Summary

As recently as the 1970s, business communications could be summed up in two words: Ma Bell, which supplied a single network that connected us to the world.

Today, we communicate by email, instant messaging and audio/video conferencing. Many people work from offices, but many others work from home or on the road. Multiple networks have replaced the single network. Managing business communications is more complex, and the risk of technological obsolescence has increased significantly.

Observers agree that the future of business communications lies in packet-based
technology, which allows voice, data and video to travel over a single
connection. This approach simplifies management, reduces costs and
provides a flexible platform that enables future communication needs to be
met quickly and with less expense.

As this trend (known as “convergence”) becomes more common, business
communications will be back where it began, with a single network handling
all forms of communication.

The Age of the Single Network
Until quite recently, business communications relied on circuit switching
through what is known as the Public Switched Telephone Network (PSTN).
Whether phones were analog or digital, the PSTN connection was supplied by
a single provider – the telephone company.

The 1970s were the years of analog telephony. Communication consisted of
telephones that were connected by a twisted pair of wires to a key system or
PBX. These systems were connected over trunks to a telephone company
Central Office switch and then to the larger PSTN. Although expensive, it
made use of the best technology available at the time.

Digital phone systems appeared in the early 1980s. These systems enabled
significant improvements in voice quality and telephone functionality, but did
not change the fundamental structure of business communications. The
single network – the PSTN – still dominated.

The Age of Multiple Networks
Personal computers began to appear on office desktops in the 1980s. The PC
led to greater productivity, but it was a stand-alone device that could not
communicate with other machines. As PCs proliferated, the idea of
connecting them together gained momentum, resulting in the Ethernet. By
1990, most PCs “sat” on a network that was completely different from the
voice network: the Local Area Network, or LAN. Soon, Wide Area Networks,
or WANs, connected the LANs to the outside world. The age of multiple
networks had begun.

The Internet
Nothing has shaken the world of business communications like the Internet.
Voicemail and paging came along, but it was not until 1996 that that the
Internet brought such indispensable tools as email and instant messaging to
the desktop. Another new type of telecommunications provider – the Internet
Service Provider, or ISP – soon developed.

Now companies had as many as four networks to manage:

• Circuit-switched (PSTN) network for voice
• LAN
  
• WAN
  
• Internet

The Beginning of Convergence
Installing and maintaining separate networks is not cost-effective. They
involve a great deal of redundancy because they require:

• Two or more devices on the desktop – PC, telephone, fax, etc.
• Two infrastructures – one for voice and the other for data
  
• Two or more sets of hardware – PBX or key system for the telephones;
  router, switch, etc. for computers
  
• Two or more sets of lines to the outside world
  
• Two or more network services providers – for local calls, long distance
  calls, and data/Internet access
  
• Two sets of staff – one for voice and the other for data

Multiple networks make managing business communications far more
complicated than it should be.

In the late 1990s, in response to the problems created by multiple networks,
the idea of routing voice and data over a single network began to gain
momentum.

1997 – Voice over Internet Protocol (VoIP) Gateways
VoIP¹ technology was introduced in 1997 and began the move toward a
convergence of the separate worlds of voice and data.

The first business-ready VoIP solution was the VoIP gateway. VoIP gateways
are computers or other devices that turn voice signals into packets that can
be sent over an IP network. Gateways have T1 or ISDN interfaces to the
PSTN (usually via the key system or PBX) and an Ethernet interface on the
IP side.

Gateways enable companies and organizations to cut long distance costs
or even avoid long distance tolls entirely. In a toll bypass solution, calls
between offices are routed as VoIP calls, completely eliminating the
involvement of the regular telephone system.

VoIP gateways have an additional advantage in that they do not require that
“legacy” key systems or PBX equipment be replaced. However, this is a
double-edged sword: Key systems and PBXs can be costly to maintain and
upgrade, and they cannot provide the features that a complete IP voice
solution can offer. This approach still depends on the PSTN, if only for local
calling.

1998-1999: The IP Telephone and IP-PBX
Beginning in 1998, IP telephones began to take all of this a step further.
IP telephones look and function identically like digital telephones, except
that the voice signals are turned into packets by the telephone (rather than
the VoIP gateway) and sent to the LAN over a built-in Ethernet connection.

In 1999, several vendors introduced IP-PBX solutions. This solution further
simplifies business communications and provides the platform necessary
for a truly converged communications solution.

Now, companies and organizations no longer need multiple separate network
infrastructures – one network with one set of equipment can handle it all.
For the first time since the 1980s, the amount of equipment needed to
provide business communications could actually be reduced.

An IP telephone/IP PBX solution brings other new benefits. This technology
reduces the costs of moves, additions and changes; provides support for
telecommuters; and enables seamless dialing between offices in a multiple
office environment. In addition to “hard phones,” there are also softphones –
software that emulates an IP phone and that is installed on a PC.

PCs and telephones connect directly to a single infrastructure – the LAN –
and the LAN connects to the local environment via a single packet
connection (T1, DSL, wireless, CATV, etc.). The elements needed for
convergence in business communications are now in place.

Barriers to Convergence
What stands in the way of this new world of business communications?
Not technology. The technology required to make converged networks a
reality exists and has been proven in production environments.

The most important barrier is the ubiquity of the PSTN. In theory, the
traditional telephone system is obsolete – IP can perform all the functions of
the PSTN, and indeed, many more. However, IP networks do not have the
same universality as the PSTN. Until they do, there will continue to be a
need to connect the IP voice system to the PSTN, at least for local calls.

Another barrier is IP voice quality and reliability. For the most part, this
concern is based on the fact that convergence has come to be equated with
the public Internet. For all of its benefits, the public Internet is not quite
ready. However, a great deal can be done today to make VoIP quality equal
to the traditional phone system.

The Future of Converged Networks
So where is all of this heading?

One day, all voice, video and data traffic will travel on IP networks and use
one platform. No one knows exactly when this will occur, but it is a reality
that is not disputed even by the most pessimistic detractors of converged
networking. One day, the LAN will have devices that will enable all forms of
communication, whether wireless or wireline. From a networking
perspective, the line between voice and data will be blurred – and even
obliterated.

The idea of convergence is powerful, beautiful and elegant. It has captured
the imagination of such visionaries as George Gilder, who speaks poetically
about it in his best-selling book Telecosm: "When anyone can transmit
any amount of information, any picture, any experience at any time,
instantaneously without barriers of convenience or cost, the resulting
transformation becomes a transfiguration."

Once convergence is a reality, business communications will have returned
to where it began: A single connection will meet all of our communications
needs.

¹ VoIP (voice over Internet Protocol) refers to making a call over the Internet. IP telephony
refers to IP-based calls that have features such as those one finds in a PBS or key system –
call waiting, call transfer, voicemail, etc. Finally, IP communications means the use of IP to
bring voice, video and data communications together on a single network and platform.