VoIP Calls On The Midmarket
The Technology is easy to use and saves SMBs some cash
2/6/2006
Source: VARBusiness
http://www.varbusiness.com/sections/strategy/strategy.jhtml?...
By Luc Hatlestad
Voice over IP (VoIP) originally emerged as a technology the enterprise would be most interested in, but it's turning out to be an easier sell for solution providers in the midmarket.
No matter how you slice it, the VoIP market is booming. In December, for example, Infonetics Research reported that IP PBX revenue had jumped 10 percent in the most recent quarter, to $1.7 billion. In addition, market researcher In-Stat recently reported that it expects the overall market for VoIP integrated circuits (ICs) to grow from $208.7 million in 2004 to $1.3 billion in 2009, and that wireless handsets will become another key market for VoIP ICs during that time. It is safe to assume then that almost everyone, from consumers to enterprises, will become acquainted with VoIP during the next five years. But for now, the early adopters are primarily midmarket companies. "These are the folks that are buying VoIP today; in the enterprise, they're just intending to buy," says Dave Woodward, vice president of sales at Calence, a network consultant in Tempe, Ariz. "Enterprise companies are doing their core research because they want to put themselves in a position to build their networks right for IP telephony down the road." Solution providers selling into the midmarket are finding that those clients do a good job of leveraging VoIP technology for a few reasons: It's easier for solution providers to educate people in smaller groups about how best to use VoIP, and smaller companies have a bigger stake in realizing the business benefits of the technology, so maximizing its efficient use becomes a matter of company policy. Paul White, CTO of Deltathree, a VoIP solution provider in New York that sells to businesses, consumers and other resellers, agrees, saying midmarket users take much better advantage of VoIP features, such as call forwarding and the ability to send voicemail to e-mail. "VoIP has a lot of features and benefits for SMB users, and those users are doing more of it," White says. "Because of its ease of use, and also because it's more sophisticated, VoIP is a very powerful tool, particularly for SMB companies." The midmarket's ripeness for opportunity also explains why it's so thick with competitors. And that's only going to intensify over time, especially as value-added services for the technology emerge. "Managed VoIP services will be critical to offer upfront if you're selling VoIP equipment," says Mark Scott, president and CEO of N-able, an Ottawa-based developer of managed-services automation software. Among the companies that are likely to be offering those services are the giant telecom carriers that already are rolling out consumer VoIP technologies, with small-business offerings either in the works or already rolled out. "Companies like SBC and Verizon are selling this to their customer base with back-office and front-office services," White says. "SMBs are always looking for ways to save money and add value to their businesses. When it comes to VoIP, they'd probably rather buy it from a well-known brand." Another factor VoIP solution providers need to consider when selling to the midmarket is security. White says VoIP shouldn't have any more inherent security concerns than traditional phones, unless the VoIP connection is running through a PC. But others insist that special attention is required. "Performance is critical with this technology," says Phil O'Reilly, CEO of Solunet, a solution provider in Melbourne, Fla. "You can't just sell a switching environment; you also have to sell a traffic-management and security solution around it. If you believe VoIP is up-and-coming, these go hand-in-hand."