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February 2007
Volume 10 / Number 2

The SMB Value Proposition for IP

By Richard “Zippy” Grigonis, Editorial Sponsorship Series

Today’s small and medium-sized businesses (SMBs) face considerable communications challenges; namely, how to move to a modern IP-based phone system smoothly and inexpensively, yet have access to the familiar, still-useful functions of more expensive legacy PBXs and key systems.

Perhaps the most impressive all-in-onebox SMB solutions for telephony, PC networking, and group productivity are the offerings of Allworx (, an East Rochester, New York-based company dedicated to the idea that SMBs should have inexpensive access to advanced communications functionality.

There are many reasons why both a reseller and an end user would choose to buy Allworx systems.

“We make IP appliance-based products for SMBs,” says Tom Grinde, Allworx’ VP of sales. “The first key element of our value proposition is that we have the lowest installed cost of any appliance-based IP system out there. Our boxes and proprietary phones have a price very competitive with plain old TDM [Time-Division Multiplex] key systems. At the entry level, our 6x model costs about $400 a station installed, which is a very low price for an IP system entry point. Plus, you’re getting all of the benefits of IP, such as remote phones and the ability to tie systems together and other innovative things that you never encounter in the purely TDM world.”

“A second key element of our proposition is that we have the most key system features of any IP telephony system out there,” says Grinde. “We started down the path, like everybody else, of building an IP PBX, creating pool line keys, using transfer to move calls around, call parking, and so forth. But, we kept in mind that, whereas IP telephony systems are replacing key systems, people are used to working with older interfaces; they’ve been doing things like ‘pressing line 1’ and ‘putting line 1 on hold’ for 20 years. They don’t want to re-learn how to transfer a call from station to another. They want to be able to put a call on hold and have somebody else push a button on another station and answer the call. That’s why we’ve engineered a true key system ‘feel’ to our IP product, with line appearances, DSS/BLF [Direct Station Selection/Busy Lamp Field] appearances on the phones, even remote phones. Indeed, even with VoIP trunks, we put individual line appearances on the phones, not just pool keys. Call Announce with hands-free answerback is another kind of key system functionality to remote phones that we can do. Also, when an Allworx phone is used as a remote phone it can have all the same features as a local phone — DSS, BLF, intercom, conferencing, call queuing, etc. They appear and behave the same as a local IP phone. Many IP phones don’t do that; people have to ring phones that aren’t local. But that’s a key system function we decided to duplicate. In fact, that’s probably one of the biggest features that sell our systems.”

“In short, our systems are very easy to use,” says Grinde. “You replace your existing key system with one and life goes on. It’s business as usual, except now you’ve got all of the advantages of VoIP, such as VoIP (define - news - alert) trunking, remote stations, multiple sites, and so forth. Even setting up an Allworx remote phone is easy. No additional hardware is required. The phone knows how to automatically manage through existing firewalls, ‘phones home’ to the main Allworx system, and automatically starts functioning.”

“Thirdly, we offer the easiest transition to VoIP,” says Grinde. “We have analog trunking gateways built into our product mix. Our entry-level 6x system has six analog line ports on it, and several analog station ports. It supports up to 30 users. You can start with an all-analog line key system, then add VoIP — thus, you can become comfortable with VoIP before eliminating the analog lines. Or, you can use both simultaneously for as long as you like. Some users rely on POTS lines for inbound calls, and VoIP trunks for outbound calls.”

“Our larger 10x system has nine analog trunks and supports up to 100 users,” says Grinde. “And now, our new 24x has a PRI/T-1 interface on the inbound, and it supports up to 100 users. [Note: 100 user extensions with voicemail and 100 system extensions without voicemail. The base 24x system comes configured with up to 24 users and 24 system extensions. Optional software upgrades are available for 25-48 users/extensions and 49-100 users/extensions.] With the 24x, we’re seeing people mixing PRI with VoIP trunks to achieve call cost advantages, particularly on long distance.”

“The forth element of our value proposition is that the system is very easy to install and implement,” says Grinde. “But, it’s not a self-install or a pure turnkey system. Instead, about 300 certified resellers nationwide sell the product and install it. We use them because we need to ensure that everyone has acceptable quality of service [QoS] on their lines and their networks are up to par. As far as installing the box itself, it’s very simple. We say to the resellers that if they can install a Linksys router, they can install this phone system.”

