why your business is not too small for voip

White Paper
Why Your Business is Not
Too Small for VoIP


Executive Summary
If you’re a small business, you may think that larger businesses have all the advantages. That
may be true for things like purchasing power and efficiencies that come with scale, but not
every advantage is written in stone. Whether out of necessity or choice, most small businesses
compete with enterprises, and need to take any edge they can get. One advantage is agility, as
smaller businesses can react faster to change. That’s becoming critical as the pace of change
keeps accelerating, especially when it comes to communications technologies.
Enterprises have been using VoIP for some time, and many smaller businesses hold the idea
that somehow this is yet another advantage not available to them. Nothing could be further
from the truth, and this guide serves two purposes to that end. First is simply a reality check to
clarify a number of misconceptions that our research indicates are holding back VoIP adoption
among small businesses.
Building on that is our second purpose, which is to empower small businesses with this
knowledge. VoIP is far more accessible than many businesses realize, and in fact you’re now
in the driver’s seat when it comes to being a customer. No longer must you let telcos and
vendors dictate the terms of doing business. By being an informed customer, you can now
make decisions that can have a big impact on your business and put you on par with larger
competitors when it comes to communications capabilities.
To that end, this guide explores five reasons why small businesses should think differently
about VoIP. There may still be situations where VoIP isn’t for you, but in today’s environment
VoIP can do more than just provide lower cost telephony. By thinking this way, you’ll see that
you’re never too small for VoIP, and there are great choices available today to start you on this
path and turn your phone system into a new driver for competitive advantage.
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About Ziff Davis B2B

Ziff Davis B2B is a leading provider of research to technology buyers and high-quality
leads to IT vendors. As part of the Ziff Davis family, Ziff Davis B2B has access to over
50 million in-market technology buyers every month and supports the company’s core
mission of enabling technology buyers to make more informed business decisions.
Contact Ziff Davis B2B
100 California Street, Suite 650
San Francisco, CA 94111
Tel: 415.318.7200 | Fax: 415.318.7219
Email:
www.ziffdavis.com
Copyright © 2014 Ziff Davis B2B. All rights reserved.
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Five Reasons Why You’re Not Too Small for VoIP
Reason #1 - VoIP is a service, just like TDM
The first thing you have to consider with VoIP is that there are two distinct elements –
the phones and the service. You may be using a VoIP service in your home, and if so
you’re probably just using one line. When it comes to the service component, VoIP is
really no different for your business.
In fact, whether you need 1 line, 10 lines or 1,000 lines, there are plenty of VoIP
providers to choose from. Some cater strictly to SMBs, and even SOHOs, and these
providers will have a solid understanding of your needs from end-to-end. Conversely,
your current voice provider is probably an incumbent telco, and this may well be the
reason you might think you’re too small for VoIP.
Before VoIP and competition, small businesses were not well served by telcos, mainly
because they had to take what was given. Telephony was largely the domain of the
incumbents, and it’s fair to say that small businesses overpaid for a long time and

were also underserved. VoIP has diminished the premium value of telephony, and with
that the carriers have lost a lot of leverage over subscribers.
Now that SMBs have choice and telephony is not that special any more, there is no
reason to feel beholden to your telco. No business is too small to use VoIP, and no
matter how many lines you need, there are many competitive carriers happy to help.
With that said, there is an important difference between getting VoIP at home and in
your business. At home, you can run VoIP just fine from your router, even for a few
lines. Things are more complicated in a business environment, especially if VoIP is
fully displacing legacy service. In that case, you’ll enjoy the efficiencies that come
from shifting voice off its own network to your data network. However, this puts more
pressure on your LAN, and if it’s not yet set to properly support VoIP, you may need to
invest in some network upgrades.
Long-term, you should be planning for this to happen, so sooner or later you’ll need
to get your network up to par. This may seem like a big cost now, but as you come to
understand that VoIP is more than just telephony, the full range of benefits will make
the business case easier to justify. Don’t forget, you’ll also be gaining savings from
network convergence and going from two networks to one.
Network convergence is a topic unto itself, but the main point here is that making
network upgrades is within your control, and the benefits go beyond VoIP. In basic
terms, VoIP is a service, and this should not present a barrier to adoption. When the
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service runs over your network, you do have more obligations, but whatever upgrades
are needed, they are manageable and should not be that costly.
Reason #2 - you don’t need switched telephony
This is a bit of a misconception caused by associating business-use VoIP with
expensive legacy PBX systems. After all, it’s clear why a business in that situation
would seek a lower cost option. This is especially true is their PBX is fairly current,

