NYTimes.com Article: I.B.M. and Cisco Planning Joint Internet Phone Venture (fwd)

[Guy T Almes <>]

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Subject: NYTimes.com Article: I.B.M. and Cisco Planning Joint Internet 
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I.B.M. and Cisco Planning Joint Internet Phone Venture

May 18, 2004
By LAURIE J. FLYNN





SAN FRANCISCO, May 17 - I.B.M. and Cisco Systems plan to
announce on Tuesday a joint development project to expand
their reach into the Internet telephone market, with Cisco
providing the phone and network technology and I.B.M.
contributing software and integrating the systems.

Executives from the companies called the new relationship
an effort to help increase the acceptance of Internet phone
service among corporate users.

Internet telephony uses the Internet infrastructure to
transmit data, voice and video, and is considered more
versatile and efficient than traditional telephone
networks.

"We view this as being a very big opportunity for both
companies," Don Fitzpatrick, the I.B.M. vice president
involved in the project, said. Mr. Fitzpatrick declined to
provide an estimate about the potential size of the
Internet phone market, but analysts consider it one of the
fastest-growing parts of telecommunications.

Gartner Research, a market research company in Stamford,
Conn., said that within three years Internet phones are
likely to account for the vast majority of business phone
systems, with sales of phones alone reaching $4.2 billion.
According to figures provided by I.B.M., that market over
all is growing at about 30 percent a year.

Until recently, corporations were unwilling to install
large-scale Internet phone systems because the technology
was still considered unreliable and complex. Mr.
Fitzpatrick said that those problems have largely been
solved, and corporations will now find that the
Internet-based systems are far less expensive than
traditional phone systems.

Furthermore, he said, they enable business users to
transmit video and data as easily as they make voice calls.
Many of Cisco's Internet phones feature screens for
receiving data, and some also allow videoconferencing.

I.B.M. and Cisco are aiming first at business customers in
finance and retail industries, Mr. Fitzpatrick said, though
the program will quickly expand to serve other industries.

Among the first companies to use Internet phone products
from the two companies is Preston Gates & Ellis, the
Seattle law firm. A spokeswoman for the law firm said the
technology had provided cost savings over traditional phone
service.

http://www.nytimes.com/2004/05/18/technology/18voice.html?ex=1085884082&ei=
1&en=30d328ea180a2aeb



Copyright 2004 The New York Times Company



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