Voice over IP has had its share of hype. Pundits, vendors, and (gulp) press would have us think all-VOIP networks are right around the corner, ready to handle voice, data, and video with unprecedented efficiency and cost savings.

Yes, true, VOIP's on the way, but it's going to take at least a decade to fully unfold, and penetration rates will differ between enterprises and carriers, according to this month's report from Optical Oracle, Light Reading's subscription research service.

The report, entitled "Deconstructing VOIP," provides a detailed timeline that estimates it will be late 2006 before VOIP ports outnumber traditional time-division multiplexed (TDM) ones on enterprise networks, and perhaps as much as a year after that for the same trend to hit carrier environments.

The long lead time to VOIP is due in part to the longer life cycle for telephony products in general. It takes many years for a generational upgrade of telephony products. Carriers will lag enterprises in VOIP adoption in part because of relative economics (carriers will stay capex-constrained for some time to come).

Driving factors also will differ for each of the two key VOIP markets:

"Deconstructing VOIP" profiles the leading players in the VOIP market, including the following companies:

The report also examines the battle lines being drawn between telecom incumbents (Alcatel, Avaya, Nortel, Siemens, and the like) and data-centric insurgents (Cisco, Santera, Sonus, Telica, 3Com, etc.). The rhetoric has reached fever pitch over the past six months, as too many companies are chasing too few capital investment dollars (or euros).

Who will win? After a slow start, the incumbents are offering a better story, especially with respect to feature maturity, customer-controlled migration, and investment protection. But the jury's out on whether these features will be enough to fend off the channel strength of the insurgents (especially Cisco).

Meanwhile, in the carrier space especially, there seems to be room for startups offering solutions that address specific burning needs, such as the requirement to maintain both IP and TDM links simultaneously for a while. Other areas where specialized vendors have emerged include network address translation, security, and IP session control.

Victory for any vendors in the VOIP space won't be quick. The progress of VOIP will eventually change the way we communicate, but it will happen via a multi-year, generational upgrade -- not a big bang.

— Mary Jander, Senior Editor, Light ReadingOptical Oracle's December report, "Deconstructing VOIP," is available to annual subscribers, who receive 12 months of access for $1,250. A single-user license for one copy of the report can be purchased for $400. For more information about the report or to subscribe, go to: www.opticaloracle.com.



Editor's Note: Light Reading is not affiliated with Oracle Corporation.