As IP-based voice, data and video convergence projects become more commonplace, some IT managers are increasing their scrutiny of whether such initiatives will provide ample returns on investment.
But at Sunshine Village Ski & Snowboard Resort in Canada's Banff National Park, an IP convergence project started three years ago "has paid for itself many times over," according to Jon Chestnut, director of IT at the Alberta-based resort.
Chestnut said last week that the project cost $278,000 Canadian in 2002, a modest investment compared with some of the massive IP convergence deployments done elsewhere. But Sunshine Village's project involved an extensive network infrastructure upgrade built around Hewlett-Packard's ProCurve switches and a fibre-optic backbone that runs up a mountain for four miles.
The initial cost was paid back within a year through savings on long-distance calls and the elimination of repairs to old phones and copper lines strung along towers that were susceptible to lightning damage, Chestnut said. "We faced astronomical costs to maintain old systems," he noted.
In one example of the cost savings that Sunshine Village has been able to reap, a single leased-line connection to a bank that supported its credit card transactions cost $1,800 Canadian a month - a tab that has now dropped to $10 Canadian, Chestnut said.
In addition, the resort has gained new business capabilities, including IP-based video surveillance and the ability to get data from 1,276 safety switches along a four-mile gondola lift. The IP network has also greatly enhanced financial data transmissions, Chestnut said. Previously, a credit card transaction could take up to 14 seconds, he noted. Now 94 credit card machines at the resort can simultaneously handle such transactions in less than a second.
A voice and data network helps Sunshine Village in Canada save money and improve skier safety. And because of the flexibility of IP, communications are more stable than before. If a cable is knocked out by high winds, a virtual mesh re-establishes a connection to another functional link, Chestnut said.
Voice on Wi-Fi under test
The resort is testing voice over Wi-Fi telephones from SpectraLink, said Chestnut. He wants to deploy dual-mode phones that can convert to cellular operation when workers are beyond the reach of Sunshine Village's wireless LAN.
Zeus Kerravala, an analyst at Yankee Group Research Inc. in Boston, said he has seen network cost savings of up to 35 percent on some large IP convergence projects. The biggest savings can be derived from lower maintenance expenses and reduced IT labour costs, Kerravala said, although he added that many convergence projects are too young to have a real track record.