Cisco enters corporate IP telephone market

When a start-up company launches an Internet telephone system it is an

interesting phenomenon. When $555-billion Cisco Systems brings such a system to

market, it could well signal a communications revolution. It was less than a

year ago when Cisco chief John Chambers told his engineers he wanted the

traditional telephone on his desk replaced with an Internet phone hooked into

networking equipment that handles both voice and computer data over a single

network.

Cisco this week delivered just such a new TCP/IP-based business office

telephone system that will let companies transmit voice and computer data over a

single network using the Internet protocol (IP) standard. The new system will

allow Cisco to compete more effectively with Lucent and Nortel networks in the

market for "convergent systems," equipment that combine voice, video

and data in a single network. Cisco, analysts say, now appears to have the

technological edge over Lucent and Nortel in that market.

"Cisco's product line in a number of ways was deficient in terms of

handling voice calls, call center applications and real-time video conferencing.

Cisco does not have great historic strength in those areas,'' said Lisa Pierce,

an industry analyst for Giga Information Group. By using the Internet protocol

(IP), a phone conversation can be broken down into the same type of digital

packets that are used to send information across the Internet or an internal

computer network. Because the calls and data share a single network, the

equipment reduces overall costs and making it easier to integrate functions such

as e-mail and voice mail.

Because IP packets scatter as they travel over the network, the challenge for

companies like Cisco is to make sure that all data packets arrive on the other

side of the telephone line in tact and are re-assembled in the right order so

conversations don’t appear garbled. The Cisco equipment would replace the two

communications networks most companies have today, one for telephone and one for

computer data, with just one. "The networks that can't do data, voice and

video are dinosaurs," said Chambers. "We're going to see open

standards for any new telecommunications or computer product to connect to one

network. This is the first gauntlet thrown down in that direction."

Cisco's new Internet phones connect to an office's Ethernet data network

using the same type of jack like those on the back of a standard office

computer. Because it uses the IP protocol, a telephone can identify itself to

the network. This an employee being moved to a new office can just bring his

phone along, plug it into the wall in he new office and not worry about having

to tell every last business associate of the new extension. "You can plug

the phone into any connection, and it will keep the same number you had,"

explained Brian Bonner, chief information officer and a vice president at Texas

Instruments. I can take my phone and plug it in at a TI office in Germany, and

you can dial my number, which looks like Dallas, and it rings in Germany."