IP Phone Buyer's Guide


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IP Phone Buyer's Guide

  1. 1. Learn what IP phone systems are on the market and understand what issues you should consider before choosing the right one for your enterprise. IP Phone Buyer’s Guide Copyright © 2007, Tippit, Inc., All Rights Reserved
  2. 2. IP Phones Buyer’s Guide Contents Executive Summary 3 IP Phones Overview 4 Market Overview 6 The Benefits of IP Phones 8 Basic Features 9 Cost 10 Checklist 11 Conclusion 12 www.voip-news.com 2
  3. 3. IP Phones Buyer’s Guide Executive Summary Yesterday’s charcoal-grey business phones are fast being displaced by touch-screen, display-outfitted IP units that do everything from facilitate Web conferences to deliver up-to-the-minute stock quotes. But bells and whistles aren’t the only reason companies are turning to IP phones. Because they rely on private networks and the Internet instead of traditional phone lines to exchange voice and data traffic, IP phones can deliver enormous cost savings and practically eliminate long- distance charges. The list of benefits doesn’t end there — hassle-free installation, centralized call management, scalability, hot desking and easy integration with business applications are all factors prompting New IP phones are getting companies to swap their POTS (plain old telephone service) for an IP sleeker and more advanced. PBX (Internet Protocol Private Branch eXchange) system. The bottom line with IP phones is that they offer businesses a user- friendly and easy-to-manage alternative to traditional phone systems. Such innovation, however, comes at a price; a single IP phone can range from $150 to $700 or more, a hefty price tag for a company with limited funds or a sizeable work force. This buyer’s guide examines the IP phone market and offers details on what to look for, how to buy, what you can expect to pay and how to get the most out of your investment. www.voip-news.com 3
  4. 4. IP Phones Buyer’s Guide IP Phones Overview The average American pet dog is likely to outlive your company’s high- priced traditional telephone system. In fact, analysts estimate that the average life expectancy of a legacy phone system is just seven (human) years. There will come a time, probably sooner rather than later, when every business will have to consider trading in its age-old desktop phones for IP equivalents. For a company looking to abandon its legacy phone Hybrid IP PBX vs. Pure IP system altogether, a complete overhaul of The key to selecting an appropriate IP phone hinges on developing a its telephone system proper telephony migration strategy. There are two primary approaches makes the most sense, for businesses: a complete overhaul or a converged deployment. For both technically and a company looking to abandon its legacy phone system altogether, a financially. complete overhaul of its telephone system makes the most sense, both technically and financially. This start-from-scratch approach entails implementing a pure IP solution, along with dedicated IP phones, from a single vendor. The result is a suite of feature-rich, easy-to-implement voice services that can easily be integrated with both IT applications and a unified communications plan. But not all companies are willing to scuttle their existing investment in analog or digital phones for the sake of pure IP units. For example, companies with scarce IT resources and a limited need for innovative communication solutions may find it more cost-effective to ease into an IP PBX with a hybrid model. Many of today’s legacy PBX vendors offer a migration path that involves adding IP capabilities while leveraging current telephony assets. With this hybrid approach, businesses can connect to and between nearly any other form of telephony — from digital to POTS — thereby both extending the life of its legacy system and reaping the benefits of IP. www.voip-news.com 4
  5. 5. IP Phones Buyer’s Guide IP Phone Types The next step is deciding what IP phone best suits your business needs. Today’s IP phones range from high-priced, videoconference-enabled devices to low-end, standard machines. Popular IP phone types include: • Desktop: Sized and styled for the office place, today’s desktop IP phones typically include single-line access, a limited number of interactive soft keys, and a two-line LCD screen with browsing and instant-messaging capabilities. High-end IP phones are also known to feature a backlit, high-resolution, color touch screen for easy access to communications information, XML applications and special features. • Wireless: For businesses boasting an existing 802.11 network, a wireless IP phone is an excellent choice. These increasingly popular devices allow voice and data support on the same wireless backbone. • Conferencing: IP conferencing phones offer instant, face-to-face communication between two or more participants. Ideally suited for conference rooms of small-to-medium size, these specialty phones incorporate a camera, LCD screen, speaker, keypad and handset in a single unit. Proprietary vs. Open Phones Just because you’ve enlisted a VoIP provider doesn’t mean you have to turn to that same vendor for an IP phone. Selecting an IP phone manufacturer is a crucial step, and there are plenty of third-party, standards-based phones to choose from. These low-cost, no-frills handsets include upwards of 16 standard calling features and can be configured to work with the majority of today’s IP PBX systems. The downside is that third-party IP phone purchasers shouldn’t expect the same high-tech bells and whistles provided by legacy vendors such as Cisco and Nortel. Other factors to consider when purchasing an IP phone include customer-support availability, as well as a manufacturer’s commitment to service levels. www.voip-news.com 5
