Technology

Technical features of the disruptive innovation
At the earlier stage, VoIP grows from PC to PC phone from online services such as dialpad.com etc, which uses public IP, providing lower quality of voice due to delay and crosstalk to name a few. Later, VoIP employs managed-IP standard, thus providing a better quality of voice communications.
The technical feature of VoIP is much different from the prior technology (PSTN), which generally provides the fast and reliable call setups and clear connections. For business organizations, there are many factors to take into account when they decide whether to use VoIP in their network they include bandwidth efficiency, cost efficient and quality concerns.

Bandwidth Efficiency 
The reasons of growing number of VoIP applications and users are the technology possesses specific benefits for users in which the pricing for voice communication reduce significantly. For carriers, employing the VoIP technology is also beneficial as it could increase the bandwidth efficiency in the transmission line. Figure 1 shows the circuit-switched voice communication that used in the PSTN system where one single line is dedicated to one call session.

As this technology may provide drawbacks, the development of VoIP eliminate this drawback by assigning a line to users only if they have some information to be sent through the network by dividing the information into packets (Figure 2).  This increased utilization of bandwidth of transmission media provides the most bandwidth efficient method of integrating divergent technologies.

Cost Efficient
Another feature of VoIP is their characteristics of providing the cost efficient. This is important since costs of telecommunication for business organizations account for large portion of their operational costs. This costs concerns emerge as VoIP technology could optimize the bandwidth utilization.

Quality Concerns
In addition, in terms of quality, VoIP technology presents the at least four benefits that offset the potential drawbacks as following  

Excellent Quality. Todays VoIP technology has better quality than VoIP at early adoption who is PC-to-PC communications (public IP network) since the transmission is delivered in the private IP network

Flexibility. Concerning the flexibility, VoIP system enables users to do things that are not provided by traditional phone technology that include receiving calls at handhelds devices such as personal digital assistants (PDAs).

Security. Recent development in VoIP has provided a higher secured network that discourages hackers to intercept a phone call (Alexander, 2005).

Illustration of impact for Cisco IP Phone
The development of computer technology has driven the series of innovation that provides better quality and lower costs for communication technology. This is achieved since in addition to storage function, information technology also deals with information processing, including data manipulation so that information can be sent through a network by occupying small amount of bandwidth.

In voice communication type, for example, the development of information technology within the past two decades has also grown as in mid 1990s, the voice communication is attempted to be sent through the data channel (internet network) and further attract online portal to provide free internet call though the quality is terrible.

Nowadays, as the information technology evolves into the next level where it now carries voice communication much better than that a decade ago, the business of VoIP, which stands for voice of internet protocol grows tremendously.

Regarding the value chain of Cisco IP Phone, we find that Cisco deliver the creation of superior Performance. Cisco products evolve into fulfilling the innovation radar as suggested by Sawhney, Wolcott, and Arroniz (2006) that it involves several aspects to win the market.

In terms of offering, for instances, Cisco IP Phones provide three kinds of solutions wireless, wired, and soft phones. In terms of Presence, Cisco IP Phones also involves intermediaries, the reseller, in order to expand the availability of IP phones throughout the world.
This is in line with Value Chain concept where the superior performance is the result of excellent process of assembling value within a product that has several stage of activity from receiving raw material until the product is in the hands of consumer (Figure 4).

Positioning the disruption in the broader industry value chain
The development of IP telephony has driven Cisco to develop the family of Cisco IP phones that take advantages of available IP network in the world. In any network, Cisco IP telephony provides the unmatched solutions to help organizations at any sizes to obtain the greater and secured communications.
Regarding the regulation of internet telephony, in the U.S., the passing of HR1291, a House bill that opens the door to the regulation of IP telephony, invite a protest since though it is internet friendly, FCC would be able to tax the internet telephony (Neighly, 2000).

The so-called Voice over Internet Protocol (VoIP) becomes the technology that for telecommunication carriers incumbent could be considered as a disruptive technology. This is because initially the VoIP technology really challenges the prior technology named PSTN (public switched telephone network). However, as the demands for low-cost services are growing, telecommunication carriers or operators start adopting the technology and develop better quality to complement the earlier technology.

Persuasiveness of arguments to adopt VoIP
The so-called Voice over Internet Protocol (VoIP) becomes the technology that for telecommunication carriers incumbent could be considered as a disruptive technology. This is because initially the VoIP technology really challenges the prior technology named PSTN (public switched telephone network).

However, as the demands for low-cost services are growing, telecommunication carriers or operators start adopting the technology and develop better quality to complement the earlier technology. The situation should encourage managements of a company to adopt the VoIP to comply with the costs efficiency in the telecommunication costs.

For Cisco, the development of IP telephony should encourage them to provide the new product in the IP telephony series. According to Figure 5, it is estimated that the market for IP telephony continue rising that should driven Cisco to flood their market with their products to strengthen their presence in the niche market.