Hold The Phone

At El Camino Hospital in Mountain View, California, refilling a patient's IV drip used to be a convoluted, drawn-out process. When a nursing assistant noticed an empty IV bag, he'd push a call button in the patient's room to alert the central nursing station and then wait for someone to respond. The nursing station would page a nurse, wait for an answer, and tell the nurse which patient needed a new IV bag. It often took 15 minutes to get a new bag hung--a simple task that took place dozens of times a day.

Last year, some of the nurses and nursing assistants at El Camino began wearing a small, voice-activated wireless device that allows them to communicate directly with one another. Thanks to that device, made by a Silicon Valley startup called Vocera Communications, it now takes just a minute or two to start a new IV drip. "We've eliminated the middleman part of conversations," says Chris Tarver, who manages a group of surgical and pediatric nurses at El Camino. "The nurse and nursing assistant can talk back and forth, and doctors can get a hold of nurses much more easily. When you need a new IV bag, or a pain med for a patient, it gets taken care of immediately."

The device, usually clipped to a nurse's scrubs, is physical evidence of a quiet revolution that's changing the way workers use the telephone. That revolution is Internet telephony, sometimes called "voice over Internet protocol" (VOIP) technology, and it's taking hold in such places as hospitals, Wall Street brokerages, law firms, even National Basketball Association franchises. Just as the Internet revolution made it more efficient and less expensive to ship gigabytes of data from one place to another, Internet telephony is making talk even cheaper. It's also turning the staid, underappreciated telephone into a more powerful and flexible device.

What happened is that Internet telephony has finally become reliable enough for big companies. And the equipment costs, once prohibitively high, are now competitive with those of traditional PBX office phone systems--even though Internet systems offer far more advanced functions, such as popping up your most recent email correspondence with a caller when your phone rings. "The economics finally make sense," says Nick Lippis, who follows the business at Lippis Consulting. "What companies are wrestling with now is how much they do and how fast."

Internet telephony simply means routing voice calls over a data network. It allows PCs and phones to link together, bringing sophisticated features to a 19th-century invention. It lets workers bring their own phone extensions to branch offices and hotel rooms. It allows doctors and nurses, such as those at El Camino, as well as salespeople at electronics retailer Best Buy, to communicate wirelessly, making and receiving calls without the airtime costs of cell-phone usage.

But don't confuse these business-oriented systems with the rash of consumer Internet-telephone offerings that plug into a PC and aim to eliminate long-distance phone charges. With those systems, quality often suffers as calls are bounced around the Net. Corporate Internet telephony reduces costs by using the company's own internal data network to carry voice calls from one office to another, or by using DSL or cable modem connections to link workers at home to the head office. (JetBlue Airways, for example, uses Internet telephony to send reservation calls to call-center agents working from home.) But when you need to phone a faraway customer who isn't on your internal network, the systems will still hand you over to the old long-distance company. (Slowly, though, many of those phone companies are shifting their own networks to the Internet, because sending voice as data allows them to wring more capacity from existing networks without adding new lines.)

Sellers of Internet-telephony gear, such as Cisco Systems, Avaya Inc., and Mitel Networks, are seeing a surge in interest--and purchases--even though the technology has been around for several years. Cisco has 13,000 customers for its Internet-telephony products, and more than 2 million telephones in service. For the first time ever, Mitel expects to ship more Internet telephones this year than traditional phones.

Companies that are deploying Internet telephony are looking for the productivity and flexibility that come from allowing a very mobile workforce to stay linked to their desk extensions no matter where they are. Mark Banner, senior partner at law firm Banner & Witcoff, uses a "softphone," software that runs on his laptop, when he travels for trials. "I'm out of the office about half the time," Banner says. "If I'm off at a trial, I may be gone for two or three weeks. So I'll be at my hotel with a laptop, and calls come in to me the same as if I were in my office." When connected to a high-speed line, the softphone--with a handset plugged directly into a laptop--allows Banner to initiate calls from his database of contacts, or assemble conference calls easily using a point-and-click interface.