  6. 6. IP Phones Buyer’s Guide Market Overview These days, there’s no shortage of vendors peddling IP phones, and it’s no wonder. According to Juniper Research, the market for IP PBXs will reach over $1.6 billion this year, and IP phone sales associated with IP Centrex/hosted system sales will top nearly 16 million units in 2010. Currently, vendors such as Avaya, Cisco, Nortel, Polycom, Siemens AG Hoping to distinguish and ShoreTel are working hard to gobble a sizable slice of the IP phone themselves from the pie. Recently, research firm In-Stat cited Cisco as a market leader for the pack, many vendors IP phone industry, taking 43 percent of the market share with Avaya are upping the ante by trailing at 12 percent. All this could change soon as the market becomes adding special features increasingly flooded with low-end, inexpensive, third-party phones to their IP phone from small-scale competitors. offerings. Hoping to distinguish themselves from the pack, many vendors are upping the ante by adding special features to their IP phone offerings. Nortel’s IP Phone 2007, for example, includes a 5.7-inch viewable color touch screen, bringing multimedia presentation support to the desktop device. Cisco’s Unified IP Phone 7985G, a personal desktop videophone that makes instant, face-to-face communications a reality. And then there’s the new Polycom HDX 4000 series which sports multiple HD features, including HD voice, HD video and HD content-sharing capabilities. But it’s the threat of Microsoft becoming a dominant IP telephony player that is truly raising eyebrows among top vendors. Through its Office Communications Server 2007, a SIP-based communications platform, the Redmond giant plans to provide presence-based VoIP call management, audio, video and Web conferencing, and instant messaging — all working in conjunction with existing software and applications. The rollout also includes a unified messaging server called Exchange Server 2007, which integrates email, voice mail and faxing. What’s more, Microsoft Office Communicator 2007 will serve as a presence-based, enterprise VoIP softphone, while Microsoft Office Live Meeting will provide conferencing services. So far, at least nine manufacturers have unveiled 15 IP telephones that will be compatible with Office Communications Server 2007, including LG-Nortel, NEC and Samsung. www.voip-news.com 6
  7. 7. IP Phones Buyer’s Guide As a result of Microsoft’s proposed plans, some industry experts recommend that companies hold off before tackling a full-scale IP PBX implementation. But not everyone is convinced that Microsoft’s entry into an already crowded space will bring about massive changes. Says Henry Dewing, a Forrester Research analyst, “[Microsoft’s unveiling of its Communications Server 2007] will be a flash in the market. It’ll be something interesting, but I don’t see markets changing in the long term.” www.voip-news.com 7
  8. 8. IP Phones Buyer’s Guide The Benefits of IP Phones Whether you’ve purchased a high-end video conferencing IP device or a bargain-basement, no-frills unit, all IP phones offer advantages above and beyond their traditional counterparts. An IP phone’s primary perks include: • Easy Configuration and Administration: Forget about time- consuming reconfigurations and rewiring activities. Rather, an IP phone can be moved from one site to the next simply by plugging it into the nearest Ethernet port. • Enhanced Productivity: Businesses can easily integrate IP phones with key applications such as customer-relationship-management and contact-management tools. For example, users can place calls directly from Microsoft Outlook or instantly access a price list the moment a particular client calls. • Greater Collaboration: By integrating videoconferencing into an IP telephony solution, companies can perform feats such as holding a conference call among worldwide offices or working jointly on development projects using Web-based collaboration tools. www.voip-news.com 8
