The rapid adoption of VoIP (Voice over Internet Protocol) technology is the death knell for traditional telephony, according to a study from analysts Info-Tech Research Group (ITRG) of London, Ontario.

The firm said that 23 percent of small to mid-sized enterprises have already implemented VoIP technology and that number will grow to 50 percent within the next three years.

"VoIP is displacing traditional telephony services a lot faster than anyone expected," said George Goodall, research analyst at ITRG. "It means a whole change to the look and feel of an organisation’s IT infrastructure.

"While one network that handles applications and telephone calls is an IT manager’s dream, the speed with which VoIP is coming to the market might be an IT manager’s nightmare," Goodall said. "Senior managers are demanding the cost savings associated with VoIP, vendors are scrambling to reinvent their offerings, and IT managers are scrambling to implement the technology."

Goodall points out that some traditional telephony infrastructure companies are meeting this challenge. "Companies like Nortel and Avaya are aggressively introducing new VoIP products to the SME market. It may be too late," said Goodall. "They’re racing against a group of young companies with products that specifically address the infrastructure limitations of SMEs. These products aren’t just scaled down versions of large enterprise systems. Potentially, they’re category killers."

Goodall predicted that within three to five years the majority of enterprises will have switched some portion of their network to VoIP. "By that time traditional telephony vendors will have met the challenge and reinvented themselves, or they’ll be dead," he predicted.



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