VoIP Has Too Much Variation for SMBs
SMBs are still very much in the dark about all the options available to them with VoIP technology, making them less able to take advantage of the cost savings and potential productivity improvements, according to new research from AMI-Partners. "Making the Move to Hosted VoIP or Premise-Based IP-PBX" reveals that most SMBs turn to market leaders like Avaya and Cisco Systems for on-premise needs, and to smaller independents like Covad and M5 Networks for hosting.
Total revenue for the worldwide SMB telecommunications industry exceeded $257 billion in 2005 and is expected to reach $301 billion by 2010, the report states; VoIP currently makes up "a small fraction" of that figure but is growing quickly, supplanting traditional TDM equipment. Total purchases of IP private branch exchange (PBX) equipment, VoIP gateways and application servers, soft switches, and IP phones and adapters are expected to grow from $2.4 billion in 2005 to $9.7 billion in 2010, a CAGR of 31.7 percent. Over the same period, TDM equipment spend will drop from $3.3 billion to just $438 million, a CAGR of minus 33.5 percent.
"Vendors and VARs need to understand customer needs among small and medium businesses, and this warrants a finer market segmentation than currently exists," says Sanjeev Aggarwal, vice president for SMB infrastructure solutions at AMI-Partners and author of the report. "Some solutions are built for medium businesses--mostly premises-based products--but a lot of SMBs don't have the resources to manage them."
The numerous types of on-premise and on-demand VoIP implementations are confusing to SMBs. AMI-Partners lists varieties such as premise-based IP-PBX, managed IP-PBX, hosted VoIP, broadband VoIP, and peer-to-peer VoIP; all of these are available from a number of vendors, each offering their own spin, so the bewilderment is understandable. "The complexity involved in understanding and evaluating the different solutions and vendors, coupled with a lack of voice-savvy IT resources, is delaying what is an otherwise rapid-paced migration of SMBs to VoIP," Aggarwal says.
Many small businesses (defined by AMI as those with one to 99 employees) are only looking for voice products, while medium businesses (100 to 999 employees) are more likely to want more full-featured unified communications products. The muddy picture in the industry leads many to seek recognized brand names first. Vendors need to carefully evaluate the needs of their customers before developing and packaging solutions. "This creates an interesting opportunity to create VoIP appliances built with the small business in mind, that can be plugged in and operated with a minimum of IT resources," Aggarwal says.
The key, though, will be properly targeted solutions for each segment within the SMB space. "Integration with Outlook and Exchange is important to the SMB," Aggarwal says. "People in the industry talk about Microsoft Dynamics CRM or Cisco Systems, but the bigger opportunity here is integration with Sage ACT! or QuickBooks."
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