For years, the pervading strategy for voice communication on Wall Street was to reduce cost to its absolute minimum. The logic was that voice services - beyond a dial tone - offered no competitive advantage, so providing service for the least amount of money made the most business sense.
The debut of Voice over Internet Protocol did little to change this thinking. Though VoIP was seen as a sexy new technology, its initial promise still was in the ability to reduce costs. Firms believed that they might be able to disband their voice networks and move that traffic to their IP infrastructure. But, as with most new technology, there have been unforeseen bends in the VoIP road - both for better and for worse.
For starters, VoIP has fallen short of the 100 percent-reliability standard that Wall Street's sensitive communications require - voice quality can be lacking and voice packets can get scrambled, dropped or sent out of order. "VoIP's prospects on the trading floor are still not a slam dunk and [adoption] will be a slow process," says Dushyant Shahrawat, a senior analyst with Needham, Mass.-based TowerGroup. However, firms that have given the technology their full attention have discovered the ability to combine the best of voice and data and write applications that enhance productivity.
Lehman Leverages VoIP Further
Lehman Brothers began down the VoIP road in 2000, working with Cisco on a pilot and moving to full production in 2001. It didn't take long, though, before Lehman started looking for ways to leverage its new VoIP network further. The firm hit the market for applications that could take advantage of its all-in-one network.
But, according to Phil Palevo, vice president of network engineering at Lehman Brothers, piecing together off-the-shelf applications was an untenable strategy. "We had to make sure each application was compatible with our IT infrastructure from Cisco," he says. "And whenever we did a Cisco upgrade, we had to make sure the application still worked."
Palevo says that as Lehman added more and more applications - and negotiated service contracts with each vendor - maintenance costs rose in step. As an alternative, he relates, Lehman decided to bring VoIP application development in-house. But, "That has its own issues associated with it because you have to hire developers and [write] code and upgrade," Palevo says. "It's the same thing [as buying applications], but you just bring all the headaches in-house."
A solution to the problem presented itself as Lehman was working to resolve another issue. In 2003, the firm moved employees at its Tokyo branch to a new building. The location switch involved transitioning voice communications from a private-branch exchange (PBX) to an IP-based voice network. Unfortunately, as a result of the switch, employees could no longer patch after-hours conference calls with U.S.-based Lehman executives through the Tokyo office, a process that did not result in additional charges.
Lehman began working with Austin, Texas-based Metreos on a product called Voice Tunnel in September 2003 that restored the lost capability "and more" to Lehman's Japan-based employees, says Palevo. From there, it became apparent that Metreos also could provide the answer to Lehman's larger issue of developing VoIP-ready applications in-house, as the vendor offered a VoIP application builder's tool set - Metreos Communications Application Environment.
In March 2004, Lehman began using the Metreos tool set to produce a click-dial application that allows users in Microsoft Outlook to initiate a VoIP call by clicking on a contact's name. Lehman also implemented a Metreos-built application called Active Relay, which forwards an incoming call from an employee's desk phone to a secondary number, such as a cell phone.
Additionally, using the Metreos tool set, Lehman developed a broadcast application in April 2004 that allows the company to "blast out" a message to all employee cell phones, during a disaster event, for example. "E-mail is one way to get to the user, but if they are not at their desk, they are not going to know what is going on. However, they can still see their phones," notes Palevo.
Joel Fontenot, Metreos CEO, says that his company's tool set allows application builders to focus on end users' needs. "We set out to build a line of demarcation between the switch, which is handling all the call routing, and the application logic that enterprises want to deploy," he explains. "We have a virtual machine that separates the application from the call control system. ... If something were to go wrong with these applications, they don't bring down the call control system or the switch that is actually handing all the telephone calls."