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April 2008 | Volume 11/ Number 4
Thinking IT Through

2008 — The Year for SMB VoIP

The SMB market huge: the US Census (Source: 2005 County Business Patterns) tells us that almost exactly half of all employees work for firms that fit this SMB model. So why isn’t there more SMB VoIP?

My contention is that there have been three major and one tertiary reason why SMB VoIP hasn’t taken off until now. And that these impasses are, in 2008, finally largely removed and that SMBs — likely to continue to be the economy’s engine, even in a downturn — will be turning to VoIP solutions in greater numbers beginning in 2008.

The first impasse has been the awareness of and confidence in VoIP solutions. The growth of and awareness of consumer VoIP, and its associated dollar savings, as well the public successes of larger Enterprise VoIP deployments has reduced the natural avoidance of “New Technology (News - Alert)” by most SMBs. VoIP has certainly “Crossed the Chasm” to the mainstream and technology-averse SMBs are becoming more comfortable in deploying this technology.

The second impasse has been the significantly higher price points of VoIP systems versus older technology (TDM) systems. Previously, VoIP solutions for SMB had prices two or more times the expectation of from $300 to $500 maximum, per user, that the old technology cost. Now, following Moore’s Law, overall VoIP market growth and the introduction of offers to fit the needs of SMBs, the price points have come down significantly to be much more in-line with SMBs’ willingness-to-pay.

Thirdly, and perhaps the most important of the impasses: until now, there wasn’t a convenient, local place for SMBs to acquire a VoIP system. Now, distribution channels wanting to sell VoIP solutions to SMBs have come on-line — traditional telephony resellers, data VARs, telephony providers and other channels that serve this market, have all added SMB VoIP products to their portfolios as they see that SMBs are now more willing to purchase VoIP solutions.

The tertiary reason: affordable broadband network connectivity is now finally available in most areas (with the exception of the problematical rural market). And bandwidth pricing is much more reasonable than previously — and may even be available from multiple providers in many locations, at competitive rates.

Reaching SMBs with a comfortable-to-adopt, more affordable and locally sold and supported solution is the only way to be successful in the SMB space. With these impasses virtually removed, 2008 will be the Year of SMB VoIP. Also, one might speculate that the growing UC focus on business process improvement may also stimulate SMB adoption of VoIP — but that is the subject of future commentary. 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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