1 IP Telephony for Small Business Reduce Costs and Increase Productivity White Paper Abstract This White Paper provides and introduction to IP Telephony and its benefits to small businesses. It explains the basic concepts behind IP telephony technology, provides an overview of its benefits, and details how businesses can begin to deploy IP Telephony.
2 Introduction to IP Telephony In today s competitive marketplace, small businesses need a network infrastructure that will not only save their business money, but also enable them to be more efficient and productive. In addition, many small businesses can benefit from the employee mobility made possible using wireless LANs to support Wi-Fi telephony. Many forward thinking small businesses are rapidly migrating from traditional PBX systems, based on time division multiplexing (TDM), to systems that use IP (Internet Protocol) telephony technology. IP telephony is a technology that can help businesses move forward, get an edge on the competition, and enable them to integrate many of today s and tomorrow s network applications. IP Telephony enables businesses to leverage their people and resources while improving their bottom line. The technology can help businesses meet their voice communications requirements at far less capital costs and operational expenses than traditional voice solutions. IP telephony has the potential to completely revolutionize the way businesses work and communicate. IP Telephony or VoIP (Voice over IP) is a method of enabling voice calls to be made over packet-switched data networks such as Local Area Networks (LANs), Wireless LANs (WLANs), Wide Area Network (WANs), or the Internet. In general, this means sending voice information in digital form in discrete packets rather than in the traditional circuit-committed protocols of the public switched telephone network (PSTN). With traditional phone services, calls are made by allocating the bandwidth of an entire voice circuit to each call. With IP telephony, voice data is compressed and transmitted over an IP network. This means IP telephony uses substantially less bandwidth than a traditional telephone call and is consequently more cost-effective. There are a number of advantages with IP telephony. One major advantage is that it avoids the tolls charged by ordinary telephone service. Turning analog signals into digital data means that IP telephony can turn a standard Internet connection into a method for placing phone calls anywhere in the world virtually free (with the exception of Internet or Broadband service fees), enabling a business to bypass the phone companies entirely. In addition, IP telephony enables Telephony providers to provide less expensive phone services. Another major benefit IP telephony provides is convergence. IP telephony enables voice, data, video, and fax to be converged over a single platform and a single network. This not only cuts business operating expenses but also facilitates new communication applications to help businesses increase productivity and gain a competitive edge. Furthermore, unlike traditional analog phone service, IP telephony adds many advanced phone features for zero or no incremental cost to the owner. Standards used to carry voice signals over the IP network are commonly referred to as IP telephony protocols. After a long and at times heated debate about what protocol is best suited to replace today s PSTN telephony infrastructure, the industry has now settled on the Session Initiation Protocol (SIP), an IETF standard. While many IP telephony systems deployed in the business world as replacements for aging PBX systems still remain proprietary, carriers and ISPs have started to invest heavily in their next generation infrastructure based on SIP. Figure 2. Voice and data are converged into one network using IP telephony technology. Figure 1. Traditional PBX system based on TDM (Time Division Multiplexing). For small businesses that are starting from the ground up, building and all-ip infrastructure that can handle both voice and data has become a critical issue. Many businesses are either replacing all of their outdated PBX systems entirely with an IP Telephony 2
3 system, or are choosing to upgrade at a slower pace by strategically implementing PSTN gateways, softphones, and analog telephone adapters (ATA) as a cost-effective option as they grow, or need to replace failed equipment. Every small business will have to decide what is best on a case-by- case basis. There is no easy, one size fits all answer. The purpose of this solution brief is to familiarize a reader with IP Telephony and its benefits, and to help provide information on how to start deploying the technology. Benefits of IP Telephony So why are businesses switching to IP telephony at such a rapid pace? Acquisition costs, support costs, and maintenance costs of an IP PBX are much less than that of a traditional PBX. There are several more benefits to using this technology. Reduced Toll Costs Although toll costs have dropped dramatically in recent years, long distance charges in today s global economy are still a significant expense. With IP-based systems, voice travels over a company s private WAN or the Internet. Like surfing the web, there is no incremental cost (with the exception of Internet or Broadband service fees). No more toll or domestic long distance fees