Call Waiting?

The computer phone is still a thing of the future, but IP telephony will deliver better ways to beam up to your enterprise today.
Magazine Contributor
5 min read

This story appears in the July 2003 issue of Entrepreneur. Subscribe »

It was a long time ago, in a galaxy far, far away. The Empire hadn't yet struck back, William Shatner still looked good in polyester, and most PCs ran something called CP/M.

The PC had scarcely been invented before people tried to fix it up with the telephone. One company, Convergent Technologies, hung telephones on desktop computers wired to a PBX-cum-LAN. But it turned out that computer/phone relationships require more than just a software handshake and a hardware redesign. The biggest hurdle, says telephony analyst Jeff Pulver of, an online community for the IP industry, has been the reluctance of Bell monopolies to make room on the public-switched telephone network (PSTN) for competitors.

But IP telephony entrepreneurs and users now have something Convergent didn't--the Internet. This alternative to PSTN has spawned a voice over IP (VoIP) industry that offers cost savings and service and productivity enhancements--and soon, it'll offer devices that provide new ways to beam up to the enterprise.

It's a Hybrid!
Companies like Avaya, Cisco and Mitel have pretty much perfected the PBX/LAN concept and are delivering flexible IP-based PBXes to large and small businesses. For example, Avaya's IP Office scales from two to 256 desktops. Sales of IP PBX systems jumped 66 percent last year, reports Tom Valovic, director of IDC's IP Telephony Research, and should grow 38 percent annually through 2007.

One reason: A PBX/LAN hybrid costs about the same as a traditional PBX alone, says Chris Hannifin, administrator of a 300-plus seat Cisco AVVID network for Illumina in San Diego. A single Category 5e cable brings voice and data to the biotech company's desktops, and Hannifin finds AVVID cheaper to upgrade and easier to support than separate networks.

IP telephony also improves the productivity of both IT and non-IT workers, according to Sage Research. Easier to configure than traditional systems, IP PBXes save hours every time you reconfigure work spaces or add new employees or offices, says research director Chris Neal. They're also a better fit for digital advances such as toll-free calling over the Net.

IP handsets are virtually indistinguishable from desktop phones, and because your "phone number" is an IP address, you can get calls wherever you plug in your handset--even at home. Of course, carrying your bulky office handset past your building's security guard probably won't be your first choice.

An easier way to get cheap long distance and other VoIP benefits at home is to buy a Session Initiation Protocol (SIP) phone or a device that will connect your normal PSTN phone to your PC. Individual SIP devices are still pricey, but less so when bundled with VoIP services from providers like Dialpad, Net2Phone or Vonage.

Though the shortcomings of service have been addressed, IP telephony still lacks PSTN conveniences like 911 and nationwide directory services. Those will come with more usage.

Analysts say Microsoft's just-released Windows CE.NET 4.2 embedded operating system will help by driving down development costs for a new generation of novel devices, such as Symbol Technologies' upcoming Pocket PC family. In addition to walkie-talkie features, bar code scanning and digital photography, the rugged handhelds offer wireless data and voice transmissions over different mixes of cellular, 802.11 and IP networks. Symbol already has a very portable phone that transmits over Wi-Fi LANs and IP PBXes.

Component makers like Broadcom and Intel are working on designs to bring similar capabilities to consumer markets. Someday, voice and data packets will transmit over whichever PBX, cellular network or Wi-Fi hot spot offers the best reception.

Does that mean we're headed for a be-all and end-all computer phone? Probably not--look at the lukewarm reception for smartphones and phone-equipped PDAs. Individual needs and preferences vary, and the more computing power you add for things like Net browsing, the less chance it has of fitting into the candy-bar-sized phone most people prefer.

What we can look forward to is a single transfer point for incoming voice calls, faxes, e-mail, IM and even video streams that we access using whatever device suits the occasion. The Internet is so much more efficient than PSTN that high-bandwidth applications become more viable. We may see more on-the-fly videoconferencing or voice calls telling the company server to download a price sheet or sales presentation to a client's computer, for example.

A revolution in telephony is headed our way. It just won't be arriving over PSTN.


Away from the office IP PBX? You can still dial up over the Net from home or on the road:

The ATA 186 is a $170 phone adapter that turns a handset into an IP phone. A portable IP Phone 7920 for IP PBX and 802.11 calls is now available for $595.

Dialpad Communications
IP telephony devices include a $90 Claritel-i750 handset/speakerphone that plugs in to your PC's USB port.

Net2Phone's PCI Hotline is a $75 PCI board that lets a telephone make IP calls over your PC.

Free Cisco ATA 186 adapter with voice over IP service; a $40 router may be needed for broadband connections.

Mike Hogan is Entrepreneur's technology editor. Write to him at

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