VoIP making inroads among SMBs

A VP of IT Infrastructure Solutions discusses the growing usage of VoIP by SMBs.

With Sanjeev Aggarwal, vice president of IT Infrastructure Solutions for AMI-Partners. Aggarwal released research earlier this month that predicts healthy growth for SMB use of VoIP.

Question: SMBs are interested in VoIP. How is it permeating that market?

Aggarwal: There are lots of offerings in the market. A lot of people who work at SMBs use Skype and Vonage on home PCs. Some of them have OK experiences. But these services are not business class. They experience dropped calls and jitter on occasion. In small businesses, voice communications is mission critical and you need business-grade voice communications. In the business class you can have on-premise solutions, which are PBX-type solutions from Avaya, Cisco, Nortel and others. A lot of SMBs don't have IT staffs to install and manage these systems because VoIP was not a key part of the IT solution set until now. But using a single network for data and voice is a very attractive proposition for SMBs. There is a third option, which is a VAR [value-added reseller] installing and managing the system. Still another option is hosted VoIP. Hosted VoIP is similar to Vonage broadband VoIP and similar services, but it runs over private networks. They are very well managed with QoS control of the bandwidth and network monitoring. They are all private networks that are run by service providers such as Covad. A VAR can sell hosted, on-premise or managed offerings.

Question: Are vendors doing a good job of serving the SMB sector?

Aggarwal: The vendors need to do a better job of understanding SMBs' products and services needs. They need to do a needs assessment. A button business, for instance -- a small 20-person company -- doesn't need a system on premises. A system such as the one from a New York company named M5 works out great. They provide you with IP phones to connect to the Internet and with services and they monitor the bandwidth and all that. They provide a second line so they have reliable service. They bill on a per-person or per-month basis.

Question: Is this all simply too complex for small businesses without sophisticated IT departments to understand?

Aggarwal: I think that it is not inherently complicated. In the past, voice communications solutions were provided by service providers and there were no complications. Now traditional voice vendors such as Avaya and data networking companies such as Cisco are coming in and providing VoIP solutions. A lot more vendors are coming from all backgrounds and providing more solutions. Hosting companies are coming in. The small businesses are confused on what to do. The better educated they are and the better the understanding of users' need and service requirements is by vendors, the better the solutions will be for small businesses. A 20-person company needs a different solution than a 100-person company with four or five locations. A lot of [vendors and service providers] are taking solutions originally developed for enterprises down market. Some of that is a smoke and mirrors thing. The hosting vendors say they can do everything, but when customers really implement their systems they see barriers -- a certain number of users beyond which they cannot scale because there isn't enough bandwidth available. I think it is getting a little better. VARS from the voice side and VARs from the data side are understanding SMBs better and providing better solutions as they better understand and better educate end users. That is why the growth of the VoIP market in 2007 to 2010 is forecast to be pretty high for SMBs. The bottom line is that SMBs, VARs and vendors are slowly starting to get it.

This was last published in February 2007

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