Virgins VOIP Is a Mega-Hit

Virgin Entertainment Group is no stranger to the latest trends, so it shouldnt come as a surprise that the company is leveraging a consolidated IP network to deliver an enhanced shopping experience to customers as well as voice and data to its employees.

The resulting savings are music to Virgin executives ears: In the first year of the completed deployment, the company is on track to save $700,000 on a network that cost $330,000.

Virgin officials estimate that the IP infrastructure will ultimately increase the companys estimated savings to more than $1 million a year.

"We literally went in and redid the major backbone infrastructure across our entire organization while taking our data and converging it with voice to establish a strong IP-based platform going forward," said Robert Fort, director of IT for Virgin Entertainment Group, North America.

"We just finished the implementation, and it is absolutely proving to be [going in] the right direction in our [profit and loss] statement."

Virgin Entertainment Group is the North American subsidiary of billionaire Richard Bransons London-based Virgin Group conglomerate.

Virgin Entertainment, based in Los Angeles, operates 14 Virgin Megastores in the United States.

To read more about Virgins kiosks, click here.

Larger stores stock as many as 250,000 CDs, 11,000 DVDs and 7,000 games. The company also operates the Virgin Megastore Web site (www.virginmega.com), which is run through a partnership with Amazon.com.

Virgin Entertainment has more than 1,500 employees, with sales of $200 million in 2005.

Two years ago, Virgin Entertainment was operating classic analog PBX systems in its stores and at its headquarters.

Employees companywide were using the systems on the public telephone network, resulting in limited voice mail capabilities and high long-distance charges.

Virgin Entertainment also lacked an internal support infrastructure to service the PBX systems in its stores.

Every time an issue came up—be it the addition of an employee to the directory, a move or a change of a phone number—Virgin would have to call a local service company for support.

"The number of stores we have isnt huge, but their geographic disparity challenged us as an IT organization from a support point of view," said Fort.

"A lot of equipment was reaching end of life, and the number of support problems was dramatically increasing. At, lets say, $150 a service call, it was getting ridiculous."

Fort and his team decided to investigate more cost-effective options. At the same time, Fort was contemplating a change in data providers—the one Virgin Entertainment was using had been slow to respond to outages and required an Internet connection at each Virgin Entertainment site.

Next Page: Consolidation.