VoIP – What’s the Real Opportunity for Small Businesses?

By | April 6, 2005

There is a great deal of hype about VoIP technology lately. Research firm IDC predicts that VoIP services will grow from a market of $281 million in 2003 to $6.7 billion in 2007. This is clearly recognized as disruptive technology that is expected to meet the needs of a large segment of the market.

With certain VoIP providers, you can save money, call anywhere for free, drop your service with BellSouth, and many other claims. Read the fine print to find out exactly what you might lose – in some cases, call quality, 911 services and other features you expect. Carriers offer a wide variety of service levels. Many offerings are consumer based with limited features and functionality with low long distance costs as the most attractive feature.

Most of the hype is in the consumer space as the phone-in-a-box consumer offering from Vonage and AT&T’s CallVantage have been very popular. These are limited service offerings that are suitable for a home phone second line with limited features. The service quality is unpredictable as it is based on a best effort service – meaning you get what you get. Service quality can be impacted by the type of DSL or cable service and the volume of data services used by home PCs sharing the same network.

Recent regulatory decisions have created a market environment favorable to VoIP service providers. Service providers have fewer regulatory taxing and reporting requirements making new product launches easier, quicker and less costly for the service provider.

Small Business Applications

The deployment of VoIP to businesses has not received as much attention but there is just as significant a push in the small business and enterprise markets. Many business calls are already being carried over VoIP backbone networks by carriers and large enterprises. More recently, VoIP services are being delivered all the way to the end user due to advances in last-mile technologies, new and improved Customer Equipment, advances in compression technologies and improvements in high volume switching platforms. Enough about the technology – what does it mean for the small business owner?

Small businesses are always looking for ways to get more for their money. There is always a gap between the buying power and, therefore, features available to larger enterprises and smaller businesses. With VoIP, small businesses can get virtually all of the PBX features available to a larger enterprise and in many cases more!

Small businesses are adopting VoIP technology solutions to expand sales and distribution by opening remote city offices (with just a number), improve internal and external communications, integrate communications platforms such as voice and email and conferencing, and many other creative applications.

Expand Sales – A substantial impact VoIP services can have on a small business is the opportunity to expand sales offices to additional cities virtually cost free. By setting up local phone numbers in multiple cities, a small business can show a local presence for customers and vendors yet service the customers from virtually anywhere.

Cost Savings – Moves, adds and changes are amazingly more simple and less costly with VoIP. As a self-service platform, the company administrator can make changes to the phone service in minutes with a point-and-click interface. 800 numbers can be rerouted quickly. Moving a phone from one office to another is as simple as unplugging from the old office and re-plugging to the new office. It is much easier to move lines across the city. The real value is in providers who host the system on a reliable platform to support all locations as a single campus with no capital expenditure on a single location, limited feature PBX.

Improve Communications – VoIP service offerings vary by provider. In most cases, you receive a multitude of new services that ensure that you are just as reachable as you want to be. Calls can be routed through a reach me service so that if your office phone does not answer, it will try your cell phone or home office. You can set “find me” routing schemes for all callers or just VIPs. You also have special handling options for those unwanted calls you want to send directly to voicemail or a busy signal.

In addition, there are a multitude of other large system features that are included in a hosted voice system including simultaneous ringing, hunt groups, ACD applications, Auto Attendant and an Office Attendant console.

Integrate Voice and Email Platforms – Voicemail, email and faxes can be managed through a single interface. You can elect to have your voicemail forwarded to your email for quick review and forwarding to others when you are in the office or on the road.

There are challenges to deploying VoIP to the small business. The primary challenge is ensuring that your service is properly configured to interoperate with the LAN and T-1 or DSL circuits. Proper configuration and installation provides a Quality of Service (QOS) that is expected for business phone service. New technologies enable LAN managers to configure the systems such that the voice traffic is “prioritized” over data traffic to ensure top quality phone service without sacrificing data transmission expectations. Once configured, the VoIP system is as reliable as any other carrier grade phone system.

With all of the opportunities presented by VoIP service, this is sure to be an exciting couple of years as the technology reaches more homes and businesses.

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