Grinde elaborates: “Most phone systems are still sold by traditional interconnect companies, who may not be up to snuff on IP technology, so we’ve really simplified things for them. The installation procedure resembles what the reseller is familiar with. Plus, we build troubleshooting tools and self-diagnostics into them to make installation easy. A data VAR will have absolutely no problem installing an Allworx system. The biggest sellers of our product still tend to be traditional interconnect companies because, at the end of the day, it’s a phone system.”

Allworx (news - alert) has two phone models. The 9112 has 12 buttons — 12 soft keys for line appearances, station appearances, features, etc. They’re all programmable. The 9102 has two call buttons; it’s typically used in a PBX “call 1, call 2” environment.

“Interestingly, about 90 percent of Allworx’ station set sales are of 9112s,” adds Grinde. “It proves that people want the key system functionality.”

“Allworx systems work with off-the-shelf SIP phones too,” says Grinde. “But, if you don’t use our Allworx phones, you’ll lose the key system functionality. That’s because we’ve extended the SIP stack to enable line appearances, Call Announce, and all the other key system-like features.”

“Obviously, you can put other phones on Allworx systems, such as conferencing phones,” says Grinde, “since we don’t make a ‘conference room’ phone. All of our phones are full duplex speakerphones and have very good sound quality, but when you’re in a conference environment, you need a Polycom phone. You can plug a SIP-based Polycom directly into our system, or you can take an analog Polycom and tie it to one of our analog station ports.”

Allworx inexpensive, easy-to-use systems will doubtless bring many SMBs into the modern world of IP Communications.

Richard Grigonis is Executive Editor of TMC’s IP Communications Group.

IP and SMB — Perfect for Each Other

By Tom Grinde, VP of Sales, Allworx

As a reseller, you have to be careful about how you apply your sales efforts. With all the choices available today, you have to pick wisely. Here’s why the SMB market and IP go together:

1. Smaller businesses readily adopt new technology. Small businesses look for a competitive edge. They need ways to do things better and cheaper. Many small businesses are entrepreneurs and are more likely to embrace a complete IP-based system. They’re tuned in to new technology, not 15 year-old TDM.

2. Build your customer base faster. Every reseller’s measure of success is how quickly they grow their customer base. Selling IP to the SMB market has shorter sales cycles and quicker installations, so at the end of the year, you can add three times as many customers selling to SMBs instead of slugging it out in the enterprise space.

3. It is not all about price. There is margin in SMB sales. The secret is not selling on price. IP offers all kinds of benefits, like remote phones and SIP trunks. They are standard on IP systems, not expensive add-ons. Further, because IP systems like Allworx serve as both a phone system and a data server, your average sale will be 50-75% higher. The result? Higher margins on the initial sale and future service revenues. Selling TDM quickly dissolves into a price-based sale. Selling IP is an investment in their future.

4. All small customers become large customers. Every large phone customer starts out as a small business. If you sell that customer the first system, you will sell him every additional phone and upgrade. It is a lot easier to sell them when they are small and grow with them instead of competing against an incumbent service company.

5. Become a specialist. The SMB market is large, so you can rapidly build your business with strong referrals focusing on key markets, such as medical, legal, or financial services. Customers are comfortable buying products that their peers purchase. When a doctor asks for a reference, a list of doctors will get you the deal better than a plumber.

6. IP makes you multi-dimensional. Many resellers sell only phone systems or only sell LAN/WAN services. Smart resellers recognize that selling both brings them more customers and more revenue and profits. How many times have you heard, “I don’t need a phone system, but can you help me upgrade my network”? Doing both opens many more doors.

7. Implementation of SIP generates additional revenue. Any business with a broadband connection can easily add low-cost SIP trunks without any additional hardware cost. SIP service providers offer many different agency programs that will provide a recurring revenue steam ever time you install an Allworx system.

8. Selling old technology makes you a dinosaur. Asking “how many lines and stations do you have and what do I have to do to be the lowest price?” ensures you will eventually put yourself out of business. Like so many other traditional interconnects that started in the era of post AT&T divesture that are no longer around, if you don’t quickly find ways to sell the benefits of IP, you will seal your own fate.



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