Overview:

Advanced Communications Services have become increasingly relevant
to businesses in large part because of the proliferation of branch
offices, remote workers, and the need for access to centrally provided
data and applications. These services, including Multi-Protocol Label
Switching (MPLS), Ethernet, Internet access, peering, hosted
connectivity and mobile offerings, are becoming even more critical
because the way we work is changing dramatically.

The majority of companies now:

• Centralize their applications and data in primary and backup data centers;
• Open new branch locations, with an average growth rate of about 12% a year;
• Expand the percentage of employees who telecommute full- or part-time;
• Implement new collaborative applications to improve productivity, customer service, and remote management of staff.

The Issue

Nearly every company or organization is doing something with voice over IP today, ranging from evaluations to full adoptions. A continued area of interest among IT executives is total cost of ownership. Until 2005, organizations that implemented VOIP did so because of a real or perceived cost savings over traditional telephony. In many cases, they found substantial savings by eliminating costly third-party contracts for Moves, Adds and Changes (MACs), reducing the amount of cabling required in new buildings, or leveraging idle capacity in their data networks.

But for the past two years, cost has been a secondary driver to “futureproofing” the network. Rarely do we find IT executives who can justify investing in TDM technology when their PBXs must be replaced. They see IP as the platform for the future, and they want to be prepared for new applications— starting with voice—with a converged infrastructure.

The focus on cost has shifted from proving VOIP’s numbers vs. TDM’s numbers to comparisons between vendors. It’s no longer a matter of “if” a company goes to VOIP, it’s when. And when that time comes, they want to understand the different cost components of VOIP—and how key vendors compare with one another.

Nemertes has been tracking VOIP costs for four years and interviewed nearly 400 organizations of all sizes during that time. We will review 2007 trends in VOIP adoption and architecture and associated costs based on this extensive research. For actual costs, we will focus specifically on organizations with more than 1,000 end units on their VOIP systems.

Read This Issue Paper

Clients: Nemertes Issue Paper: VOIP Business Case

Press Rlease: For Immediate Release 

For more information, contact:
Karen Wucher
Nemertes Research
Phone: 972-335-7028
Cell: 970-846-4768
Karen.Wucher@nemertes.com

Press Release

March 27, 2007
FOR IMMEDIATE RELEASE

Complex Networks Lead To Falling VOIP Vendor Ratings
Shortel continues to impress IT executives according to Nemertes study

NEW YORK, NY -- March 27, 2007 – IT executive ratings of their IP telephony vendors have declined this year, according to Nemertes Research latest benchmark volume, “Voice Over IP: State of Deployment, Architecture, Vendor Ratings, ” which has tracked vendor performance in several categories for the past four years. The study, based on five months of in-depth interviews with more than 120 IT executives, finds that vendors need to improve the most in the areas of management tools, ease of installation and troubleshooting, and customer service. IT executives rated vendors highest in product features, overall performance, and technology.

Vol. 1: Organizational Trends & VoIP State of Deployment

Table of Contents

1 EXECUTIVE SUMMARY 1
2 ORGANIZATIONAL AND OPERATIONAL STATUS 2
2.1 OVERVIEW OF PARTICIPANTS 2
2.2 STAFFING UP 3
2.2.1 Cha-Ching! Does Convergence Pay? 6
2.3 WHEN VOICE AND DATA WORLDS COLLIDE 7
2.3.1 Staff Convergence 9
2.4 CALLING THE SHOTS 11
2.5 NEMERTES’ ORGANIZATIONAL RECOMMENDATIONS 12
2.5.1 For Business Users/IT Executives 12
2.5.2 For Vendors & Carriers 13
3 STATE OF DEPLOYMENT 15
3.1 HOW WIDESPREAD? 15
3.1.1 Growing Rollout 16
3.1.2 Full Organizational Adoption 19

