Vendors Haven't Quite Nailed SMB VoIP Market

Ann All

Voice over Internet Protocol (VoIP) has been pitched as "the next big thing" for SMBs for some time now, due to its ability to cut telecommunications costs and offer more flexible communications options than traditional telecom systems.


Yet VoIP hasn't exactly taken SMBs by storm. Interest in VoIP among SMBs surveyed by Savatar Research declined from 42 percent in 2005's third quarter to 27 percent in 2006's third quarter.


A key problem, says Savatar Research President John Macario, in a September 2006 interview with IT Business Edge, SMBs and VoIP: Ready, Set ... Wait, is that "there is no national brand, no recognized set of service providers actively and aggressively targeting the SMB market."


There is no SMB equivalent of Vonage in the consumer space or Avaya in the enterprise space, Macario says. And while SMBs are most interested in the cost-cutting possibilities of VoIP, vendors "still tend to sell on features rather than economics."


AMI-Partners analyst Sanjeev Aggarwal echoed Macario's sentiments in a February 2007 interview with IT Business Edge, VoIP Making Inroads Among SMBs, noting that "vendors need to do a better job of understanding SMBs' products and services needs."


That situation is likely to improve as a slew of vendors, including Cisco, Nortel, Microsoft and Alcatel-Lucent, bring packages of VoIP services geared toward SMBs to market.


But there is still plenty of room for improvement, if Microsoft's Response Point, a VoIP system for companies with up to 50 employees, is any indication. A Microsoft partner who viewed the product at a recent conference described himself as "thoroughly unimpressed," reports CRN.


According to the article, Response Point has such "glaring omissions" as a support for remote extensions and T1 trunking.


"There's no reason for a vendor with a semi-functional VoIP product to expect any level of acceptance in the market," summed up the anonymous "unimpressed" partner.


Despite the challenges, AMI-Partners is predicting a robust compound annual growth rate of 15.6 percent for the next three years in the SMB IP communications and managed services market, reports

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