Everyone is a (VoIP) phone company

This is one of those oh shit type stories. Baseline magazine has an interesting case study on Heinz, which has 37 different locations in Europe. It has basically replaced most of its voice contracts with a company owned IP-PBX service, which has allowed them to cut costs seriously.

Let’s say you want to connect 37 branch offices here in the States. At going rates, the cost of connecting them by a private frame relay service runs about $61,000 a month. But if you put the connections on the Internet and use virtual private networks to connect the sites, that fixed cost drops, to an estimated $39,000 a month. Which could make large corporations the driver of how communications services get deployed in the future—and who controls relationships with small and medium-sized companies. Why wouldn’t a company like farm equipment maker Caterpillar, for instance, want to put its trading network under its wing, if it can control costs, features and services under one master quality-of-service agreement with an Internet access provider?

It shows that if mega-corporations think creatively, they can become their own phone companies. They can interconnect their partners, their suppliers and manufactures on a private VoIP network and basically cut their long distance and business communications costs. If the falling revenues of AT&T and MCI’s business services are any indication, it is happening already. It is only a matter of time before these companies get reduced to being pipe-providers, though quality of pipe will matter in the long run.

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