Merrill Lynch Phones Ahead

Merrill's Most Demanding User

Jerry Curtis had been living with that annoyance for a year, and he was starting to run out of patience. Curtis is the prickly conscience of Merrill's technology strategy. Tall and rangy, with a beard and shaggy hair, he looks more like the captain of a charter sailboat than the guy who is responsible for making sure that the computer systems used by Merrill's brokers don't crash. He has the right temperament for the job: brutally honest, self-deprecating and smug by turns, and he's not shy about using his power to insist on changes. "I'm not the greatest visionary at Merrill Lynch," he says. "I'm considered ultra tactical."

In his role as a technology advocate for Merrill's stockbrokers, Curtis travels regularly to different offices and watches how the brokers actually work when they're on the phone with customers. "It gives me a different perspective," he says. "I'm really a businessperson who just happens to be marooned in technology. I do email, and I'm technology literate. But I know that the people who I serve are not." That's why Curtis has the least powerful computer at Merrill Lynch on his desk, along with a dinky monitor. His throwback equipment lets him spot the shortcomings of new software applications or network upgrades that have been built and tested on state-of-the-art equipment.

Curtis's "ultra-tactical" perspective was in short supply when Merrill started experimenting with VOIP in early 2000. From the moment he picked up the receiver, Curtis found fault. Why, he wondered, would answering or placing a call from the new phones require a two-step process? First you had to lift the handset, and then you had to push a button to be connected or to get a dial tone.

When you stopped talking, the phone would be dead silent. Curtis kept thinking that he had lost the caller, and he constantly found himself saying, "Are you there?" Sometimes the VOIP phones would drop the connection midsentence. Curtis's fiancée in Florida hated the way the prototype phones would clip off the tail end of the last word in a sentence in order to optimize bandwidth instead of voice quality. She would tell Curtis to call back on a real phone and hang up on him. "It was a bad experience," he says. "They came up with a phone that didn't behave like a phone."

Curtis's list of grievances was long and detailed, and his complaints were obvious -- which made him a great candidate for the test team. The guys down the hall wanted to reclaim his VOIP phone while they worked on the problems, but his boss vetoed that move. Curtis was stuck with the new phone. He quickly became Merrill's most demanding VOIP user.

Interesting things happen when you give an emerging technology to a powerful nonconformist and watch what he does with it. Curtis started carrying the VOIP phone around with him to different parts of the sprawling Merrill Lynch campus in Hopewell, New Jersey and plugging it in to spare data wall jacks. When people called his phone number, it rang through to wherever he was.

He carried it to Florida once, sneaking it out of Merrill's offices in his backpack at the end of the day, just to see how it would work from home. It took a while for the phone to make a connection and to register itself as an active number in the Merrill directory, but eventually he got a dial tone. The voice quality was rough, because Curtis was relying on a slower IP-network connection from home. Still, he was impressed.

Cisco's engineers worked with Merrill to address Curtis's other concerns. They injected the faintest hum into the phone when a call was active, a "comfort noise," so that people would know that they were still connected. The voice quality was groomed to avoid clipping words. When Curtis calls his fiancée these days, the only way she can tell that he's using the VOIP phone is by looking at the caller ID.

Eventually, Curtis got his regular phone back. Far from being a VOIP skeptic, he had turned into a champion of the new technology. "This is a voice business," he says. "But we've been using a device that hasn't advanced very far since the day it was created. Now that we have a new set of features that no one ever imagined, we can start to do a lot of things differently."

The Lure of "Silicon Economics"

The promise of doing a lot of things differently is what most intrigues John McKinley. About a year ago, he pushed Nortel Networks to supply an upgrade to Merrill's conventional telephone-switching equipment so that voice and data could share the same network. That efficiency lopped 25% off of Merrill's phone bill. The next generation of VOIP switches, from Cisco and other suppliers, gave McKinley even more ammunition for change.