Question: Before we get to a discussion of SMBs, let's
Dewing: There are several ways two people can communicate. They can do so in real time via voice, IM or video conferencing. Those same types of communications can be conducted in non-real time. People can send e-mail, leave voice mail. The difference between a typical system and a UC system is that if you call and the recipient isn't there, you get voice mail. You can then call the cell or see if he or she is online. You do it all manually. In unified communication, the system takes presence and availability data and chooses the right communication application for the task at hand. If it's high priority — if it's a fire in the warehouse — it's going to pick the place where the CEO is. If it's more mundane — for instance, news that a vendor shipment has arrived on time and will arrive at the loading dock as scheduled — it would go to the logistics manager's mailbox.
Question: Now, let's bring in the SMBs. Do SMBs understand precisely what it is?
Dewing: I think a lot of SMBs are looking at point technology solutions, things like unified messaging, IM with presence and VoIP, and calling them unified communications because they've got a VoIP connection. I think there is a lot of misunderstanding about what the promise is, but there is interest in using the technology to improve business results.
Question: What is the value proposition for them?
Dewing: SMBs gravitate toward improved customer satisfaction and reduced cycle times much more frequently than large businesses. Large companies are much more likely to look at ROI calculations. Small businesses understand what the impact on the business is. Companies such as a car dealership want to be able to reach service advisors whether they are checking on a job, getting coffee or are anywhere. The ability to reach them wherever they are using wireless VoIP is very attractive. That kind of customer satisfaction is very important.
Question: Is finding the right person quickly the only thing they are looking for?
Dewing: The other thing is that they gravitate toward really being able to reduce time to fulfill a process. For instance, buying from a supplier, being able to talk to a person and have the voice communication lead directly into a business process. They see the value right away. Another example is a small law firm; they like the idea of linking right to billing and keeping e-mail and voice mail in a single infrastructure on the network. They immediately see the impact on business. That's the sales proposition to SMBs.
Question: How does the industry sell to this huge but dispersed group?
Dewing: Reaching them is a lot more difficult. Few go to trade shows, few have IT people. The way to reach them is through the reseller channel. They usually have a trusted advisor in their geographical region or some other realm. This is critical. … Left to their own devices, most SMBs don't see the whole picture. That's where the channel becomes important. Research we did says that two-thirds of the time, SMBs turn to peers for advice. If that peer happens to be in the channel, that's where they go. That's why it's important [for vendors] to have a broadband channel. It may be a guy from their high school class who happens to be in IT today, it could be the coach of their kid's little league team or it could be from a more formalized source such as the yellow pages. That's the nature of SMBs. Companies with less than 500 employees, in which the head guy is the guy who started the business and still runs it, those guys operate a lot differently than large businesses.
Question: So that's where they get advice and possibly buy. Where do they get the basic information?
Dewing: They will go to a VAR or to Avaya or Cisco or Microsoft (or other vendors). A lot of vendors are putting up Web sites that have a section dedicated to SMBs that says, "Here's what's different about your situation, here's what is different about our solution and here's where they come together."
Question: So there is a lot of information coming from the vendor and a lot of advice from the channel. Who gets the sale?
Dewing: The evidence says that they do look at vendor Web sites, but at end of the day they go to the local VAR, whom they trust, to make decisions. They get info from the vendor, but actually sit down with the local VAR. I see that as fairly constant going forward.
Question: Are vendors doing anything besides the Web sites to embrace SMBs?
Dewing: Microsoft and Nortel are putting up 100 demos around North America. Avaya and Cisco both have vans going around. They go out to an SMB site, a VAR site, and park at a hotel and have a regional gathering. They are reaching out to deliver information in a personal way and go out on their turf.
Question: What about the phone companies?
Dewing: The phone companies have organizational divisions looking at SMBs. They look at UC as one of the many termination points of their transport. They definitely are focusing on it.
Question: It sounds like there are a lot of companies trying to sell to SMBs. There are telcos, vendors, VARs, integrators and others. Who really is selling?
Dewing: When SMBs say they go to voice vendors, the question is: What does that really mean? Is it who they bought the IP PBX from or the telco or the manufacturer? It is very unclear what they meant in this survey. Do they go back to the VAR who sold them their system? Some of these are interconnects, which are agents for the phone companies. They resell telco services, act as distributors for their equipment and do installations and integration. That's where their margin and livelihood are. It's the old hackneyed phrase: The margin is where the mystery is.
Question: What does the future hold?
Dewing: In the long-term view, three to five years, the standards will settle out and it will be much easier to communicate between systems. Today you can go to a single vendor. You can go to Microsoft to get everything, you can go to Cisco for the same thing. Everyone is trying to guarantee that they can work together. When will that happen? We'll see … When it does, then the people will come. That's where pricing becomes a critical component of all this. Those types of pricing changes will impact demand and standards changes will have an impact on the ability to deliver services. The adoption curve then will happen naturally.
This Executive Briefing originally appeared in a weekly report from IT Business Edge.
This was first published in June 2007