Boeing switching to Internet telephony

Cisco to replace phones with VoIP technology

July 15, 2004|By Jon Van | Jon Van,CHICAGO TRIBUNE

The Boeing Co. has decided to hang up its traditional phones and instead use Internet technology for communications worldwide.

With 157,000 employees and operations around the globe, the Chicago-based plane maker and defense contractor is the biggest company to embrace Voice over Internet Protocol (VoIP) technology, which allows it to transmit voice, data and video on a single network.

Boeing employees are unlikely to notice the difference. Their phones will still ring and they'll continue to talk on what look like regular phones.

Businesses have led the way in adopting the technology, which has been around for about a decade. But most early adopters have been small to medium-size operations. Large enterprises like Boeing, which last year had revenue of $50.5 billion, have mostly taken a go-slow approach, waiting until all the bugs are worked out.

Others may follow

Boeing's move is expected to give other large businesses the confidence needed to take the plunge themselves.

"This is a trend we've been awaiting for some time," said Richard Wilkus, president of ISI Telemanagement Solutions Inc. in Schaumburg, Ill. "Boeing has done its homework and determined this is the way to go, which gives this credibility for others to do the same."

Cisco Systems Inc., Boeing's VoIP vendor, is talking with several other potentially huge accounts, said Hank Lambert, Cisco's product marketing director.

The VoIP boom comes as many companies are considering upgrading their information technology infrastructure, said David Roddy of FTI Consulting Inc. in Cambridge, Mass.

"I expect to see a lot more large enterprises signing up," Roddy said. "Saving money is only part of it. Reliability and features are really what is driving this."

Pascal Aguirre, senior vice president at the Boston-based Adventis consultancy, said he expects the technology to "really gather steam" with companies between next year and 2006.

Still, some companies remain skeptical because of bad experiences with the Internet phone technology.

"I think a lot of people will wait another six months or a year to see how Boeing's transition goes," said Pete Wilson, president of Telwares, a telecom consultancy.

So far, consumer use of the technology is in its infancy.

Vonage Holdings Corp., a new carrier specializing in VoIP, serves more than 200,000 consumers, which is barely a blip among 300 million wired and wireless lines in the nation.

`Wow factor'

But VoIP has clearly caught the industry's imagination. AT&T Corp. will roll out VoIP in 100 markets this year, and other traditional phone companies are making the transition to Internet telephony.

A poll commissioned by AT&T this year found that about three out of four adults have heard of VoIP and nearly two-thirds of the public believe the technology will change the way they communicate.

"It's clear that many consumers understand the `wow factor' of VoIP," said Cathy Martine, an AT&T executive.

Boeing said a chief benefit will be enhancing collaboration among Boeing design teams. Current work to design Boeing's new 7E7 Dreamliner regularly involves communications among teams working in Japan, the United States and Italy, for example.

"We still like people to get on airplanes" to confer, said Cliff Naughton, Boeing's network services director. "But we see this as a collaboration tool for our design centers."

It is expected to take from five to seven years to replace the company's phones, involving 180,000 traditional phone lines, with Internet Protocol technology, he estimated.

The Chicago Tribune is a Tribune Publishing newspaper.

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