Virtual Office Resource

For those of us involved in the creation and growth of voice communications services using the Internet, we have projected for some time that real value was to be accrued not by the mega-corporations but by the small businesses seeking ways to level the playing field with the “big guys” and carve out a niche for themselves. A recently released report, US Business Spending by Size of Business and Vertical, 2010–2015: Business IP/VoIP Communication Services” fromIn-Stat (News - Alert) Research (http://www.in-stat.com/) has put concrete projections to our speculation. Digging into these forecasts could be valuable, but in any case, the growth of VoIP usage in the small business arena seems to be unstoppable.

In the report, In-Stat projects “that the small office (1 to 4 employees) spend on broadband IP telephony will increase by 83% from 2010-2015.” That may at first seem like a gaudy growth percentage but we need to keep in mind that we were starting from relatively small numbers. Without really dissecting the methodology, I am actually surprised that the growth rate isn’t higher! In addition, it is unclear precisely how the researchers have defined “broadband IP telephony.” They indicate that their definition includes the “digital” voice services marketed by cable companies but then go on to say that it does not provide the same scalability as a hosted VoIP solution. I thought “cable VoIP for Businesses” WAS a hosted VoIP solution!

I can draw two immediate inferences from the published summary of this report. Firstly, it seems clear to almost everyone that the use of “Virtual Office” or hosted phone services for business will continue to grow and be especially valuable for the 1 to 20 employee business. This includes ongoing businesses and entrepreneurial start-ups. Will the growth rate be 83% over the five year period of 2010 to 2015? That’s only an average of 16.6% per year. Lower capital investments and dramatically reduced monthly recurring operating costs are the primary drivers and intuition tells me that 16% annual growth in a time of economic belt-tightening is VERY conservative. My second inference is that we do not yet have a clear commonality of terminology. What good are projections if we cannot agree on what “Business IP/VoIP Communications” includes?

As an active industry participant and an interested party in understanding the drivers and expectations for where the VoIP revolution is heading, I welcome research that can be evaluated and, where appropriate, incorporated into the psyche of our industry. My analytical side, however, cautions me not to take research prognostications at face value without considering the methodology, assumptions, and parameters that have gone into the work. Who knows for certain – without spending $15,000 for this report (and maybe not even then?) – how these growth percentages were derived and how much reliance can be placed on them? For considerably less cost to you the reader, I am going to forecast that the rate of growth for business VoIP services in the US for 2 to 20 employees between 2010 and 2015 will be ---103% - more than doubling over that period of time. Who is to say that my educated wild guess is any less relevant? Nonetheless, we all seem to agree that this is a growth area.

The real question is what does that mean to our industry. It means that we will have gone from the rabble on the outside to the mainstream, and we will be expected to deliver high quality, reliable, economically priced services. However we may define it, broadband VoIP for business is here to stay for the foreseeable future.