Volume 2: Vendor Analysis

Table of Contents

1 EXECUTIVE SUMMARY 1
2 VENDOR ANALYSIS 2
2.1 TOUGH DECISIONS 2
2.1.1 Bottom Line: Huge Improvement! 2
2.1.2 Vendor Evaluations, by Customer Sizes 4
2.1.3 Vendor Assessment, by Industry 5
2.2 BUYING CRITERIA 6
2.3 WHO MADE THE SHORT LISTS? 8
2.3.1 Vendor Assessment 10
2.3.2 Vendor Selection 10
2.4 VENDOR CLOSING RATES 12
2.5 VENDOR RATING CATEGORIES 14
2.5.1 Value 16
2.5.2 Technology 17
2.5.3 VAR Expertise 18
2.5.4 Management Tools 19
2.5.5 Customer Service 20
2.5.6 Solution Experience 20

Vol. 3: Convergence Business Case

Table of Contents

1 EXECUTIVE SUMMARY 5
2 BUSINESS CASE 6
2.1 WHAT’S DRIVING BUSINESS DECISIONS? 6
2.2 OPERATIONAL OVERVIEW 8
2.2.1 Planning, Installation, Troubleshooting Time on the Rise 9
2.2.2 Time is Money: Vendor-Specific Expectations 11
2.2.3 Penetration: VOIP Handsets by Vendor 14
2.2.4 Down to the Dollars 16
2.3 CAPITAL COSTS 20
2.3.1 Switches & Phones Only 20
2.3.2 All Capital Investment 21
2.4 ADDITIONAL FINANCIAL ANALYSIS 23
2.4.1 Management Tools 23
2.4.2 Training 24
2.4.3 Staffing 26
2.4.4 MAC Analysis 29

Market Analysis

Table of Contents

1 EXECUTIVE SUMMARY 5
2 MARKET ANALYSIS 6
2.1 OVERVIEW 6
2.2 HARDWARE 7
2.2.1 Trends 8
2.2.2 Hardware Vendors and Products 8
2.3 MANAGEMENT, MEASUREMENT, TESTING 16
2.3.1 Trends 16
2.3.2 Management/Test/Measure Vendors and Products 16
2.4 WAN OPTIMIZERS 26
2.4.1 Trends 26
2.4.2 WAN Optimization Vendors and Products 26
2.5 ENTERPRISE SERVICES 31
2.5.1 Trends 31
2.5.2 Carriers and Enterprise Services 31
2.6 RECOMMENDATIONS 35
2.6.1 For IT Executives 35
2.6.2 For Vendors 36
3 APPENDIX A: REPORT METHODOLOGY 37
3.1 PROCESS 37
3.2 TIMEFRAME 39
3.3 PARTICIPANTS 39
3.4 BY INDUSTRY 40
3.5 BY SIZE 40
3.6 DISCLAIMER/DISTRIBUTION 41
4 APPENDIX B: PEER PROFILE BENCHMARK DESCRIPTIONS 43

Table of Figures

FIGURE 1: PARTICIPANTS BY TITLE 38
FIGURE 2: PARTICIPANTS BY INDUSTRY 39
FIGURE 3: ANNUAL REVENUE 40
FIGURE 4: IT BUDGET 41

Table of Tables

TABLE 1: VOIP HARDWARE OVERVIEW 9
TABLE 2: VOIP HARDWARE, INTEROPERABILITY & APPLICATIONS 12
TABLE 3: HARDWARE NOTES 15
TABLE 4: MANAGE/TEST/MEASURE VENDORS, OVERVIEW 17
TABLE 5: MANAGE/TEST/MEASURE VENDORS, CAPABILITIES 20
TABLE 6: MANAGE/TEST/MEASURE VENDORS, INTERFACE, REPORTING, ADVANCED FEATURES 22
TABLE 7: MANAGE/TEST/MEASURE VENDORS NOTES 24
TABLE 8: OPTIMIZATION PRODUCTS AND VENDORS, OVERVIEW 27
TABLE 9: OPTIMIZATION PRODUCTS AND VENDORS, CAPABILITIES 28
TABLE 10: OPTIMIZATION PRODUCTS AND VENDORS, FEATURES 29
TABLE 11: OPTIMIZATION PRODUCTS AND VENDORS, NOTES 30
TABLE 12: CARRIER ENTERPRISE VOIP SERVICES, OVERVIEW 32
TABLE 13: CARRIER ENTERPRISE VOIP SERVICES, CAPABILITIES 33
TABLE 14: CARRIER ENTERPRISE VOIP SERVICES, CAPABILITIES, CONT. 34

