Unified Networks --
Creating Opportunities In The Small And Medium Business (SMB) Market
By Jacek Jarmoc, Nortel
Networks
A typical workday at Ubizen, an e-security provider, spans 9 a.m. to 5
p.m. in several time zones spread over five continents. Even with such
extensive demands, Ubizen's 500 employees still enjoy fast, reliable
communication between company offices and locations, thanks to unified
networks that provide Internet Protocol (IP) telephony, unified messaging,
call center and IP routing for company users at any location. Key sites
remain at peak competence with their new communications solution.
Unified networks ' the combination of data, video, voice and other
media onto a single platform ' can enable small and medium businesses (SMBs)
to mimic larger enterprises in their interactions with customers and
partners while increasing the effectiveness of their workflow. SMBs like
Ubizen represent a fertile market for convergence solutions suppliers.
CATEGORIZING SMB MARKETS
To be successful with these companies, equipment providers and service
providers need to view SMBs as distinct groups within a single market.
Nortel Networks conducted three years of research in a variety of
locations and then created a schema that categorizes the organizations in
one of five groups depending on size, complexity, buying behavior and
needs:
Stand-Alone Start-Up
These organizations are price sensitive and they seek a trusted
partner to guide technology decisions. The decision maker is burdened with
a variety of responsibilities, including technology selection.
Company Description: Professional services, such as a one-person
consultancy in its first year operating in a small office home office (SOHO)
market, or small clinics or restaurants.
Needs: Incoming voice and Internet access. Their application
needs vary based on business operations from basic to sophisticated. No
network management is required.
SMB Multisite
These companies are similar to the stand-alone, but encompass
additional locations to leverage local brand name and presence.
Company Description: Any small retail chain.
Needs: Employee expertise sharing and other logistics requires
significant cross-location voice traffic. Requirements are incoming voice
and Internet access (like the stand-alone) plus more sophisticated
requirements, such as the use of virtual private networks (VPNs), access
to a remote server and a greater need for security. There is high
perceived need for network management, but only basic requirements are
actually needed.
Loosely Coupled Franchise-Type Business
In these businesses with diverse size and locations, local purchasing
decisions are guided by recommended products/ procedures from the
franchise. The decision maker is likely to understand some aspects of
convergence technology.
Company Description: Food service, retail or service franchise.
Needs: Data networking to support ordering/logistics with
franchise. Internet access is required, but may be limited to centralized
systems. For example, Buca di Beppo, a fast-growing Italian restaurant
chain with 62 locations, implemented a VoIP and call center solution. The
restaurant saved an average of $300-$400 per month, per location on
communications costs by replacing each location's dial-up connections
with a single T1 line. Like the SMB multisite, there is generally a high
perceived need for network management, but only basic requirements are
actually needed.
Highly Replicated, Many Branch Locations
This group is characterized by a 'cookie-cutter' provisioning of
many branch locations. Existing sites have separate voice and data
networks. Priorities are conflicted between cost control and revenue
generation.
Company Description: Any national retail business with
replicated locations.
Needs: Voice and data networking with a particular need for a
centralized data repository. There is high need for sophisticated network
management. BankAtlantic, a large financial institution headquartered in
the state of Florida with duplicate branch locations, is a good example.
The bank's steady growth and two major acquisitions over the last six
years created a need for a unified network capable of providing
standardized services to all branches. Disparate telephony systems needed
to be replaced and essential features such as voice mail, automated
attendants with customer-controlled routing, fax overflow and four-digit
dialing needed to be implemented while maintaining branch independence.
Nortel Networks helped BankAtlantic deploy a VoIP solution including
Business Communications Manager systems in 22 of its branches networked
over frame relay to a Meridian 81c PBX at the central site.
Highly Integrated, Multiple Locations
Expertise is distributed and inter-office travel is common in these
businesses. This group supports the centralization of applications (so the
application use pattern is similar), and capabilities are standard.
Company Description: Government agencies, manufacturing
businesses or distributed professional services. Professional services
might include a consultancy with multiple locations whose work requires
employees to travel to other offices in collaborative project teams.
Needs: Sophisticated voice and data networking for project
collaboration and customer support is very important. There is a desire to
manage only one infrastructure. Like the highly replicated category, there
is high need for sophisticated network management needs.
WARMING THE MARKET FOR THE SALE
Among these five SMB categories, small businesses, such as stand-alone
start-ups and SMB multisites, are unlikely to have an employee dedicated
to working on the converged solution. Particularly in these two groups,
the decision maker is not likely to have much understanding of
telecommunications technology. This paradigm means they are less likely to
purchase converged solutions.
Sellers can overcome challenges like this one by demonstrating that
SMBs can benefit from converged concepts, such as unified PSTN, PDN and
Internet capabilities. Suppliers can combine their efforts and work via
industry associations, such as the Telecommunications Industry Association
(TIA), which has expertise in this area. Industry organizations can help
vendors reach out to SMBs and increase their awareness of convergence
solutions.
HITTING THE STREET
The SMB market's size, combined with its low adoption rates thus far,
create a great sales opportunity. To begin the sales process, service
providers and vendors should provide education on the benefits of
converged concepts. They can work with organizations such as TIA to
facilitate the education process through success stories, credentialing
programs and end-user forums. Such education informs potential end users
and prepares the way for service providers and vendors to expand their
customer base.
Jacek Jarmoc is the leader of Enterprise Voice Operations at Nortel
Networks. He addressed a group of leaders from TIA member companies on
these topics. TIA is a leading trade association serving the
communications and information technology industry. TIA represents the
communications sector of the Electronic Industries Alliance (EIA). For
more information, visit their Web site at www.tiaonline.org.
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