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    When VOIP Projects Slip

    By
    Ellen Muraskin
    -
    August 20, 2004
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      When VOIP vendors and service providers land contracts with big-name enterprises, their marketing departments push hard to get customer clearance to announce the win. Clearance obtained, they kick their keyboards into high gear, issuing news releases.

      When those same contracts suffer untimely termination, it takes someone with fine hearing and an unusually long industry memory to notice. So, when IBM Global IT Services announced that it was taking over for Electronic Data Systems on a major IT contract for Dow Chemical, this reporter (and others) heard a faint bell ring, launched searches into their story files and came up with the original 2001 announcement: A $1.4 billion contract over seven years to build and maintain a multinational IP network, DowNet, for 50,000 employees and contractors.

      DowNET, now to be rearchitected and managed by IBM, was intended to aggregate Dows global voice and WAN (wide area network) operation under a single contract. Its telephony side was to showcase Cisco Call Manager IP PBX for call routing and Cisco Unity for unified messaging (which presents voice mails, e-mails and faxes in one Web-accessible in-box).

      As an important proof case for Ciscos claims to scalability, it was to be six times the size of Ciscos next largest customer, then the New Zealand Ministry of Social Policy. Dow said then that it saw the converged network as a way to smooth the integration of recently acquired companies, most notably Union Carbide.

      Call Manager and Unity were both to run on Windows NT servers, Cisco announced back then, and the primary network service provider was to be Equant, chosen for its MPLS (multiprotocol label switching) support for guaranteed quality of service and security. The contract followed pilot sites of 1,000 users in California, Belgium and Singapore, and was to be followed immediately by 750 more trial users in Sao Paolo, Brazil.

      Early this month, EDS and Dow said they had reached a “mutual agreement” to cancel the contract. On July 28, EDS reported a $135 million pretax termination-related charge for an unnamed client that most industry watchers believed was Dow Chemical.

      IBMs Todd Kirtley, general manager of the industrial sector at IBM Global Services, could not provide details, saying only that “Cisco will continue to be a key part” of the project, along with Equant and MCI for networking. Both Dow and Cisco turned down requests for interviews.

      It appears that few can afford to go public with what they know on the story, risking Ciscos ire; not IBM, which, according to an industry analyst, does more than a billion dollars worth of business yearly with Cisco. Not some analysts, who count Cisco among their clients.

      Not even another singed VOIP customer, Merrill Lynch, whose Cisco IP telephony deployment also diverged from plan last year and wound up a combined IP and TDM solution with Cisco and Avaya. Merrill was also under pressure not to drop Cisco, an analyst who requests anonymity suggests, for fear of losing its considerable brokerage business with the company.

      This analyst reports hearing from Sao Paolo that integration issues there were “quagmirish.” Several sources note that Dick Brown, then the CEO at EDS, was very aggressive in getting business, underbidding on some projects and agreeing to timelines that could not be met, ultimately dooming the agreement.

      Gartner Groups Eric Goodness agrees that a “cone of silence” has been dropped over the EDS story. To add to the enormous technology challenge, he points out, different countries presented different regulatory environments. (Some countries even ban VOIP toll bypass in the interest of protecting the business of their national phone companies.)

      /zimages/2/28571.gifLingo is offering international VOIP numbers. Click here to read more.

      According to a major Cisco systems integrator, Ciscos John Chambers has been negotiating hard with IBM Global IT services to keep Cisco VOIP equipment front and center for DowNet. “Cisco is standardizing on IBM servers–its some leverage,” he notes. He also reports that Ciscos unified messaging and call center adjunct projects have run up against a lot of integration problems.

      “Incrementally, they get better,” he says. But he can list issues with malfunctioning displays on multiline phones, inconsistent user interfaces between desktop and wireless handsets, and other problems that add time to a project.

      Cisco has badly needed to prove that its Call Manager IP telephony system can scale. Its initial entry into VOIP, through its acquisition of Selsius Systems, foundered on scale and required a total rewrite of the Selsius system kernel. “Since then, theyve rearchitected a lot of things,” says the analyst. Its also widely expected that Call Manager will be ported to Linux and be offered on both OSes.

      Next Page: A multivendor outcome?

      Multivendor Outcome


      ?”> Ron Gruia, an analyst at Frost & Sullivan, speculates that Dow Chemicals outcome may be similar to Merrill Lynchs, with a mixture of Avaya and Cisco solutions in different sites. This jibes with rumors heard by the integrator.

      In fairness to Cisco, a lot of this replacement story is the inevitable fate of a vendor entering the VOIP game at its outset. “With a lot of these announcements, technology changes by the time they get implemented,” says Daniel Briere, CEO of research firm TeleChoice.

      “New products come out. For instance, Verizon announced a big deal with Juniper networking gear a year and a half ago. By the time they did it, they found that the market replacement requirements made them deploy Cisco right alongside Juniper,” Briere said.

      But Gartners Goodness comes down a little harder on the vendor. “Everyone is beating up on EDS on this and rightfully so, but theres some responsibility incumbent upon Cisco, for EDS and Dows sake, to make this work,” he adds.

      Certainly, Cisco continues to announce a string of customer wins for IP telephony, and the latest large one–at The Boeing Co. for 150,000 employees in 48 states and 70 countries–gives the company a chance to show us what “incremental” changes have accomplished in its gears scalability.

      /zimages/2/28571.gifClick here to read about Covads business VOIP, which follows an unusual model.

      Theres a lot to be learned here if more details ever come out. How much of the already purchased equipment will be used? When the project was launched, very early in VOIPs timeline, SIP (session initiation protocol) did not yet have the VOIP imprimatur it has today. Are the desktop phones being kept? Can their firmware be reflashed with SIP–which Cisco now supports?

      To what extent might IBM–now contracted to “manage” Dows network and expected to use its Tivoli system to do so–host management of the voice aspect, and will some of this be subcontracted to Equant?

      Will we learn that it was unrealistic to take on the role of bringing offices in 63 countries under one IPT vendor? Perhaps what this story will prove is that far-flung enterprises must learn to live in multivendor, TDM-IP harmony. Certainly, there are VOIP switching outsourcers looking to prove that very point, with their own offers to normalize the signaling of different PBXes through their own network servers. Equant is one of them. But we have to wait to hear their success stories at this scale, as well.

      In the meantime, Id be eager to hear from those with some knowledge of the project, its stumbling blocks and redirection. While I wont post this information as fact without attribution or secondary confirmation, it will help me learn (and share) the best questions to ask and practices to adopt in considering large-scale VOIP deployments.

      /zimages/2/28571.gif Check out eWEEK.coms VOIP & Telephony Center at http://voip.eweek.com for the latest news, views and analysis on voice over IP and telephony.

      Ellen Muraskin
      Ellen Muraskin is editor of eWEEK.com's VOIP & Telephony Center. She has worked on the editorial staff at Computer Telephony, since renamed Communications Convergence, including three years as executive editor. Muraskin's work has also appeared in Popular Science magazine and other publications.

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