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Telecommunications: Can Cisco Answer the Call?
9/29/2004
After six years of disconnects, the networking giant’s VoIP strategy finally makes the grade with universities.
When Larry Levine reaches for his phone, he touches the future. As director
of Computing Services at Dartmouth College (NH), Levine had
a hand in one of the latest voice-over-IP (VoIP) rollouts in higher education.
Indeed, Dartmouth this summer deployed VoIP phones from Cisco Systems Inc. (www.cisco.com)
to its faculty and staff members. Over the next 18 months, the Ivy League school
will deploy VoIP services to all of its students, representing 7,500 IP phone
extensions.
Dartmouth isn’t alone. After several false starts, hundreds of colleges and universities are dialing up VoIP in an effort to slash long-term telecom costs, ease management headaches, and consolidate digital traffic onto a single network infrastructure. Moreover, anecdotal evidence suggests most university VoIP rollouts involve Cisco Systems. “Cisco is clearly the most advanced and experienced VoIP vendor, no question,” asserts Levine.
Adds Perry Hanson, CIO of Brandeis University (MA), which has 6,500 IP phones from Cisco, “They have many years of VoIP experience. Everyone told us voice-over-IP wasn’t ready. But it is.”
Cisco’s customers evidently agree. The networking giant commands roughly
42 percent of VoIP phone shipments, according to Synergy (www.synergyusa.com),
a Dallas-based consultancy and market research firm. Cisco sold more than 437,000
IP phones in the second quarter—easily outpacing competitors—and
sales of such devices are roughly doubling annually.
But that wasn’t always the case. Flash back to January 1998. Titanic
was No. 1 at the box office, John Elway won his first Super Bowl, and Cisco
CEO John Chambers was set to unveil a five-phase strategy for integrating voice,
video, and data on IP networks. At the time, Chambers predicted that Cisco’s
convergence strategy would inspire massive customer migrations to VoIP networks
by 2001. Like his peers at such rival firms as 3Com Corp.(www.3com.com),
Chambers said VoIP would cannibalize long-distance toll charges and expensive
plain old telephone service (POTS) in the late 1990s, thereby slashing overall
telecom costs for universities and other vertical markets.
Many pundits believed Cisco would indeed dominate VoIP, emerging as the Ma Bell of IP telephones for corporations and universities alike. After all, Cisco commanded more than 50 percent of the network switch and router markets. And as for dominating the higher ed market, Cisco’s roots in academia ran deep. The company was founded in 1984 by a small group of Stanford University (CA) computer scientists, and Stanford President John Hennessy serves on Cisco’s board. Moreover, Cisco Chairman John Morgridge focuses most of his time on the education sector, promoting information technology as a means to empower students.
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