are assessed for calls within the IP-based system, and there are a wide range of low-cost calling plans for calls to standard landlines or mobile phones. A company s private data network can enable their IP PBX to reach all their branches while bypassing phone companies, so that inter-company calls are free. For businesses that are already paying for high-speed private networks, adding voice and video means more efficient utilization of network facilities. The savings can be substantial, particularly for intra-state calls. Many companies incur large long-distance bills while making calls between their multiple office locations. These long-distance charges can be substantially reduced or potentially eliminated by using IP telephony because they avoid the tolls charged by ordinary telephone service. Businesses can also save on long distance calls to clients. Many new IP telephonybased telephone systems can support IP telephony from a typical telephony services provider. That translates into decreased long-distance costs between a company and its clients. In addition, companies equipped with IP telephony may be able to eliminate the monthly service costs charged for dedicated voice services such as those carried over copper trunks or primary interface (PRI) lines. Mobility using Wireless technology Wireless LAN technology is quickly becoming pervasive for data networking, but with the availability of Wireless Switching technology and Wi-Fi Phones, this same technology that allows businesses to easily and securely access their data networks while moving throughout the facility, now allows them to use their telephones with the same convenience and security. The Wireless Switching technology provides centralized management and monitoring of the Wireless LAN, along with seamless roaming. Seamless roaming is especially important for Wi-Fi Phones, since users want to treat the phones like they do a cellular phone, where they can move around while making a call without concern for what access point they are connected to. The Wireless Switching makes the handoff from one access point to another invisible to the user. The use of Wi-Fi phones can dramatically reduce cellular phone expenses by providing employees with a phone that acts, looks, and feels like a cell phone, but has the cost structure of a desk phone. The Wi-Fi phones can be used throughout the office, as well as outside the office, anywhere there is a Wireless LAN available. Currently, many employees use their cell phones quite heavily so that they are always reachable, but this means that every minute gets billed (typically incoming and outgoing). With the Wi-Fi Phone, all calls within the IP network (for example, inter-office calls) are free, and with many VoIP plans, incoming calls are also free, while outgoing calls are either billed at a flat rate for unlimited minutes, or at a very reasonable per-minute rate. Increased Worker Productivity One of the main benefits of network convergence through IP telephony is that both voice and data can be delivered in real time to a multitude of wired and wireless communications devices. IP Telephony treats voice as if it were any other kind of data, so users can attach documents to voice messages or participate in virtual meetings using shared data and videoconferencing. With an all-ip architecture, most businesses will find that their businesses simply run more efficiently and productively. IP telephony enables new methods of communicating that are not available with standard PSTN services. There are many ways IP telephony can increase productivity. Integration with tools or Webmail enables employees to dial from their or Webmail, to send and retrieve text , voice mail, and faxes all from the same application. Incoming calls can automatically pop up the caller s information that is in an or Webmail or any other business application. All information can now be at employee s fingertips enabling them to make faster decisions and avoid time delays and errors. Employees, without any help from network administrators, can also set up Conferencing. Voice recording has now become easy to do. Recorded voice clips can now be easily forwarded to others so that they can listen to it anytime, anywhere. Follow Me features can enable an employee to have the IP phone call be forwarded to the phone at hand, be it the office phone, cell phone or home phone. An employee can prevent missing a call. 3
4 Although it may be difficult to quantify, making better decisions faster is the ultimate productivity improvement, and fundamentally, that is what convergence can bring to businesses. Some IP telephony systems offer smart unified messaging that provides text to speech conversion. Imagine a salesperson driving to an appointment and having their forwarded messages read out loud to them through their cell phone. This and other productivity enhancing features are available today, and more are being added all the time. Today, intelligent routing features automatically redirect calls and messages to the number or device where a person can be reached. Converging voice and data is also the fastest way to implement new and emerging applications, instant messaging, and collaboration across the enterprise. As IP telephony equipment providers open up their code to developers, additional niche applications are likely to emerge. Simplified