SHIFTING TO VOIP
THE SMB MARKET FOR VOIP is continuing to grow and evolve. My company, Savatar, has just completed its fifth research study of the SMB VoIP market. In this study and in each of our past studies, we surveyed more than 500 SMB owners and decision makers regarding their thoughts about VoIP, issues they might be having with their current phone systems, and what might trigger their decisions to purchase new converged voice and data solutions.
In each study, we asked the respondents what kind of phone system they currently have in place. In the third quarter 2005 study, only a small percentage of the respondents said they had purchased a VoIP system. In the latest study, that number jumped to 13 percent. Most of the companies that made the leap to VoIP were larger, multisite businesses with hundreds of employees. And, by a two-to-one margin, most of them purchased premisebased solutions over hosted solutions (see story on Page 24).
Perhaps the most interesting response came to the question: from whom they purchased their systems. Sixty-eight percent of the respondents said they bought their new system from a VAR or systems integrator. As you can see from the table on Page 23, hosted PBX service providers are getting the message that engaging channel partners is key to tapping the SMB market.
The table shows some details about the products and channel programs of 13 service providers that represent a cross-section of companies trying to make a mark in the SMB VoIP market. They range from industry giants to emerging companies to wholesalers.
There are two big questions facing channel partners trying to participate in the SMB VoIP market. First, what does it take to succeed in selling, marketing and servicing SMB VoIP customers? Second, which service provider can best help a channel partner succeed?
The answer to the first question is pretty straightforward and is grounded in quantifiable data. Each of Savatars five research studies into the SMB VoIP market asked SMB owners and decision makers the same question: How important is each of the following factors in deciding to change to a new phone system?
Five times in a row, the answer came back the same. SMBs will consider changing to a VoIP system if it proves to be of economic benefit to their businesses. In the most recent study, 61 percent of respondents said economic factors were critical in their decision-making process. Secondarily, 49 percent cited system management as critical. Only 42 percent thought features were critical, and 40 percent named contract issues as critical.
The message is clear: If you want to succeed in selling VoIP to SMBs, start by making a compelling economic argument about lower TCO. Second, tell the SMB owner how the new VoIP system will make life easier; then explain a few of the many VoIP features that have relevance to his or her business.
When it comes to choosing a service provider to work with, many factors come into play.
Is its platform stable and performing well in market? In our latest research, 91 percent of the companies who had deployed VoIP said they would recommend or highly recommend hosted PBX to their peers.
Has the service provider made a commitment to using the channel to reach the market? In most cases, the answer is yes. The best way for a channel partner to know that a service provider is serious is to ask it to show you a business case that clearly lays out the revenue, costs and profit youll generate by meeting its program quotas.
Finally, partners will need to decide which company is best suited to serve the market over the long term. Right now, the momentum favors emerging companies. They are the ones most aggressively attacking the market while larger companies most notably the RBOCs are sitting on the sidelines. It appears they will stay on the sidelines until they perceive a threat from some competitor with the ability to scale their customer bases into the mainstream SMB market.
Will it be cable companies who provide that threat? Right now, even though cable companies are selling low-cost, highquality bandwidth to the SMB market, none of the large players are offering a VoIP product to SMBs. Will they see the need for channel partners? Time will tell. But we do notice more cable companies showing up at conferences that were once the sole domain of large, traditional telecommunications companies.
John Macario is president and one of the founders of Savatar, a management consulting firm that develops and deploys relationship marketing strategies.
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