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March 14, 2006
VoIP Popular With SMBs Despite VoIP Marketing
By David Sims, TMCnet Contributing Editor
Small and medium businesses in the U.S. who have deployed VoIP systems are saying their new converged voice and data infrastructure has met or exceeded expectations, but not for the reasons VoIP providers have been touting.
The findings come from a study of 560 SMB decision makers, and an analysis of the product and pricing strategies of major VoIP providers, conducted by the Boston-based consulting firm Savatar.
The results, Savatar officials say, "reveal a stark contrast in SMB's perception versus reality of the benefits of VoIP." While providers continue to promote features, SMBs ranked system management capabilities at the top of their list when asked how well their system performed.
SMBs considering VoIP want it because they want lower total cost of ownership and better system management. But is this what vendors are emphasizing in trying to sell to these SMBs?
No-o-o-o-o. Savatar finds that vendors are "still delivering confusing messages about feature sets that the SMBs don't understand." In other words, whereas for SMBs "it's the money, stupid," for vendors it's about… something else.
John Macario, president of Savatar, chides vendors, saying they "need to improve their sales pitches and deliver the right messages crisply."
Take a more or less random example of a vendor hitting the SMB market, Switchvox. They have a nifty new product, Switchvox SMB, a full-featured, easy-to-use IP PBX product starts at $2,495. It's a good product, but how do you convey that adequately to the SMB? All the talk about this feature or that feature, integration and open standards and "real time control panels," it's all great stuff from a VoIP insider's point of view, we know what it all means, the guy running a used car lot, real estate brokerage or restaurant just wants to know "Will it work as well as what I've got now," and "How will it save me money?"
But word of mouth might well make up for any marketing disconnects: Seventy-one percent of the 84 SMBs surveyed that had deployed VoIP said their system met their expectations, 22 percent said their system exceeded their initial expectations.
SMBs say their VoIP system performed "very well" or "well" for routing (76 percent), capacity (69 percent), moves, adds and changes (68 percent), multi-location management capabilities (61 percent), and cost (60 percent).
So what's up with companies who have not deployed VoIP -- 476 companies surveyed? Savatar finds they simply "don't perceive its value nor do they have a strong imperative to implement the technology."
Fifty-five percent of companies expected the cost of VoIP to be "about the same" or "worse," while 56 percent said the same about features. These numbers jump dramatically for system management (74 percent) and migration (77 percent) issues.
The study shows that SMBs who have already deployed VoIP are buying from equipment providers (39 percent), VARs (20 percent) and, to a lesser extent, traditional telcos (14 percent).
Of course now that Skype's jumping into the SMB market with a package aimed at small business, the competition's going to get a lot sharper and the smart ones who learn how to speak the language the customers want to hear will win out.
David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.
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