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January 2009 | Volume 12/ Number 1
The Channel Perspective

VoIP Moving Forward in the Channel

VoIP in all of its forms continues its advance through various market segments.

Sales. As we move forward with SMB sales in the channel, this size of the business unit moving to VoIP will have a large impact on how the sale is made to the business unit and what solution is delivered. Smaller organization will tend to hosted and larger business units will lean toward premises equipment. Direct sales to smaller organizations do not have the return nor the margin required to support such direct sales. As the channel evolved, resellers found that the “sweet spot: appeared to be customers with a 25-station requirement. Sales time, installation and support kept the breakeven point at this level. It has gradually come down to the 15-20 user level as preconfigured solutions have become more readily available.

Hosted. The hosted solutions will be offered to customers via the web or email promotions. Branding will play an important role in this environment as very little direct sales time will be spent developing this market segment. The sales process will include the purchase of pre-packaged service bundles including phones and minutes. These packages will be shipped to the customer for self-installation. It will also be very easy to add additional service and bundles. This market segment is expected to grow from 11 million SMBs to 35 million SMBs by the year 2010, as reported by the Dell (News - Alert)’Oro Group. Hosted solutions will attract smaller organizations and larger companies that have multiple locations and a large number of telecommuters. Agents having a large business list will enjoy great success in this market. VoIP service providers offering hosted solutions should be very concerned about competing with their direct sales or resellers channel that are selling premises equipment.

Premises. Premises solutions will continue to be the preferred choice of equipment for companies with 125 or more users. These solutions will include those that are Asterisk-based as well as proprietary solutions from the major telephony vendors like Avaya (News - Alert), Cisco, and others. It must be remembered that successful sales and deployment into this market segment requires onsite installation and support for deployment. The reseller will play an important role in these sales opportunities.

End-to-End. In both hosted and the premises solutions, quality will play an important role. Pre-site network evaluations should be performed. This will minimize the post installation problems and eliminate finger-pointing. Companies such as Ring Carrier, which deliver hosted services, provide onsite devices which include local routing, network analysis, and diagnostic capabilities, providing an end-to-end solution. Maintaining a high quality network will determine the winners and the losers as VoIP moves into the future.

The Cloud Computing Wild Card. It is difficult to tell how cloud telephony will affect the overall telephony mix or how fast the telephony cloud will become a factor. Thus far, cloud computing has been designed largely for data and data access. Until recently, telephony was not really considered for the cloud and, as a result, cloud networks must be redesigned to handle the telecommunication requirement. The existing service level agreements would not comply with telecommunication requirements either.

It seems that the telephony cloud will play a significant role in the future of telephony. Telephony in the cloud will be purchased by a blend of both the small business and large enterprise and will deliver hosted services in much the same manner as the traditional hosted solution for the small business. The telephony cloud will appeal to many large businesses. Cloud telephony will provide for redundancy, geographic diversity, seasonal demand, high quality and flexibility. Figure 1 shows that cloud computing will play a role in the overall delivery of telephony services across all user levels. The exact volume at each level is yet to be determined but 20 percent would not be out of the question.

Cloud telephony will be sold by both resellers and agents based on the same criteria that is currently used for hosted and premises sales. IT

Don Witt is President of cyLogistics (News - Alert) (

Hosted vs Premises Sales

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