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SMB Owners 'Apprehensive' About VoIP
[July 26, 2005]

SMB Owners 'Apprehensive' About VoIP

A recent Switchvox study find apprehension among SMBs over VoIP.

TMCnet CRM Alert Columnist

57% of small- to medium-sized business owners are "apprehensive" about the reliability of Voice over Internet Protocol service providers available today, according to a recent survey by Switchvox, who sells PBX phone systems to SMBs.

The online survey also found that 33% of SMBs are concerned about the quality of calls when using VoIP services. 76% of respondents were open to testing out VoIP, as long as a service level guarantee was in place.

The survey found as a recurrent concern the reliability of quality VoIP service.

It's a lucrative field. This April TMC President Rich Tehrani wrote in his blog "I am seeing lots of new devices coming onto the market. Converged firewall, SIP, WiFi, VoIP devices that will let about 50-60 people use VoIP in their offices. The holy grail of VoIP for many of these companies is the SMB space which will be huge adopters of VoIP in the coming months."

As Tehrani says, "worldwide there are hundreds of millions of small offices so the market for such products is huge… [t]he SMB space is virtually untapped and presents a tremendous opportunity for resellers and ITSPs worldwide."

It's being tapped, but more could be done. A report released in May by Robin Gareiss, Nemertes Research executive vice president found the small-business VoIP market increasingly competitive. Nemertes conducted a survey in which "96 percent of enterprise participants said they had either implemented or planned to implement VoIP, while 75 percent of SMB respondents were already doing so," according to Luc Hatlestad.

Gareiss thinks that once cost savings, improved communications and productivity are demonstrated for SMBs, it "should motivate numerous smaller businesses to at least take a closer look at the technology, potentially creating a 'huge revenue opportunity' for vendors and resellers who address the market properly."

Joshua Stephens, CEO of Switchvox said his company has analyzed the results of the study and come up with some recommendations of "key items to look for and be aware of" before switching to a VoIP system:

Find a reliable VoIP provider: Every day there are more VoIP service providers throwing their hat into the ring. Make sure to research specific information on their services and capabilities before signing up. It’s recommended to look for carriers that are responsive when contacted and will offer a service level agreement guarantee.

Know your bandwidth capabilities: Make sure to track how many simultaneous phone calls a company’s broadband connection can handle. One rule to use is that each call will use 100 kilobits of bandwidth. Therefore, if an SMB has 1.5 megabits of upstream bandwidth, it will be able to place at most 15 phone calls with no other Internet traffic.

Get a static IP from your ISP: Many small businesses run into trouble rolling out VoIP when they discover that their Internet connection does not provide a static, unchanging IP-address. Having a static address is a necessity for such tasks as peering two offices together for free phone calls, or having remote extensions for offsite employees.

Investigate Quality of Service: QoS is the ability for a router to prioritize certain types of traffic (like phone calls) over other traffic (like big downloads). Make sure routers can perform QoS, and be prepared to configure it to prioritize VoIP traffic.

Get the right equipment: For a home user, a single-line analog telephone adapter (ATA) is a reasonable purchase, but if users are performing multiple simultaneous VoIP calls, a VoIP-capable PBX system is recommended. Also make sure that any new VoIP-enabled PBX purchased, can work with existing phone services. A system that allows you to migrate to VOIP slowly, rather than jumping in all at once is preferable.

According to analyst firm IDC, the overall VoIP market is projected to increase at a compound annual growth rate of 45% to reach a revenue base of $15.2 billion by 2007. This May Infonetics Research found that North American VoIP revenues topped $1.3 billion last year, and projected an astronomical 1,431 percent market growth by 2009, bringing total North American VoIP revenues to $19.9 billion.

Infonetics says "business-hosted VoIP service revenue will outstrip managed IP PBX services by 2006, driven largely by uptake among SMBs," according to CertCities.


David Sims is contributing editor for TMCnet. For more articles by David Sims, please visit:

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