SMBs Dial Up VoIP
Adoption of VoIP in the SMB market is gaining momentum, according to a new study by Yankee Group. Though penetration rates are still low (6 to 8 percent), "Assessing the SMB VoIP Market," found that new service models combined with the benefits of VoIP could mean an upswing for this market in 2006. It found that hosted VoIP solutions are particularly attractive, with 70 percent of SMBs indicating they would prefer a hosted solution to a premise-based one.
"There's a ton of noise and momentum in the marketplace for VoIP, especially among SMBs," says Matthew Del Percio, associate analyst, SMB strategies at Yankee Group. "That said, this momentum hasn't translated into penetration yet. We're still in the early adoption phase." SMBs are slow to take the VoIP bait, because they lack the money and IT staff to evaluate, purchase, and implement. Second, there is much confusion over how these solutions work, the different types of service models that vendors offer, and the multitude of vendors making these offers. "If you take the four different types of service models and multiple that by the number of vendors that offer VoIP solutions, that's a lot of information to understand," Del Percio says.
The first model includes broadband solutions, or accessing voice over a normal broadband Internet connection. Of the four models, these are the most simplistic and are becoming more common among the general public. The second includes hosted VoIP solutions, essentially VoIP's equivalency to on-demand. SMBs don't need to worry about an upfront purchase fee, maintenance and support costs, or the support equipment, such as IP/PBX. A third-party service provider takes care of all that. The customer simply pays a monthly fee and has access to all the features and functionality that VoIP has to offer. Next is managed VoIP solutions, which are similar to hosted solutions except the support equipment, like an IP/PBX, is housed with the SMB. The implementation, support, and maintenance of these solutions are handled by a third-party service provider. Last, there are do-it-yourself VoIP solutions, which are like managed solutions, only all maintenance and support is handled in-house by the customer. In general, larger SMBs with greater financial assets and IT support go for these solutions.
With 70 percent of SMBs stating they would prefer a hosted solution to a premise-based one, Del Percio says these newer service models offer great potential for VoIP to penetrate deeper into that market. "The hosted and managed models clearly offer a lot of advantages. The big difference between the two is that some companies prefer to let a service provider handle the support equipment. In the event of a disaster, they prefer to have that equipment housed someplace else where it was safe," he says. "On the flip side, some companies have compliance, control and security issues to consider, so they want that equipment on-premise. Either way, you're taking advantage of the cost benefits of both."
The benefits of VoIP are both quantitative and qualitative, according to the report. SMBs can utilize VoIP to make long distance phone calls via the Internet without incurring long distance charges, can make conference calls without utilizing the services, or costs, of a third-party bridging service, and can eliminate the need to pay a phone service provider money each time the want to move, add, change, or remove a phone line. As for productivity, people can call just one number and the employee can have calls forwarded to either their office phone, voice mail, cell, home phone, or any combination, during certain times of the day and for certain numbers. "This makes workers more accessible to their clients, customers, and fellow workers," Del Percio says.
SMBs looking to change their phone systems and services must first establish a business case, create an implantation plan, and then take the time to choose a VoIP vendor or service provider that has the experience and will offer the best package. For service providers to advance in this new market, it is crucial that they understand the operational challenges that separate an SMB from a midmarket or enterprise organization.
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