For years, midmarket CIOs have eyed with envy larger companies' embrace of Voice over Internet Protocol, or VoIP, technology. After all, VoIP can be a good way to cut costs and add flexibility to telephony.

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VoIP bridges the gulf between landline and cell phones and lays the foundation for the nirvana of unified communications. Imagine the productivity boon when workers can route important calls to whatever devices they are using at the time while relegating others to voicemail. "I can be on a train from D.C. to New York, plug my cell into my laptop and it's like I'm sitting in my office," says Adam Hansen, director of security at Sonnenschein Nath & Rosenthal LLP, a Chicago-based law firm.

And then there's VoIP's dark side: tossing dial-tone efficiency into the scary realm of security threats associated with networked PCs, servers and the Internet. The simple fact is that the proprietary nature of traditionally pricey private branch exchanges (PBXes), and the protocols they run, makes them hard to hack. But when voice runs over the same protocols as data, a little hacking knowledge in one realm can go a long way in another.

Midmarket CIOs must weigh these security risks against VoIP's tremendous upside. Yet it's not a matter of choosing or not choosing to adopt the technology. There are ways to minimize risk, such as taking a PBX-VoIP hybrid approach. According to executives who have either made the VoIP move or are in the process, the most important thing is for CIOs to do their homework and set expectations. With VoIP, Hansen says, CIOs need to "find the proper way to deploy it."

They better find it quickly, too. Many midmarket companies are just now deploying VoIP. That's because this segment has lagged large enterprises and very small companies when it comes to VoIP adoption, says Zeus Kerravala, senior vice president of global enterprise research at Yankee Group Research Inc. in Boston. There are a few reasons. Large enterprises typically have capital expense budgets to finance technology updates -- that is, they're more able to spend money to save money.

This was first published in November 2007

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