Cisco's voice-over-IP solution could lure feds

New voice/fax-over-IP software and hardware for Cisco Systems Inc.'s 3600 Series routers may save money for federal customers allowing them to offload voice and fax traffic from expensive voice lines onto their existing data infrastructures. Likely beneficiaries include agencies with a mix of wide-area network technologies - such as frame relay leased lines and Integrated Services Digital Network - and those aiming at extending voice capabilities to the desktop the company said.

Cisco expects to have the new option on the General Services Administration schedule within two weeks of its general commercial availability in late December said Jim Massa director of Cisco's federal operations Herndon Va. The company's GSA pricing typically runs about 24 percent below list he said and list pricing will start at $625 per port.

After its GSA schedule release Cisco expects to add the technology to all of its more than 100 federal contracts starting with governmentwide vehicles such as NASA's Scientific and Engineering Workstation Procurement II and the National Institutes of Health's Electronic Computer Store 2 Massa said.

A key attraction of the voice-over-IP technology is the potential cost savings according to Cisco. The phone bill for faxes alone amounts to about $27 billion a year on the public switched network (PSN) the company said. Organizations could see as much as 10 percent savings in phone bills per year.

In addition voice quality - while not as good as the PSN's - will be superior to what is available from competitors with Internet voice products said Ian Pennell director of marketing for Cisco's Network to User business unit San Jose Calif.

As part of the Cisco solution voice software and boards can be installed into an office's gateway and connected to its outside data network Pennell said. Phones and faxes can then be connected to the gateway which will take calls and route them across the data network "going anywhere the data network can go " he said.

A router equipped with matching capability would also be necessary at the other end.

The voice modules moreover are independent of underlying network technologies so the technology would work equally well on Asynchronous Transfer Mode frame relay or Ethernet Cisco said.

In the first iteration of the IP voice capability a 3600 router will take one to three interface cards each capable of handling up to four phone lines Pennell said. This will support the interoffice communications of 30 to 40 people. Cisco plans enhancements some time next year that will support up to 60 lines per 3600 unit.

Alternative PC-based technologies can result in 400-millisecond delays in voice processing which degrades quality Pennell said. Cisco's offering by contrast will result in delays of 200 milliseconds or less.

The company expects agencies such as the Internal Revenue Service with multiple interconnected sites to be interested. Civilian agencies may be more oriented toward fax communications whereas the Defense Department may lean more toward voice Pennell said.

Cisco is jumping into a "very crowded market " said Brett Azuma director and principal analyst with Dataquest San Jose. He has identified 12 other companies offering voice for data networks including NetPhone Inc. Marlborough Mass.

Cisco's advantage apart from brand recognition is its potential to rapidly deploy voice-over-IP technology over its installed base according to Kenneth Landoline area analyst for Giga Information Group Santa Clara Calif.

There is a huge market to be tapped analysts said. Worldwide capital expenditures on voice messaging PBX and key systems are expected to reach $45 billion by 2000 Azuma said.

But analysts cautioned that the market may not be everything some industry vendors are making it.Users will not be throwing away PBXs but they could possibly "offload overflow traffic " Azuma said.Landoline said he believes the cost-cutting potential is a "good concept " but it will not be as big as proponents say. Not all voice calls will be ready for transmission over a data network until voice quality is proven.

"The biggest issue is latency" because this affects the naturalness of a conversation Azuma said. He estimated the Cisco technology's delay time at 200 to 250 milliseconds compared with that of the PSN which comes in at well under 100 milliseconds.

-- Adams is a free-lance writer based in Alexandria Va.