1 Executive Summary

Convergence projects are running strong in the vast majority of organizations. Voice typically is the first application implemented on a converged IP backbone, and Nemertes is starting to see IT executives explore new applications, such as video, unified communications, collaborative tools and real-time communications dashboards. They’re also recognizing the need for network optimization, branch-office technologies, enhanced management tools, and detailed cost analyses. And finally, they’re waiting not-so-patiently for the carriers to catch up with market demands.

This companion to the “Convergence & Next-Generation WAN Technologies”
benchmark provides a market assessment of the convergence market, with specific product/service matrices to help IT executives evaluate the offerings available. One of the biggest challenges when launching or augmenting a convergence project is finding the right vendors. The goal of this volume is to provide insight into and information about key vendors in several sub-segments of the convergence market. The matrices do not represent the entire market, but they do represent the vendors that are most often cited by the IT executives who participate in Nemertes Research.

Additional volumes will explore converged applications, branch-office trends, management challenges, mobility plans, and WAN service/technology trends. We also analyze organizational best practices based on Nemertes’ Peer Profile Benchmarks, a multi-faceted method of categorizing companies based on a variety of characteristics.

Please contact research manager Shirlene Browne, shirlene@nemertes.com if you would like to schedule a briefing.

Branch Office Best Practices

Table of Contents

1 EXECUTIVE SUMMARY 6
2 BRANCH-OFFICE STRATEGIES 7
2.1 WHAT MAKES A ‘BRANCH OFFICE?’ 7
2.2 BRANCH-OFFICE DECISION MAKERS 8
2.3 INVENTORY ANALYSIS 9
2.3.1 Tier One 10
2.3.2 Tier Two 11
2.3.3 Tier Three 11
2.3.4 Tier Four 12
2.3.5 Tier Five 13
2.3.6 Inventory Recommendations 13
2.4 BRANCH OFFICE MANTRA: ‘BETTER, FASTER!’ 14
2.5 GROWTH IN BRANCH OFFICES 17
2.6 BRANCH-OFFICE MANAGEMENT 18
2.6.1 Centralized 20
2.6.2 Distributed 22
2.6.3 Combination 22
2.6.4 Service Provider 23
2.6.5 Time Spent on Managing Branch 23

Follow the links below for previews of the 2006 Convergence & Next Generation WAN Technologies Volumes

• Volume 7 Preview: Managing & Securing Converged Networks
• Volume 6 Preview: Converged Applications
• Volume 5 Preview: Branch Office Best Practices
• Volume 4 Preview: Market Analysis
  
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Vol. 7: Managing & Securing Converged Networks

