By Ed Gubbins, Senior Analyst, New Paradigm Resources Group
The past decade has seen a new breed of upstart hosted VoIP providers spring forth, offering to replace on-premise corporate PBX telephony platforms with services based in the cloud.
In the early years of their growth, hosted business VoIP and Unified Communications (UC) providers wisely targeted the low-hanging fruit of small businesses customers, for obvious reasons: Small businesses generally lack in-house IT expertise and are sensitive to the expense and effort of maintaining their own PBX systems, making them especially amenable to simple, money-saving, turnkey solutions.
Only a few years ago, conventional wisdom averred that businesses with more than, say, 100 employees would reject hosted solutions because organizations of that size typically have their own in-house IT staffs, and those IT personnel may view hosted solutions as a threat to their job security.
Many still do hold that view, but their numbers are shrinking rapidly. In the past year or two, larger businesses have increasingly adopted hosted VoIP in parallel with their rising embrace of cloud computing for various IT operations. For example, Smoothstone, a company that exclusively pursues customers with more than 200 seats, says the customers it acquired over the last year have averaged 750 seats and 18 locations and spent an average of nearly $25,000 per month on its services.
Medium-sized and large businesses aren’t driven as much by cost as they are by the functionality that hosted VoIP provides, some of which, as it turns out, is especially well-suited to their unique needs. Cloud-based solutions are particularly adept at tying together the kinds of distributed workforces that define larger companies. They allow employees at satellite offices, home offices and those with an array of disparate mobile devices to tap into the same uniform communications platform. And they are useful in efficiently and intelligently routing calls to those with the proper skills or expertise.
Hosted VoIP solutions can also be effectively tied in to the in-house software platforms of large businesses, such as in sales, IVR and customer relations management (CRM) applications. For example, incoming customer calls can be automatically accompanied by customer data so that customer-facing employees immediately know, before they even begin speaking, about the customer’s most recent interaction with the company and other details. They can also be tied to stored recordings of previous calls from the same customer – both audio and transcription. The potential for customization is high.
Hosted VoIP’s ascent to larger customers — which also tend to be more loyal and lucrative customers — is gaining the attention of larger telecom firms, some of which are launching their own hosted services, and some of which are acquiring smaller providers. The aforementioned Smoothstone, for example, has been acquired by West Corp. this year. STS Telecom was acquired by Earthlink. The embrace of hosted VoIP by larger players not only confirms the upmarket migration of these services but will surely further accelerate them as well. They’re not just for small businesses anymore.
New Paradigm Resources Group, Inc. (NPRG) is among the nation’s leading strategic consulting and research firms, serving innovators within the communications industry. We identify, analyze and forecast emerging trends and technologies, and provide our clients with market data, information and analysis on industry developments affecting their businesses. Our services support the mission-critical decisions made by service providers, technology developers and financial institutions by enabling them to understand and navigate evolving market conditions.
Ed Gubbins is a Senior Analyst at New Paradigm Resources Group.
