Hosted VoIP Gets a Makeover

UC Changes the Face of SMB Communications

Never as glamorous as their larger enterprise cousins, home-based businesses and SMBs traditionally have focused on working more efficiently while controlling costs. Now, that dowdy “do more with less“ modus operandi is changing, as SOHOs and SMBs get the opportunity to leverage the more glitzy aspects of IP communications via hosted VoIP.

The Telanetix telepresence plasma screens give the illusion of being in the same room.

To that end, several providers are adding enhanced functionalities to basic hosted VoIP. In August, Verizon Business introduced the Integrated Communications Package, a unified communications service for customers of the company’s hosted IP Centrex service. The expanded functionality allows employees to access voice mail, control incoming and outgoing calls, use pop-up notifications so users can forward calls without first answering them, manage their online presence with Lotus Sametime IM, send text messages, and synchronize contacts and calendars. It also includes end-user and administrator-level “point-and-click” interfaces, and there’s a plug-in with Outlook for click-to-dial. On the road map is the ability for users to take their IP phones with them, as well as interfaces to other IP services, like conferencing and contact center packages.

“Companies have a need for collaborative tools and unified messaging, because gone are the days where you end at 5 p.m., have a 30-minute commute home, and you’re done,” says Jeff Cayer, group manager of VoIP marketing at Verizon Business. “Now, everyone is inundated with communications, all the time.”

While the core target for the service is still the large installed base of universities and the like, Cayer says the new package lets Verizon target the SMB space in a new way as well. “We are seeing a significant amount of growth in small businesses,” he explains. “With [the] advanced package, you get IM capability. A lot of people will use AOL, but security is a problem, and it doesn’t make sense to install their own internal system, from a capex perspective. Right now we’re leveraging Sametime and can give that to them on a hosted basis.”

Verizon offers a moving company it’s working with as an example of a small business benefiting from hosted VoIP. “You may have two or three people working at each franchise, but they’re serving large enterprises, so they need to appear larger than what they are,” says Cayer. “So having tools to decide who reaches them how and when is critical.”

Verizon isn’t alone in spearheading the hosted VoIP-with-UC trend. Telanetix Inc. has developed a software codec to deliver high-definition, life-size video conferencing over the same T1 line used for VoIP or data, and so the company recently purchased AccessLine Communications, a hosted VoIP company, to help it penetrate the SMB market with a bundled play.

“If a small business is paying $4,500 for a hodgepodge of voice services for phones in two locations, we can do it for $1,800, plus throw in telepresence for $2,000 per month,” says Tom Szabo, chairman and CEO at Telanetix. “For a thousand dollars less, they get so much more functionality.”

Telepresence-style video conferencing is a market dominated by Cisco Systems Inc., Hewlett-Packard Co., Polycom Inc. and TANDBERG, which go after large enterprise C-level executives with expensive, premises-based solutions. But Telanetix, given the monthly lease option for its services, says SMBs are its niche. “The Cisco pitch is having companies consider paying $500,000 per site versus having the chairman fly around in a Gulfstream IV to meetings,” says Szabo.

Going forward, AccessLine will do the heavy lifting of converting SMBs from PBXs to IP environments with its hosted VoIP service, paving the way to add telepresence. “When you have a customer with our service, there’s a pipe there that can be used to deliver all kinds of products,” says Doug Johnson, president of Telanetix’s AccessLine division. “It’s a disruptive idea for SMBs to have a high-utility, low-cost video solution. But once you have that pipe, customers’ willingness to think about additional services becomes very natural, especially if you’re eliminating the capex requirements for the customer. And it enriches the hosted VoIP proposition.”

The idea of layering in higher functionality is also the strategy of M5 Networks Inc. “A group of us are moving on to what we think will be the next phase of the industry — voice as a service, or VaaS,” says Dan Huffman, president and CEO at M5. There are, he says, three differences between hosted VoIP and VaaS: 1) Active service management that monitors and fixes issues proactively, as opposed to waiting for customers to call with problems; 2) Embedded continuity that requires planning in advance for disaster recovery; and 3) On-demand services that move past simple network-based delivery of VoIP into “business-changing” packages. “We’re talking about something that can change the business, not just a cool bell and whistle,” notes Huffman. “We take over the complexity and boil it down into something that really hits the bottom line. Five to 10 years from now, mid-sized businesses will not buy phone systems. Communicating with clients is more important than saving money, so enabling that to be better via a hosted, bundled offer will bolster the trend toward purchasing software over the [Internet] as a service.” To fulfill this vision, M5 is adding a series of applications, such as contact center functionality, to its hosted VoIP offer.

While unified communications will become a necessary element in selling into many segments of the small business market, it’s important to understand that UC for smaller businesses is a different animal than for larger enterprises, says David Cork, co-founder and CEO of Natural Convergence.

“For instance, today the majority of small business calls are external, while the majority of larger businesses’ calls are internal,” says Cork. “As a result, unified communications that provide small business efficiencies in communicating with external parties will be successful.” Natural Convergence Inc. soon will announce an enhancement to silhouette — its hosted VoIP solution — that will allow small businesses’ off-site teleworkers make and receive calls as if at their office desks.

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