Table of Contents

1 EXECUTIVE SUMMARY 5
2 MANAGING CONVERGED NETWORKS 6
2.1 MANAGEMENT SHORTCOMINGS 6
2.2 MANAGEMENT BEST PRACTICES: GETTING STARTED 7
2.2.1 Baseline Network Assessment 7
2.2.2 Baseline Network Assessment: Costs & Vendors 9
2.2.3 Benchmarking Network, Application Performance 13
2.3 BUDGETING FOR MANAGEMENT TOOLS 15
2.4 MANAGEMENT VENDOR SELECTION 16
2.5 DRILL DOWN: WHAT’S IN DEMAND FOR MANAGEMENT TOOLS? 22
2.5.1 VOIP Management Lifecycle 24
2.6 PROFESSIONAL SERVICES 25
2.6.1 Leveraging the Third Parties—How? 27
2.6.2 Why the Draw to Managed Service Offerings? 30
2.6.3 Who’s Offering Managed & Hosted Services? 31
2.7 OPTIMIZING THE NETWORK 32
2.8 SECURING CONVERGED NETWORKS 34
2.8.1 What are the Threats? 35
2.8.2 Protecting VOIP 35
2.9 RECOMMENDATIONS 37
2.9.1 For Vendors and Carriers 37
2.9.2 For Customers 38
3 CUSTOMIZED FINDINGS 39
4 APPENDIX A: REPORT METHODOLOGY 40
4.1 PROCESS 40
4.2 TIMEFRAME 42
4.3 PARTICIPANTS 42
4.4 BY INDUSTRY 43
4.5 BY SIZE 44
4.6 DISCLAIMER/DISTRIBUTION 45
5 APPENDIX B: PEER PROFILE BENCHMARK DESCRIPTIONS 46

Table of Figures

FIGURE 1: RELEVANCE OF MANAGEMENT TOOLS IN VENDOR DECISIONS 6
FIGURE 2: BASELINE NETWORK ASSESSMENT PLANS 8
FIGURE 3: HOW OFTEN DO YOU BENCHMARK NETWORK PERFORMANCE? 12
FIGURE 4: RECOMMENDED MANAGEMENT BUDGET 16
FIGURE 5: WHAT TYPE OF MANAGEMENT TOOL DO YOU USE? 17
FIGURE 6: MANAGEMENT TOOL ADOPTION, BY INDUSTRY 19
FIGURE 7: USE IP PBX MANAGEMENT TOOLS 20
FIGURE 8: USE SPECIALTY MANAGEMENT TOOLS 21
FIGURE 9: WHAT SHOULD BE IN A VOIP MANAGEMENT TOOL? 23
FIGURE 11: DO YOU PLAN TO USE PROFESSIONAL SERVICES? 26
FIGURE 12: WHO WILL PROVIDE YOUR THIRD-PARTY SERVICES? 27
FIGURE 13: WHAT THIRD-PARTY SERVICES WILL YOU BUY? 28
FIGURE 14: USE THIRD-PARTY MANAGEMENT SERVICES 29
FIGURE 15: ARE YOU USING NETWORK-OPTIMIZATION TOOLS? 34
FIGURE 16: SECURITY MEASURES FOR VOIP NETWORKS 36
FIGURE 17: PARTICIPANTS BY TITLE 41
FIGURE 18: PARTICIPANTS BY INDUSTRY 42
FIGURE 19: ANNUAL REVENUE 43
FIGURE 20: IT BUDGET 44

Table of Tables

TABLE 1: NETWORK READY? WHAT'S THE BEST APPROACH ? 10
TABLE 2: IP TELEPHONY MANAGEMENT TOOLS, BY COMPANY SIZE 18
TABLE 3: MANAGED-SERVICES OFFERINGS 31
TABLE 4: NETWORK OPTIMIZATION 33

Executive Summary

Convergence projects are running strong in the vast majority of organizations. Voice typically is the first application implemented on a converged IP backbone, and Nemertes is starting to see IT executives explore new applications, such as video, unified communications, collaborative tools and real-time communications dashboards. They’re also recognizing the need for network optimization, branch-office technologies, enhanced management tools, and detailed cost analyses. And finally, they’re waiting not-so-patiently for the carriers to catch up with market demands.

Volume 7 of the “Convergence & Next-Generation WAN Technologies” benchmark explores trends and best practices for managing and securing converged networks. Managing a converged network can be one of the most challenging pieces of the entire project, yet it’s a piece that doesn’t get the attention or budget it deserves up front. The volume will explain why 85% of organizations don’t budget for VOIP-specific management up front, and what fallout those decisions have on the network overall.

