SMB UC Finally?

In a 2008 TMC (News - Alert) article (www.tmcnet.com/10800.1), I suggested that the SMB market opportunity for VoIP was poised to finally take-off. I suggested that there had been three major impasses holding up broad SMB adoption:

1. Confidence in the reliability, performance and quality of VoIP solutions. Generally, I believe that the technology maturation has reduced the early concerns about quality, reliability and performance. However, there’s a growing awareness that quality needs to be continually monitored; networks need to be adequately designed for capacity, fall-back and recovery — and the potentiality for SIP Trunking reducing telecom expenses has become a growing issue and also affects the reliability/quality issue. Also, VoIP has largely been displaced in the industry’s thinking by Unified Communications (News - Alert) (UC) — as the umbrella term for what my colleagues at UCStrategies.com have defined as “Communications Integrated to Optimize Business Processes.” UC is poised to grow as the economy recovers.

2. Product priced for the SMB space. Many SMB-focused and designed solutions have been introduced as both hosted and traditional CPE-based solutions (also hybrids of hosted/CPE) and have been priced more appropriately for SMBs. The many solution options may make it more difficult for SMBs to make a decision, if they are searching for a solution on their own. Also, the economy apparently affected Microsoft (News - Alert)’s entry into the SMB VoIP space, Response Point. (Microsoft may release a Response Point update at June’s end.) Another fender-bender on the solution road for SMBs is the restructuring of Nortel (News - Alert), historically a major provider of SMB CPE solutions.

3. Channels or Route-to-Market to offer solutions effectively to this space. SMB channels for IT solutions seem to be popping up — or growing — everywhere. A year ago, one would have had difficulty locating an SMB-focused portal on the websites of the traditional SMB providers — the Telcos. Now, many of them appear to have re-discovered SMB and are growing their outreach, support and sales to SMBs. Also, most of the equipment providers have stepped up their focus on SMB channels, perhaps to fill the Nortel vacuum, but it is welcomed. And I expect to see more experiments with retail, such as the initiative of 8X8 with Office Depot, as more SMBs are turning to retail to acquire their IT products/services.

Well, I have to admit I was overly optimistic in 2008 — VoIP thinking has been replaced by Unified Communications (UC); products designed and priced specifically for SMBs have been introduced by many players; questions about reliability and quality issues have been largely addressed but still in-play; and channels to effectively sell to SMBs (e.g., coverage, capability and cost-effectiveness) are still being sorted through — and then the economic collapse happened.

So, what’s to happen now? Is my prediction likely to be changed by only one or two digits (to 2009 or 2010). I have to say, I’m not sure, but optimistic that new business growth at the SMB side of the market will be a leader of the recovery, so, I vote for early 2010. Your thoughts? IT

David Yedwab is a Founding Partner in Market Strategy and Analytics Partners (News - Alert) LLC. Contact him at 908-879-2835 or [email protected]

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