Microsoft's Small Biz VoIP Play Hits the Street

Microsoft this week began its march into the small business VoIP market in earnest with the general release of its Response Point platform.

The new VoIP system, built on software from Microsoft and hardware from OEM partners D-Link Systems and Quanta Computer, is aimed at businesses with up to 50 users. Aastra Technologies, another recently-signed OEM partner, is expected to release systems in 2008.

It follows closely on the heels of the long-awaited launch of Microsoft's enterprise VoIP portfolio, including its Office Communications Server 2007 and Office Communicator 2007, last month at an event hosted by Chairman Bill Gates.

With its entrance into the space, Microsoft will face off against Cisco Systems, which is also stepping up its efforts in small business VoIP. San Jose, Calif.-based Cisco last week rolled out a new version of its Unified Communications 500 Series IP telephony platform that scales up to 48 users.

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Microsoft is touting its new Response Point product line for its ease-of-use, voice-activated user interface and strong channel play.

"VARs and channel partners will have a lot of opportunities," said Xuedong Huang, general manager of Response Point for Microsoft, Redmond, Wash.

Huang said the new phone system will enable a whole new set of partners to get into the VoIP game.

"Traditionally they face a challenge to branch out into telephony. Telephony has a [reputation] for being very hard to learn. It takes a long time to be certified because it's complex and requires specialized expertise," Huang said. "Response Point is going to change that."

To date, Microsoft has trained approximately 1,000 solution providers nationwide on the new technology. Most are networking VARs that have not yet gotten into the VoIP space he said.

Response Point phone systems will serve as a lead-in for other Microsoft small business products such as its Dynamics CRM package, said Tom Strickland, network service manager at Congruent Software, a Microsoft Gold partner in Bellevue, Wash., that has received the training.

Strickland said customers have already shown interest in the product line.

"We did a Response Point demo at an event we hold for customers, and the response to the system was fantastic," Strickland said.

Aaron Booker, president of Hardlines, a solution provider in Bellingham, Wash., said his initial skepticism about the system and its capabilities was overcome after participating in Response Point training.

"It's a 1.0 product and voice is critical. You can't be rebooting your phone. It can't be a traditional Microsoft 'wait for Service Pack 2'," Booker said of his doubts. "But I think they get it with Response Point [because of] their attention to detail."

NEXT: The missing T1 link

To keep costs and complexity down, Microsoft has focused on a small number of core capabilities, leaving out functionality such as automatic call distribution, contact center queuing features and native SIP trunking, he said.

Of more significance, according to solution providers, is the lack of T1 support.

Congruent Software's Strickland said the lack of T1 support was "the only downside" to the system, noting that it limits sales to only the smallest of customers.

"As soon as you hit 8 to 12 phone lines, you're looking for a T1 to bring the cost down," Strickland said. "For most customers of 10 lines or less, it's easy, no problem. But as soon as you hit a customer that already has a T1 or some kind of T1 integration, then Response Point doesn't play well."

Congruent Software currently is targeting the system at those smaller customers, but the addition of T1 support would enable the solution provider to chase a broader range of sales opportunities, he said.

Huang said the decision to support T1 in the phone system actually lies with Microsoft's OEM partners and that they can add it if they choose.

"T1 support is really not our responsibility. We ship software to the OEM partners, so the OEMs can decide. The OEMs decided not to because T1 is a small niche," Huang said. "There's a transition from T1 to SIP trunking. We will be supporting SIP trunking. The T1 support will be the hardware gateway's responsibility. The software actually can support that without any problems," he said.

Hardlines' Booker said the lack of T1 support could be a problem, depending on the size of the business.

"Many customers don't have T1s, but there are more than Microsoft thinks there are," Booker said, noting that he expects to see it added in future versions.

The release of Response Point marks the culmination of a two-and-a-half year effort to build the product in-house, with a group that acted like a start-up company within Microsoft and began with a three-person team, Huang said.

"Initially we had only two people, me plus two developers. Now we have a large team and a business plan," noting that his team has grown to 40 people.

Microsoft last month disclosed pricing for the new system. Quanta's Syspine package includes four phones and a base unit with a built-in analog telephone adapter (ATA) and secure gateway for approximately $2,500. Additional phones are priced at $159 each. D-Link's VoiceCenter system includes a base unit, an ATA and five phones for approximately $2,500. Additional phones cost approximately $139.

Both vendors are offering a 20-phone system for less than $5,500.