Volumes 8 of this benchmark will provide an assessment of mobility and wireless trends with converged networks. Additional volumes explore vendor and carrier analyses, organizational and operational best practices, branch-office trends, mobility plans, and WAN service/technology trends. Nemertes also provides a Convergence Market Analysis, which explores the differences between vendors and service providers in the convergence space. We also analyze organizational best practices based on Nemertes’ Peer Profile Benchmarks, a multi-faceted method of categorizing companies.

Please contact research manager Shirlene Browne, shirlene@nemertes.com if you would like to schedule a briefing.

By Christopher J. Kardish, Principal Research Analyst, Nemertes Research Inc.
July 13, 2006

New phones seem to come out every day, but this week, D-Link (TAI: 2332, www.dlink.com) delivered a WiFi phone that speaks worlds about the convergence of wireless, VOIP and cell-phone form factors, a trend Nemertes Research has identified in numerous reports.

The phone features a familiar, lightweight, flip-phone design with a 100-number memory, caller id with name, call waiting, call forwarding, and a text-messaging system. A three-hour talk time/70-hour stand-by time shows the progress made in managing power consumption – a problem with portable WiFi devices.

If you would like to receive our full Impact Analysis, sign up for our weekly newsletters.

Advice for running IT at branch offices

Branch Office Best Practices Newsletter By Robin Gareiss, Network World, 06/27/06

If you’re responsible in any way for a new IT initiative in the branch office, one of your biggest concerns is likely to be how to monitor and manage the products and services involved with the initiative.

After all, without insight into the performance, you won't be able to document success (or failure) - and you'll be hearing from the end users in those branch offices when they can't access an application, complete a call, or are experiencing long delays.

I’ve talked to many IT executives about this challenge. If they had no budget constraints whatsoever, the ideal scenario is a combination of sophisticated management tools and a dedicated IT person at every location.

By Robin Gareiss, Executive Vice President

Convergence is here, no question about it. Based on findings from Nemertes’ 2006 Convergence & Next‐Generation WANs benchmark, it’s clear that enterprise organizations are deploying convergence—starting with VOIP—en masse. Fully 96% of benchmark participants are deploying VOIP today or planning to do so within the next three years. And that seismic shift places a unique burden on networking and IT staffs in several areas:

• Delivering low‐cost, high‐value networking services;
• Ensuring predictable applications performance;
• Managing and monitoring the applications (including voice) and the network;
• Leverage IT applications and networks to improve employee productivity;
• Leveraging converged applications in IT to make it easier to manage the growing number of remote employees.

The complete issue paper is available to Nemertes clients. Non-clients, please contact research@nemertes.com

Comparison by Nemertes rates Avaya, Nortel, ShoreTel.

By Robin Gareiss, Network World, 05/15/06

In the Nemertes study, Avaya, Cisco, Nortel and ShoreTel garnered enough statistical responses to be counted individually.

When we asked respondents how much time they spent on operational start-up, measured in minutes per user, Cisco came out on top at 250 minutes per user, followed by Nortel at 186 minutes, Avaya at 77 minutes and ShoreTel at 69 minutes.

Published: 03/17/06

By Johna Till Johnson, Network World, 01/23/06

If you're like a lot of folks, you're probably thinking IPTV is just a tad overhyped: Service providers from AT&T to BT to India's Reliance Infocomm have announced IPTV initiatives.

* Integrating management of data center facilities with information systems

By Andreas M. Antonopoulos, Network World, 11/15/05

Convergence has had a significant impact on enterprise networks and data centers, with voice and video and data frequently carried on the same IP network.

By Johna Till Johnson, Network World, 10/24/05

Convergence changes things. Although combining voice and data across the same packet network wouldn't, in theory, imply dramatic changes in the organization and operations of an IT department, in practice companies that implement convergence find themselves revisiting almost every aspect of their operations.

