VoIP use among small - to medium-sized businesses (SMBs) is
growing, but according to research released by telecom consulting
firm Savatar, VoIP is still a confusing area for many SMB telecom
decision makers.
At the VON 2006 conference in Boston, Savatar released the
findings of a survey that asked more than 500 SMB telecom decision
makers about their VoIP plans and examined how VoIP fits into their
business needs.
John Marcario, Savatar's president, said many SMBs examining
VoIP find buying the technology a difficult process, but the study
found that despite the difficulty, many SMBs are still enthusiastic
about VoIP and the possibilities it introduces.
According to the study, of the 560 SMBs surveyed, 17% have
deployed VoIP -- an increase of 2% over the first quarter of this
year and a 5% increase over the third quarter of 2005. However,
companies that have yet to deploy VoIP said that they are confused
about what solutions to buy and from whom to buy them. Seventy
percent of SMB decision makers are still unclear where to turn for
the best VoIP options, the survey found.
One hindrance, Marcario said, is that VoIP providers have not
connected with buyers in an effective manner.
"Providers are still not generating demand for VoIP with SMBs,"
Marcario said. "Providers have a wait-and-see attitude coupled with
a quote process that takes more than a month, and that's not
helping them capture the market. SMBs need to be educated about the
benefits of VoIP; they'll buy from the provider that can help them
make the decision on products that are economically advantageous
for [their] business."
The silver lining, Marcario added, is that once SMBs do make the
leap to VoIP, they are highly satisfied with the results, going so
far as recommending it to peers. Once they have deployed VoIP, 69%
of respondents said they would highly recommend the technology,
while 22% said they would recommend it. SMBs are also interested in
buying complementary services like wireless, though services are
not always top of mind for SMB decision makers.
The survey found that many SMBs don't know who provides
business-class VoIP solutions. When asked "Whom do you think of as
a business VoIP provider?" many answered nontraditional telecom
companies, cable companies and ISPs. Those three categories showed
the most growth from the first quarter to the third quarter of this
year. Nine percent of SMBs said wireless companies come to mind as
business VoIP providers, and 11% said they could think of "no one"
that provides business-class VoIP, edging out traditional telecom
companies, which hit only 10%.
SMBs still have no preference for particular VoIP service
providers, Marcario said. VARs, or authorised partners of large
companies such as Cisco Systems Inc. or Nortel Networks, were cited
by 38% of respondents as their preferential service provider.
Nontraditional telecos accounted for 19% of purchases.
Throughout the study, SMBs sent a clear message of their VoIP
preference and stated that they want lower total cost of ownership
(TCO), lower monthly recurring costs (MRC), and better system
management from their VoIP systems. Sixty-nine percent said
economic factors such as TCO and MRC are the most critical elements
of their VoIP decision-making process.
"Buyers know exactly what they care about, and it's not the
features that everyone wants to talk about," Marcario said.
"Providers need to drive the economic and systems management
messages home."
Marcario said many SMBs are considering VoIP for the economic
benefits, but very few understand the TCO involved with an
on-premise IP PBX, a hosted PBX or a converged voice and data
product. In order to determine the TCO, he said, SMBs must
determine the up-front cost of the new system, the monthly costs,
and the additional annual costs. From there, they must divide that
total by the number of months in the contract and then by the
number of employees using the service. That determines the monthly
TCO. From there, SMBs should determine whether that TCO is lower or
higher than their current phone and data spending.
"SMBs really need to understand the concept of TCO in a really
straightforward way," Marcario said. "They have to get themselves
educated about the economic benefits. I don't think VoIP is for
everyone. If I'm a 10-person company with a $40 per month
long-distance plan, VoIP has no value proposition."
Savatar's research found that on average, an on-premise IP PBX
has a monthly TCO of $50 to $80, while a hosted PBX is between $50
and $60, and a converged voice and data package is between $25 and
$30 (but lacks some of the feature set). Marcario also recommends
that if an SMB is looking for an on-premise solution, it should
look for a vendor that sells it as a managed service.
Elsewhere, the study found that 53% of SMBs that deployed VoIP
want to buy wireless from their VoIP provider, and 43% of those who
haven't deployed VoIP said they would purchase wireless
technologies from providers. SMBs, Marcario said, want to
consolidate their telecom spending.
"While the fixed mobile convergence feature set is maturing,"
Marcario added, "the market is not yet there, and providers aren't
yet skilled at selling basic VoIP products. Trying to sell services
based on the latest market buzz is like the computer industry
trying to sell the latest and greatest processor when the operating
system still crashes. Providers should focus on developing the SMB
VoIP market first and then up-selling their customers on useful
enhancements like wireless."
Overall, Marcario said, SMBs with interest in VoIP must start
researching their options and determine what VoIP path is right for
them. He added that providers must also recognise that the SMB
space is an emerging market for VoIP that they need to embrace.
"In the enterprise, in big business, the game is over," he said.
"The enterprise is switching to IP…. The SMB market is
significantly less mature than that."