice protocol may be SIP, H.323, or a proprietary algorithm. Characteristics: Windows NT, Unix, or proprietary telephony server LAN-based IP telephones Benefits: True IP system One wire to desktop Full integration with data network Easy administration Limitations: Low reliability Questionable voice quality Limited feature set High cost PSTN IP SYSTEM IP IP IP NETWORK figure 7. IP Telephone System IP-Enabled Digital Telephone System While the IP Telephone system is a revolutionary change to the basic voice communications architecture, the IP-Enabled Digital Telephone system is an evolution of the current model. The basic premise of the IP-Enabled Digital Telephone system is to provide LAN connectivity via an internal Ethernet connection. This Ethernet connection may then be used to pass call event data to LAN-based applications such as unified messaging systems, call accounting systems, and database applications. In addition, the Ethernet

15 Addressing Convergence and IP Telephony in Enterprise Communications Page 15 connection may also be used to send packetized voice out onto the network to an IP Station. The benefit of this type system is two fold. First, these systems ensure the viability of the traditional enterprise Key System / PBX by providing access to all of the benefits of the IP Telephone System without sacrificing features, security or quality of service. Second, because it is a hybrid system, based on the application or user requirements, both digital telephones and IP telephones are supported. Similar to the IP telephones used with IP Telephone Systems, voice protocol for the IP Telephones can be either SIP, H.323, or a proprietary algorithm. Characteristics: Traditional enterprise PBX / Key system that is IP enabled Benefits: Advanced feature set Ensures long term viability of legacy equipment Highly scalable Full integration with data network Limitations: Will likely use proprietary interface IP telephones not cost competitive with digital telephones Limited features supported on IP telephones DIGITAL S PSTN IP ENABLED DIGITAL SYSTEM IP IP IP NETWORK figure 8. IP Enabled Digital Telephone System

16 Addressing Convergence and IP Telephony in Enterprise Communications Page 16 IP Gateways IP Gateways include toll bypass products and off-premises IP extensions. The defining characteristic of an IP Gateway is that it is a point-to-point IP connection from one enterprise telephone system or station instrument to another. In addition, some IP gateways may be connected directly to the IP network to provide a reduced cost long distance option. IP Gateways accept incoming calls, packetize the voice traffic, then send it across a packet-based network using the IP transport protocols. At the receiving end, the gateway converts the packet voice back into a TDM stream and outputs the voice in the traditional manner. Characteristics: IP bridge between digital or analog telephone systems and station sets Benefits: Potential for toll cost savings Cost effective solution for remote employees Limitations: Subject to QOS of IP network Requires fixed amount of bandwidth to assure quality Dropping cost of long distance minimizes value proposition DIGITAL DIGITAL IP Gateway IP CLOUD IP Gateway PBX PBX IP CLOUD IP Gateway IP Gateway DIGITAL IP DIGITAL DIGITAL figure 9. IP Gateways

17 Addressing Convergence and IP Telephony in Enterprise Communications Page 17 IP Centrex IP Centrex is an emerging model for delivering telecommunications services to enterprise customers via a managed IP network. IP Centrex is a hosted application where the telephony equipment resides at the service provider from whom the enterprise client buys IP telephones and features such as ACD, voice mail, and unified messaging. The basic configuration of an IP Centrex application is an IP telephony server at the central office that provides basic call control and features such as forwarding, call waiting, and conferencing. These servers provide a gateway to the PSTN as well as the enterprise IP Centrex gateway. Characteristics: IP Telephones and telephony applications at the enterprise controlled by an IP telephony server located at the central office or ASP Benefits: Potential for low cost enterprise solution Highly scalable Simplified user administration Full integration with data network Limitations: Poor legacy of traditional Centrex Interoperability between vendors High cost station terminals POTS LINE CENTRAL OFFICE / ASP ACCESS GATEWAY Public switch IP Telephony Server IP S figure 10. IP Centrex

18 Addressing Convergence and IP Telephony in Enterprise Communications Page 18 Iwatsu America s IP Strategy Iwatsu America has invested heavily in IP telephony development. We have developed and are developing products that provide Real Business Benefits for our current and new customers. In the 1990 s Iwatsu America leveraged the advent of Computer Telephony to provide deliverable business benefits to our customers with our Application Productivity Suites and Computer Telephony standards compliance. Application Productivity Suites take advantage of the open communication between the ADIX and server to create business enhancing applications for several markets such as education, financial institutions, call centers, assisted living/extended care facilities, retail and hotel/motel. We are approaching the horizon of the IP era with the same philosophy: delivery of solid business benefits to our customers, both current and new, without sacrificing reliability. To accomplish this we will develop the current ADIX system for deployment of IP based functionality. Further, we will develop IP-based products and partner with other strong application providers to deliver real business solutions that will take advantage of the IP infrastructure. Iwatsu America has chosen a strategy to address IP Telephony by introducing key products as market demand matures. Currently, intensive development efforts are underway in the following key areas: IP Remote Station Gateway Iwatsu America is scheduled to release an enhanced IP Remote Station Application Gateway in early This IP Gateway will allow remote offices and / or telecommuters full connectivity of an ADIX APS digital telephone over an IP network. IP-Enabled Digital Telephone System Iwatsu America released a Network Interface Card for ADIX APS in This card provides direct Ethernet connection of the ADIX APS to the LAN. Phase 1 of this product enables the LAN with visual call control, database integration, and call event output capabilities for the creation of productivity enhancing applications. A second phase is currently being investigated that will send packetized voice over the LAN to an IP Telephone. Iwatsu has completed the development of IP-based stations utilizing SIP protocol in prototype form. These stations have been demonstrated and tested at

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