August 22, 2005
by Melanie Turek

Not surprisingly, as collaboration applications are maturing, they’re also literally getting bigger—stuffed with more features and functionality, integrated with complementary products, and backed by vendors that are acquiring or partnering with other vendors, or simply snagging talent from the competition and relying on it to help build out their brand. Such consolidation and convergence often allow users to get all (or at least most of) their collaboration needs met from a single source. The result is sometimes valuable and sometimes not, but it’s almost always interesting. And these days, it’s happening almost weekly.

By Johna Till Johnson, Network World, 08/08/05

VoIP security is beginning to get a lot of attention. But is its visibility warranted? In June, Gartner called VoIP security concerns "over-hyped" and urged IT executives not to hold off on VoIP deployment because of such concerns.

A step-by-step guide to determining the true cost and benefits of VoIP.

By Robin Gareiss, Network World, 07/11/05

When it comes to VoIP, most network managers are satisfied that the technology works.

By Johna Till Johnson, Network World, 06/13/05

If you're like a lot of network executives, you've begun to look seriously at deploying a converged infrastructure. And you're probably aware that successfully deploying convergence means more than rolling out an IP PBX. It requires rethinking not just the phone system but everything from service provider service-level agreements (SLA) to network operations - and even more importantly, assessing the ways that converged applications can help improve the business bottom line.

By Robin Gareiss, Nemertes Executive Vice President & Sr. Founding Partner
May 27, 2005

The recent announcement of the BCM 50 small-business IP PBX by Nortel Networks (NYSE: NT) highlights the growing momentum of VOIP in the small-business market. Nemertes expects the small-business market to become increasingly more competitive in the next 12 months, as an increasing number of vendors begin to target this space.

By Johna Till Johnson, Nemertes Research
March 25, 2005

The recent announcement that the City of San Jose will be deploying VOIP solutions from Nortel Networks (NYSE: NT) for voice, data and converged applications illustrates three key trends.

First, VOIP is gaining traction even among traditionally cost-conscious and conservative organizations, such as state and local governments and small-to-medium businesses (SMBs). Until recently, many such enterprises have been reluctant to plunge into VOIP, but the City of San Jose’s decision illustrates the fact that in many respects, VOIP has come of age with this organizations: In Nemertes’ recent convergence benchmark, 75% of SMBs said they were adopting VOIP now, with 63% of adopters saying they planned a full organizational rollout.

What you need to know before deploying VoIP
Source: ZDNet
March 15, 2005

"After crunching the numbers and weighing the benefits and risks, you've decided to swap out your old PBX for a VoIP system. Now comes the hard part: designing and deploying a solution that will deliver the fastest ROI for your enterprise. In this audiocast, we'll provide practical tips on how to roll out a VoIP system and we'll tell you what pitfalls to avoid."

March 1, 2005
Communications.com

This from Nemertes Research, one of our favorite analysts in our market. Say what you may, they at least seem to have deep knowledge of the telecom space, unlike some firms that throw a fuzzy bone to it now and then.

Anyway, its new study, "Convergence: Reality at Last," says that IP telephony is now providing enterprises with considerable business benefits, and that these advantages are only going to increase.

Factors organizations cite as VoIP migration drivers break down into three broad categories: raw cost savings, productivity enhancements, and business improvements.

The market for enterprise voice, IP-telephony and converged networks is moving fast, and in unpredictable directions. In response to the growing market demand for reliable, objective and practical information, VoiceCon is expanding.

Mark your calendars today: The November/December Network World 2005 IT

Roadmap, featuring Nemertes President & Senior Founding Partner Johna Till Johnson, is tentatively scheduled to kick off in Boston Nov. 29, followed by Chicago on Dec. 1, with additional cities being scheduled now. This standing-room only-event covers the landscape of developments in IT for the present and future. It addresses the most important issues and technologies of 2006, and provides enterprises with planning and strategy best practices. See