  9. 9. IP Phones Buyer’s Guide Basic Features When selecting an IP phone, there are a number of standard features buyers have simply come to expect. While these most basic functions don’t exactly push the envelope on technical innovation, they do promise to boost productivity and improve customer service. Standard features include: • Caller ID: Displays incoming call information, such as a name or a phone number, on your phone screen. • Call Waiting: Provides an auditory alert of an incoming call while on another call. • Call Transfer: Offers the ability to transfer calls between extensions without going back to a central switchboard. • Call Parking: Temporarily stores a call in a waiting area, then picks up the call using another phone. • Softkeys: Programmable buttons allow for easy feature and application access that perform whatever function is shown near it on a touch-screen display. • User Directory: Provides an address book of personal contacts that you can access directly on your phone. • Speed Dialing: Allows you to place a call with the press of a button rather than dialing a number manually. www.voip-news.com 9
  10. 10. IP Phones Buyer’s Guide Cost When it comes to IP phones, talk isn’t always cheap. In fact, handsets make up between 40 and 45 percent of the cost of an IP telephony installation. That might help explain why only 40 percent of IP PBX seats are configured with IP phones, according to In-Stat. Hosted IP PBX pricing “The cost of an IP phone is a major barrier to upgrades,” says Keith Nissen, is fixed per user and an In-Stat analyst. “IP phones will typically cost anywhere from $300 to entirely predictable. $500 each. It is the majority of the investment in a new PBX system.” Monthly costs are always a flat fee per user As the price of production has dropped, so has the cost of IP phones per month. — by approximately 50 percent, according to industry analysts. Even still, purchasing managers have their work cut out for them. After all, presenting senior-level decision-makers with a strong argument for investing in IP phones involves pointing out soft dollar benefits such as productivity gains and enhanced customer satisfaction – intangible parameters for measuring ROI (return on investment). What’s worse is that many purchasers of IP phones simply aren’t getting the most bang for their buck. Failing to evangelize the use of feature- rich IP phones among employees and selecting IP phones with features that extend beyond a company’s real needs are both factors that result in wasted money. Consider this: Gartner estimates that businesses worldwide will buy more than 150 million IP phones over the next five years. However, for 75 percent of those purchases, companies will spend at least $150 more than they need to as they focus on purchasing IP screen phones. In the end, it’s up to businesses to carefully assess what they hope to accomplish with an IP-based phone system and what they’re willing to invest in the training of their employees. www.voip-news.com 10
  11. 11. IP Phones Buyer’s Guide IP Phones Checklist What to ask before you buy. r Are you better off migrating to a hybrid IP PBX or a pure IP system? r What features are you looking for in an IP phone? r How much time and money are you willing to invest in the training of your employees on IP telephony? r How many employees will actually benefit from an IP phone in terms of increased productivity? r you have the IT resources needed to manage an IP Do telephony system? r Will you require videoconferencing capabilities in your IP phone? r you have an existing 802.11 network that can Do accommodate wireless IP phones? r Does your budget allow for a proprietary IP phone or a low- cost, third-party device? r What basic features do you expect from an IP phone? r What kind of customer support does your IP phone manufacturer offer? r What is the fine print in an IP phone manufacturer’s service level agreement? www.voip-news.com 11
  12. 12. IP Phones Buyer’s Guide Conclusion Given the limited life span of a traditional telephone system, the majority of today’s businesses will, at some point, have to seriously consider switching to an IP-based model. Forget about being wowed by standard features such as call waiting and call transfer. The latest crop of IP phones allows users to perform feats such as holding PowerPoint presentations with Zurich-based colleagues and freely hot plugging phones from one site to the next. But there’s a price to be paid for such innovation. IP phones can cost upwards of $700 a set. Many businesses are hard-pressed to measure their cost benefits in terms other than productivity gains and enhanced customer service — hardly convincing metrics for bottom-line-obsessed CEOs. For those companies that take the IP plunge, the perks can be outstanding: eliminated phone wiring, easy installation, centralized management, scalability, hot desking, enhanced usability and enormous call cost reduction. The secret to success, however, involves selecting an IP phone that best suits your business needs. Carefully examine feature lists and select a vendor that understands your industry’s communication requirements. Once you’ve purchased your IP phones, be sure that employees are making the most of all those innovative features. For a detailed comparison of IP Phones, see the VoIP-News IP Phone Comparison Guide. www.voip-news.com 12
  13. 13. IP Phones Buyer’s Guide Tippit, Inc. 514 Bryant Street, San Francisco, CA 94107 Phone: 415-318-7200 / Fax: 415-318-7219 publishers@tippit.com www.voip-news.com 13