Cabling Infrastructure With IP telephony, both voice and data can travel over the same line using existing data wires for voice calls. Separate cabling is no longer needed for a telephone system. This dramatically decreases the number of wiring drops needed. For businesses opening new offices, the savings in cabling and installation labor alone can be significant. Computers and telephones can use the same Ethernet ports. In addition, there is only one cable infrastructure to monitor and maintain. This can also reduce the number of Ethernet switching ports required in the network closet since phones manufactured by some vendors have multiple ports allowing the connection of additional phones and peripherals. In addition, with wireless networking, even the Ethernet cabling can be avoided, so expansion and addition of new employees, or set-up of temporary work areas is much quicker, less expensive, and more efficient. Now that both the data networking and telephony needs of employees can be satisfied using Wireless LANs, businesses have muchmore freedom to set up temporary facilities for things like short-term capacity addition or disaster recovery. Centralized and Streamlined Administration IP telephony maintenance is much easier than with the traditional phone set up. Moves, adds, and changes of a phone set just involve a change in the IP telephony database. IPbased telephone systems do not require switching units at each branch of a multi-location business. A PBX unit is no longer required at each remote branch. One IP PBX may sufficiently serve the headquarters and remote branches. Everything can be controlled and administered from one central point with a user interface that can be accessed from virtually anywhere. A small inexpensive gateway at each branch can assure smooth interoperability across the entire enterprise. Employees can even call their colleagues at other locations by dialing an internal extension, just as if they were sitting across the hall. Site visits to correct minor problems or to add or remove system features are all but eliminated. Furthermore, using IP telephony instead of traditional PBX, companies can save up to weeks when opening new offices at remote locations. Figure 4. Centralized management of all calls from different locations including branch and remote offices. Figure 3. Voice calls can be made over a private WAN or the Internet. Reduced Costs for Moves, Adds, and Changes Because IP telephony technology is primarily based on software rather than hardware, it is easier to alter and maintain. A benefit of IP telephony deployment is the ease of workspace relocation. There are substantial cost savings from faster moves, adds, or 4
5 changes. Moves, adds, and changes usually require costly service calls to service providers to physically relocate instruments and modify system software. Telephone equipment dealers will typically charge for a minimum of four hours of labor to add or relocate an instrument and reprogram system software. With IP telephony, moving the phone can be compared to the way a laptop computer is moved within a company network. Users can plug in the computer anywhere on the network and still access and documents from the new location without any intervention from an administrator. In addition, printing of new business cards and stationery are no longer required when employees move to a new area code since they can take the phone number with them, or an IP PBX can forward calls to their new extensions. Scalability and Expansion Companies that use traditional PBX (Private Branch Exchange) systems will need to add capacity to their PBX system as the company size grows. Traditional PBX based phone systems come in many size ranges and it may be necessary periodically to scrap existing systems and replace hardware. In addition to more telephones, this often requires circuit cards to add line and telephone capacity to the central switching unit and the labor costs to install the expansion boards and terminate wire at the central control unit. However, if a company s growth and size exceeds the maximum capacity of its base PBX system, then the cost of adding additional switching and control units (or perhaps replacing the old system altogether) could easily run into the tens of thousands of dollars. With IP-based systems, businesses can grow without adding any more circuit cards. Expanding an IP telephony system is less costly than with a traditional PBX system because there are no additional wiring charges. Adding new employees is as simple as purchasing additional phones and software licenses, which is much easier and less expensive than adding line cards and new cabling. System Enhancements Traditional telephony systems use proprietary architectures. The cost of adding major enhancements like unified messaging, call center functionality, or integrated voice response (IVR) to a traditional voice system could easily exceed the original cost of the entire system itself. Adding equipment or software from third parties in a traditional PBX system usually requires costly integration. Many IP-based systems today already include voice mail, instant messaging, ACD (Automatic Call Delivery), conference bridging, and notifications, along with all of the standard PBX functionality. Future enhancements can be enabled via software downloads. With the growing