But if anything deserves that label these days, it's telephone calling over the Internet.
Hundreds of thousands of U.S. consumers have signed up for VoIP (voice over Internet protocol) plans -- typically allowing unlimited calling for less than $40 a month -- from the likes of AT&T Corp., Net2Phone and Vonage Holdings Corp. And 56 percent of North American business-phone systems shipped last year were VoIP-capable, generating $2 billion in sales for suppliers, according to Stamford, Connecticut, research firm Gartner. That was up from just 1.4 percent, or $71 million, in 1999.
For financial companies, the opportunity to retool their telecommunications infrastructures, replacing costly copper-wire networks with the virtually free Internet, is proving irresistible. Nine out of ten corporations responding to a recent survey by Nemertes Research, a White Plains, New York, financial industry consulting firm, said they are either using, assessing or planning to deploy VoIP technology. "The financial industry typically embraces and invests in new technologies early, and its testing and deployment of VoIP is accelerating," confirms Patricia Traynor, AT&T's Bridgewater, New Jerseybased head of business sales.
Yet for all this eagerness, there's one surprising disconnect: the trading desks of Wall Street. Although often the earliest technology adopters (buying the latest high-performance computer desktops and high-resolution flat screens, for example), traders trail other departments of their firms in voice-Internet integration.
The marriage would seem to be made for the trading floor, and particularly for the multiline, multimedia terminals -- known as turrets -- that link traders to their clients, colleagues, market centers and data sources. Data networks based on IP, the same technical standard that accommodates VoIP, are already ubiquitous. Nonetheless, turret suppliers like IPC Information Systems and BT Syntegra have had a hard time convincing their customers to buy VoIP at anything close to Internet speed.
Why? Blame inertia. Though Wall Street firms are quick to add or improve peripheral equipment like computer screens, they generally upgrade or replace their networks only every seven to ten years. And recent budget cuts have led many firms to extend those timetables, leaving in place infrastructures dating back a decade or longer.
But there are also technological drawbacks that justify a go-slow approach. Despite recent strides made in VoIP quality, static and outages occur far more frequently than with conventional phone circuits. Even a minor glitch can be costly to a trader talking to a client or counterpart outside the firm's controlled communications environment.
Then there are security concerns. Without proper safeguards, VoIP calls are tantamount to "putting corporate data on speakerphone," warns Elizabeth Ussher, VoIP analyst at Stamford-based research firm Meta Group.
"An external IP network for voice trading is not yet ready for prime time," says Michael Panebianco, vice president of telecommunications at KBC Financial Products USA, the derivatives arm of Belgium's KBC Bank & Insurance Group. The firm has adopted VoIP in its turret system, which is supplied by Etrali, a unit of France Télécom. But KBC uses the technology only for its own intra- and interoffice connectivity.
Etrali and other vendors are hustling to close the technology gap, touting the benefits of IP-based systems that can incorporate voice with data, video and electronic messaging.
The idea of a turret "synonymous with your PC" is gradually taking shape at Boston-based State Street Global Markets, says Jason Gregerman, vice president of enterprise technology services. The State Street Corp. subsidiary is using an IPC system with VoIP, data and video capabilities.
How long will it take for the trading industry to be fully on board with VoIP? About five years, estimates Larry Tabb, president and CEO of Westborough, Massachusetts, consulting firm Tabb Group.
But no one doubts that VoIP is ultimately a killer app. "It's just a much lower-cost alternative to the current environment," says Robert Hegarty, vice president of securities and investments at Needham, Massachusettsbased research firm TowerGroup. "To the extent that you can bring immediacy, reliability, durability and performance requirements to bear on VoIP, you're going to solve some major-league problems."
