Hold The Phone

Internet telephony is cheap: “The economics finally make sense.” But as more and more companies are discovering, it also can let you do some nifty things. Voice over Internet protocol technology is keeping workers–in hospitals, Wall Street brokerages, law firms, even National Basketball Association franchises–connected as never before.


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.

Like trial lawyers, hospital nurses are constantly on the move, and the difficulty of staying in touch with them was the single biggest complaint among doctors at El Camino. Last spring, the hospital began experimenting with the Vocera device, which is small enough to be clipped to a lapel. The devices–the company calls them “badges”–are entirely voice-controlled. To reach a nurse, the doctor speaks the name, and the nurse’s badge will in turn ask, “Can you take a call from Dr. Evans?”

“We can say, ‘Call radiology,’ and all of a sudden, you’ve got a radiologist on the line,” says El Camino’s Tarver. “And the phone works on all six stories of the hospital, plus the basement.” It taps into an omnipresent Wi-Fi wireless network that’s also used to provide connectivity for portable computers.

Internet phones plug into a standard Ethernet jack–the same type of outlet a computer uses–and users can carry their phone from one office to another, plug it in, and instantly begin getting calls there, without relying on technicians to set them up. (Most voice-over-Internet phones don’t look much different from standard desk phones.) When Trimble, a GPS technology company based in Sunnyvale, California, moved its corporate headquarters from one side of the street to the other last December, director of global-information-systems operations Shawn Wilde told employees, “If you’re in a big rush to use your phone in the new building, just pick it up and bring it with you.”


Since Internet phones are tightly integrated with the data network, users can control their desk phone from their PC, which makes it easier to take advantage of certain functions, such as setting up and running large conference calls. (Additional participants can be brought in while a call is in progress, and loudmouths can be muted with a mouse-click.) With a feature called “unified messaging,” copies of incoming voice mails can be directed to your email inbox. “That lets you plug a headset into your laptop and handle your voice mail while you’re on a plane, even though you’re not online,” says Wilde. Your answers to those calls are stored digitally on the laptop, then sent when you have a live connection. “Or if you don’t need to respond with another voice mail, you can tap out an email answer, and it’ll get there the next time you connect,” Wilde says.

Others choose to do the opposite, listening to their emails over a telephone. When Avaya vice president of product marketing Jorge Blanco commutes to work in New Jersey–a drive that can last anywhere from 20 minutes to an hour, depending on traffic–he listens to his unread emails, spoken by voice synthesizer, and unheard voice mails. “I can launch a phone call with anyone who sent me a message just by saying, ‘Call the sender.’ I can knock out 15 to 25 messages on the way to work, replying, forwarding, and having live conversations, without having to touch the keypad.”

Most Internet-based telephones can display Web pages on their screens, which lets companies publish data to employees’ phones. Mike Garrison, director of IT for the NBA’s Memphis Grizzlies, sends information about the basketball team’s next game via desk phones to the 125 people who work for the Grizzlies. The team made its full-court press toward Internet telephony in 2001, when Garrison needed to get the franchise onto its feet fast after it moved from Vancouver. Net-based phones will also be part of the team’s new stadium, which is now being built.

There are two lingering concerns that dog the business of Internet phones. One is that overburdening a data network with voice calls can cause a collapse. (Horror stories, many of them outdated, still circulate about firms finding their dial tone gone.) “People tend to forget that they might have to invest more money in their data infrastructure, things like backup power, to support the voice calls,” says Bob Hafner, an industry analyst at Gartner Inc. “This technology absolutely works, but when we hear about problems, it’s usually because it wasn’t implemented properly.”

The other concern is security. According to Lippis, the telecommunications analyst, hackers who get access to a company’s data network can now eavesdrop on calls or make copies of stored voice mail. “That’s causing significant pause right now,” he says. “No one wants a worm or a virus to take down their data and voice networks.


Despite those worries, companies continue to gravitate toward the Internet to make phones more flexible, powerful, and portable. “This is no longer the leading edge or the bleeding edge of technology,” says Trimble’s Wilde. “It’s something that needs to be considered for the productivity hit it can give you. This is very much a technology entering the mainstream now.”

At El Camino Hospital, the technology addresses a pain point–quite literally. “We live in Silicon Valley, so we’re all into techie stuff anyway,” says nurse manager Tarver, who puts on her Vocera device as soon as she arrives at work. “But patients think it’s really cool, because when they say, ‘I need my pain med,’ they see that the nurse gets called, and the issue gets taken care of immediately.” It’s a case in which technology hasn’t just entered the mainstream. It’s entered the bloodstream.

Scott Kirsner ( writes about technology from Boston.