acceptance and adoption of interoperability protocols, businesses can expect to see a rapid growth in third party applications, many specific to a particular industry. Specific savings with IP telephony will depend on the application itself. Over time, competition from third party software companies will continue to drive down the cost of addon tools and increase the availability of IP telephony system enhancements. Flexibility Companies can deploy VPNs at much lower costs that securely use the shared public infrastructure rather than a private one, like leased T-1 lines. A virtual private network (VPN) is a private data network that makes use of the public telecommunication infrastructure, like the Internet, while maintaining privacy through the use of a tunneling protocol and security (encryption and authentication) procedures. If a company has its own VPN and combines it with IP telephony, it can set up a fully functioning remote office anywhere there is a broadband connection. In addition, the telephony costs for traveling employees can be reduced since a digital phone adapter, PC softphone, or Wi-Fi phone can be hooked up to the Internet in a hotel or hot spot for little to no connection cost. Better Customer Service Businesses can set up virtual contact centers at faster rates and lower costs to support their customers. Calls can be forwarded based on the required skills to the right agent anywhere in the world via the Internet. The right expert will be able to handle complex issues in a timely manner even when he/she is on the road. On websites, support staff will be able to just click on a phone number to dial a call. Deploying IP Telephony To realize the cost-saving benefits of IP Telephony, small businesses should consider immediately migrating to an IP telephony solution if they are opening up a new office, branch office, or satellite office. They will be able to realize immediate cost savings through reduced or eliminated toll charges, as well as reduced cost and time to set up telephony in the new office. Similarly, small businesses with highly mobile sales or service forces that demand flexibility in how their calls are configured and routed should also realize the immediate productivity benefits of an IP Telephony system. Choosing an IP Telephony System When a business decides that an IP Telephony system is the right step, it then needs to determine how much of its existing telephone equipment it is able to keep. The potential cost savings that can be had through using existing digital equipment must be considered. Many digital phone systems can be IP enabled using minor hardware additions and software upgrades. In some cases, implementing a PSTN voice gateway (trunk gateway) to an existing PBX system may be enough to enable IP telephony (see Figure 5). 5
6 will become magnified when IP telephony is introduced. To ensure success with an IP telephony system, small businesses thinking about a shift to IP Telephony should consider the following issues: Figure 5. Voice gateways can be implemented as analternative to replacing an entire PBX system. When shopping around for potential IP telephony systems, a business needs to be certaion of the features that system provides as standard and which are extra cost options. A business also needs to be certain of exactly what is included with a new IP telephony system. Many suppliers claim to includes everything businesses need, but standard components can vary from one company to another. So a business needs to be sure it is comparing equivalent systems when approaching potential suppliers. A business will also need to enquire about the compatibility of existing equipment. The technology used in many IP telephony systems may affect the implementation of existing telephone hardware. A business will also need to ensure that any devices, such as fax machines, credit card processors, and security systems, ect. can be integrated into its new IP telephony phone system. A business should make any potential vendor aware of such devices so that the vendor can provide the business with a suitable phone system for its requirements. IP Telephony Implementation Considerations and Challenges Is the LAN equipment designed to support an acceptable amount of availability? Is the LAN configured with redundancy options? Does the installed LAN equipment support QoS? Does the installed WAN support QoS? Is an isolated VLAN configured exclusively for IP phones? How are the IP phones going to be powered? Can the IP Telephony traffic traverse certain firewalls and NAT devices? Is mobility desired, and if so, is the WLAN sufficient? In an IP telephony deployment, the sources of trouble are not always as obvious as with a PBX deployment. The clear-cut decisions mostly center on IP telephony-specific products such as IP phones, IP PBXs, and voice gateways, but weaknesses in a data network Perform an electronic network assessment that includes utilization and network statistics.. The assessment of a company s network should be conducted prior to any purchases. This will help determine if a network supports Quality of Service (QoS) and what hardware upgrades may be needed. It also simulates IP telephony traffic to demonstrate the effect it will have on other network functions. Maximum, minimum, and average metrics for bandwidth consumption, latency, jitter, and packet