Why VoIP For SMBs Is Hot

It might be that their CEOs have heard the buzz about Skype and Vonage. Or it may be because it's time to upgrade the 6-year-old PBX systems they bought in the wake of Y2K. Whatever the reasons, businesses of all sizes have become extremely interested in Voice-over-IP.

"Within the past 18 months, we've been getting lots of inquiries," says Philip Stone, president of Boardwalk Communications, a solution provider in Victoria, British Columbia. "Before that, we'd get an interested call a month, and now we get a very interested call a week."

"We're seeing it big-time," says David Blau, chief security officer and founding partner of Consolidated Technologies, a Port Chester, N.Y.-based VAR. "We're selling twice as many implementations on a weekly basis than we were a year ago."

Stone and Blau are not alone in their assessments. According to the latest VARBusiness State of the Technology survey on networking, service providers are supporting VoIP at a furious pace. While IP telephony is offered by fewer than half of the current networking VARs, it tops the list of additions small VARs will make to their offerings next year. More than 28 percent of the small VARs say they'll put VoIP on the menu next year. IP Telephony is also on the wish lists of 18 percent of midsize and 17 percent of large VARs, the survey found.

But, clearly, the most excitement around the technology is among solution providers making their first foray into networking. More than 70 percent of VARs will debut in networking with VoIP as compared to 43 percent with wireless, 29 percent for network infrastructure and 21 percent in network management, according to the State of the Technology report.

The numbers reflect the hot market for VoIP across most businesses. Even so, VARs can't rest on the laurels of VoIP hype if they want to win interested customers. As is the case with many new technologies, SMB customers need to understand the benefits of the service before they buy it.

"On the enterprise side, they understand what Voice over IP is, and on the consumer side, they don't want to know what it is--they just know that it's cheap," Stone says. "But with this group in the middle, they want to know what it is and what it does."

"Within these small and medium businesses, Voice over IP is something that's catching on, but in terms of what it means, it's still not absolutely clear to them," says Joe Scotto, director of product solutions and marketing for the small and medium business group at Avaya in Basking Ridge, N.J. "They know that it's a technology that does something good, but they're not clear on what it does for their business."

If there's one thing potential customers know about VoIP, it's that the technology can provide cut-rate long-distance phone calls. And now the voice quality of VoIP calls rivals that of landline calls.

"In the past, the detriment was that you had this great feature, but the quality was degraded," says Rich Tear, vice president of managed services for Iomega in San Diego. "That has changed."

For small and midsize businesses that need to watch every dollar, however, a cheap phone call is not enough of a selling point anymore.

"Initially, the whole idea was that you'd save on long distance, but long distance is so cheap now that there's really no cost savings there," Stone says. "So you have to look beyond that."

"Your average small-business users, when they hear 'VoIP,' they hear 'cheap long distance,' but that's really one of the least compelling parts of the story," Blau says. "What we can offer is a suite of applications that enables our customers to do more with less, to engage part-time staff to work remotely, to allow the road-warrior sales team a single number with follow-me features."

"Anybody today who is looking at a phone system is almost crazy not to go with Voice over IP," says Brian Sims, vice president of Advanced Technical Solutions in Scott Depot, W.V.

When it comes to pitching VoIP services, it's best to know the top three reasons the technology makes sense, especially for SMBs.

NEXT: Reason #1