World Telecommunication Day 1999

IHT October 11, 1999


The Net's Protocol Goes Corporate

Use of Virtual Private Networks and Internet telephony offer cost savings.


The rapid rise of the Internet has made its native protocol the dominant network protocol in use, eclipsing - though certainly not eliminating - the vendor-specific and proprietary protocols that make up the backbone of many corporate network infrastructures. Corporate networks based on Internet Protocol (IP) are increasingly attractive to companies. Two applications in particular, Virtual Private Networks and Internet telephony (also known as voice over IP), offer potentially tremendous cost savings for today's geographically distributed companies.

Today's Internet uses hundreds of protocols for applications such as e-mail, file transfer and World Wide Web access. All traffic on the Internet, however, uses IP at a lower level to shuffle packets of data from node to node.

It is rather amazing that IP, which was conceived decades ago for an Internet that consisted of hundreds or perhaps thousands of connected computers, is robust enough to handle today's global network of tens of millions of such computers, called hosts.

As companies have geared up to use Internet-based e-mail and the Web, new advantages of using IP-based networking throughout the enterprise have emerged. IP-based equipment and software continues to increase dramatically in capacity and performance as it decreases in cost. Savings are even more significant since remote users can access the network through a local call to an Internet service provider for considerably less than the cost of leased lines, long-distance calls or toll-free phone numbers.

Infonetics Research Inc. estimates savings of 20 percent to 47 percent in wide area network costs and 60 percent to 80 percent in remote-access dial-up costs.

Security remains paramount, of course - enter the Virtual Private Network. VPNs allow companies to send private data over the Internet using ''tunneling'' protocols and encryption. Tunneling protocols, such as Cisco Systems Inc.'s Layer 2 Forwarding or Microsoft Corp.'s Point-to-Point-Tunneling, allow local area network protocol traffic to be encapsulated inside IP. Data encryption is used along with tunneling to ensure data security and integrity.

VPN technology and an IP-based network infrastructure allow a company to create a network structure in layers like an onion. Open public access to a Web site forms the outer layer; an extended private extranet for clients, partners and suppliers might form an inner layer, while the company's private intranet forms the inner core.

The cost of sending e-mail across the street or across the planet is the same. Wouldn't it be nice if a long-distance phone call could be priced the same way? It can, using IP-based telephony.

Sound into bits

Voice over IP - sending digitized voices across the Internet in IP datagrams, or packets - has been discussed as the catalyst for a telecommunications industry revolution for years. It is conceptually attractive to users, particularly large corporations with enormous long-distance phone bills.

Products for ''end-to-end'' IP telephony - in which users on both ends of the connection use microphones, speakers and special software on their Internet-connected computers - have been available for some time. The technology was not mature enough to enter the mainstream, however, until call carriage could be handled through IP gateways, which allow people to make calls with their familiar handsets in the way they are used to.

The quality of service is still subject to transmission capacity, although guaranteed bandwidth is likely to emerge as a competitive feature among service providers.

Dataquest Inc., a unit of Gartner Group Inc., recently estimated that voice over IP will grow to a global market of more than $21 billion by 2003.

A recent announcement from Texas Instruments Inc. and Cisco that TI will begin a staged rollout of a 1,000-user IP telephony system from Cisco - combining voice, data, and video in a single network - could be a watershed event. IP telephony has arrived in the corporate mainstream.

Charles Tobermann