loss should be included in your audit. In the case of bandwidth utilization, a common source of potential bottlenecks lies in the inter-switch links that make up your backbone. Estimate bandwidth requirements. Most value-added resellers and integrators have tools to help you calculate how much voice traffic is currently carried by your voice network, both incoming and outgoing, on a per-station basis. If you prefer to arm yourself with your own calculations, find it in your existing PBX system. Most have reporting capabilities that yield utilization information. Have a good transition plan.. IP telephony systems differ considerably from the conventional PBX telephone systems. A PBX system is managed through a telephone set or terminal, while IP telephony is managed via a GUI interface on a PC. Someone on the IT staff or elsewhere in the office will need to learn how to maintain the service. Have a strong knowledge of both data and voice networks and appropriate IT support.. While a company with IP telephony may not need separate voice and fax circuits or separate telecom and IT departments, it will need to integrate voice/voip experts into its IT operations to redesign the Internet backbone for voice, and to help manage and maintain the new converged IP telephony and data network. Choose a system that will grow with your business.. Because the technology changes rapidly, it must: 1) be easy to upgrade 2) have ample bandwidth and connectivity 3) include a plan to integrate Session Initiation Protocol (SIP), which provides the framework for delivering voice, video, data and wireless services seamlessly and transparently over a common network, and 4) come from a reputable vendor with staying power. Review network hardware for necessary feature support and correct configurations.. Ethernet switches that will be used in the IP telephony system should support virtual LANs. This will allow segmentation and isolation of your voice traffic across the data network. IP-based quality of service (QoS) such as type of service (TOS) or Differentiated Services (DiffServ) should 6
7 be supported on all hardware including network switches and IP phones. Survey the Wireless LAN for capacity and management capabilities.. If mobility is important, a wireless switching system should be implemented to manage and secure the wireless LAN, and to enable seamless roaming. Build in network redundancy.. Businesses cannot afford to lose phone service or have any downtime. With IP telephony, network redundancy is a must-have to get the network back online and to maintain both and phone service. In order to use VoIP during a power outage, an uninterruptible power supply or a generator must be installed on the premises, and the desk phones should be powered using Power over Ethernet. For more information about IP Telephony products by D-Link please visit the D-Link website at: Or contact D-Link directly: Ask for the Systems Integration Team! Send us an to Or call us at (888) DLINK-SI ( ) Faxing: (866) We look forward to building networks with you! Secure your IP telephony traffic.. Treat your IP-based PBX with at least the same diligence as you would any mission-critical server. VoIP equipment vendors have also begun to add security features to encrypt media streams. Consider implementing Power over Ethernet (PoE) to deliver inline power to IP phones.. Businesses using PoE can create an integrated data, voice, and powered network. Deploying PoE switches or midspans is a cost-effective alternative to installing additional power outlets, and with a carefully designed system, phone coverage during a power outage can be provided. While IP Telephony traffic can travel over the same network lanes as data currently does, it is a new application with new rules. Deciding on the right IP telephony solution is just the beginning; deploying it on the network properly is the real task. Knowing your network, ensuring the quality of your voice traffic, making sure your network and personnel infrastructures are up to the task and properly protecting your IP Telephony system will help ensure a successful deployment. D-Link provides a wide range of products to create a state of the art IP Telephony system including both wired and wireless switches, SIP Gateways, IP-PBX servers, wired and Wi-Fi IP phones, and Analog Telephone Adapters. Prices and specifications are subject to change without notice. D-Link and the D-Link logo, trademarks or registered trademarks of D-Link Corporation. All other company or product names mentioned herein are trademarks or registered trademarks of their respective companies. Copyright 2006 D-Link Corporation/D-Link Systems, Inc. 7
8 D-Link IP Telephony DIV-140 Analog Trunk Gateway with 4 FXO Ports DVX-1000 SIP IP-PBX with Conferencing Server Express EtherNetwork Business IP Phone Wi-Fi Phone DPH-140S DPH-540/541 Broadband Phone Service VoIP Router Wireless Broadband VoIP Router DVG-1402S DVG-G1402S VoIP Phone Adapter Broadband Telephone Adapter with Vonage DVG-2001S VTA-VR DPH-50U Skype TM USB Phone Adapter DXS/DWS Port Stackable Gigabit Wireless Switch + 10 Gigabit Uplinks DXS/DWS Port Stackable Gigabit Wireless Switch + 10 Gigabit Uplinks DXS/DWS-3227P 24-Port Stackable Gigabit Wireless Switch with PoE + 10 Gigabit Uplinks 8-Port Wireless Switch with PoE Wireless Switch Dualband Access Point DWS-1008 DWL-8220AP 8