which means they’ll be locked into using that system for years to come. The next best
thing is to reduce the cost of their phone service, and that’s where VoIP comes into
the picture.
The cost savings may not be spectacular, at least compared to switching out to an IP
PBX, but they’ll be enough to be worthwhile. Of course, switching both phone systems
and services at the same time is even better, but that’s a much more ambitious
proposition. In either case, having a switched phone system is the driving force.
As such, you need to separate the two elements explained earlier. Size of business is
not a factor for buying the service itself, but it very much relates to the phone system.
Generally, the economics for a switched system make sense for businesses with over
100 employees, and historically, that typically means a PBX. Today, that means an IP
PBX, and while more affordable than a legacy system, it is still beyond the reach –
and often will be overkill – of smaller businesses.
The next step down is a KTS – Key Telephone System – and while these have been
in use for decades, they are a poor choice in today’s market. They are much less
expensive than a PBX, but of course you get fewer features and very little latitude for
upgrades. These are still widely used, however – particularly in retail – and while they
provide a basic level of switched functionality, they will go the way of legacy PBXs in
due time.
Regardless of that prognosis, KTS’s are still popular, and represent another example
of how businesses rely on switched phone systems once they get to a certain size.
Much smaller businesses can manage without this, but there are many others on
the bubble where they could benefit from a switched system, but find them cost
prohibitive.
Whatever form of switched telephony you think of, this should not be viewed as an
obstacle to VoIP. The more you understand the native feature set of VoIP, the more
you’ll see that many aspects of a legacy switched system are resident within the VoIP
service.
A key characteristic of VoIP is that the service runs over a data network, and the
underlying protocols – particularly SIP – extend intelligence across the network, right

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out to the endpoints. This is fundamentally different from the command-and-control
model of the PSTN, where the service provider retains control at their end. While this
closed system ensured quality and reliability, any change requested by the end user
involved time and money.
With VoIP, the service is based on an open system, allowing end users to
self-provision features. Network administrators do sit in the middle and control which
features employees have access to, but the main idea is that a lot of the functionality
locked into legacy phone systems, now resides freely at the end user level.
For small businesses, this translates into added capabilities with VoIP without the
need for a switched system. They won’t get all the extra features, but enough to be
worthwhile. In other words, you can keep your current setup of standalone phones,
get advanced features that approximate a switched system, and a lower phone bill. If
you think you’ll be better off investing in an IP PBX, that’s your decision, but in many
cases it simply won’t be necessary.
Reason #3 - VoIP does not require a full service IT department
This may be the best reason to use hosted VoIP, but this is also another
misconception holding back adoption. With legacy telephony, enterprises have long
had a highly trained team of IT staff to maintain this service. In this world, voice
was separate from data, which meant that the core IT staff had little understanding
of telephony. For this reason, early implementations were problematic, as they did
not recognize how the real-time nature of VoIP required special attention. This has
since largely been solved, but it has created the widespread impression that VoIP is
complex.
To some extent that is true, especially if you view VoIP from a legacy mindset. As a
technology, VoIP is not well understood by this audience, but that’s becoming less
important now. IP networks are maturing quickly, and as more voice traffic is ported

over from TDM, the learning curve shortens and VoIP becomes more familiar to IT.
VoIP vendors have a lot to do with this, along with the standards bodies that help
make the technology more interoperable across multi-vendor deployments.
This is good news for smaller businesses, as VoIP can be implemented with little or
even no IT support. In very small businesses where standalone phones are the norm,
there may not be anybody with telephony expertise, including whatever semblance
of IT you have to manage the LAN. Often, telephony will be an add-on task for an
employee with a hodge-podge of responsibilities, and when that person leaves, it
simply gets passed on to someone else.
The realities of small businesses like this are far removed from the enterprise world,
although your larger brethren may not be any more efficient. They have different
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challenges to manage, but that’s not our focus here. As noted earlier, there are many
varieties of VoIP providers to choose from, and in terms of this perceived obstacle,
even these types of businesses can move to VoIP.
A few years ago this wouldn’t be the case, and the key change is the cloud. VoIP
has been offered as a hosted service for many years, but never available in a form to
serve this end of the business market. The cloud has become a dominant trend in IT
circles, and communications services have recently fallen into that fold. Most forms
of hosted VoIP are tied to switched phone systems, and this is an attractive option for
SMBs that have limited IT resources, as it allows them to painlessly make a move they
couldn’t really do on their own.
This still doesn’t help smaller businesses, but other flavors of cloud-based VoIP do.
The more recent development is the ability of some operators to provide VoIP service
almost entirely from the cloud. In other words, the service can be ordered over the
Web, and from there provisioned to the point where each employee has control over
their own VoIP line.

The only hardware requirement is an inexpensive adapter to VoIP-enable legacy
handsets, or should you choose to go-IP, to replace them with IP phones; which today
are quite affordable. Add to that a media gateway at the edge of your network, and
possibly an eSBC – session border controller - and
you’re all set. Otherwise, you can go with offerings where all the network-related
issues are managed by the provider, leaving you with just one task – paying the
monthly bill.
Reason #4 - no long-term commitment needed
At this point, you should be thinking that any and every business should be using
VoIP, and we certainly won’t argue. We constantly research the market, and are
keenly attuned to the needs of all types of businesses. The differences can be quite
stark, not just in terms of awareness of VoIP, but also perceptions about what the
technology can and cannot do. This is important to note since VoIP is still evolving,
and in fact is becoming increasingly friendly to even the smallest of businesses.
One way providers do this is to structure offers than minimize your risk as well as
theirs. You can never fully eliminate risk, but considering that you probably have
limited IT resources and cash flow constraints, the decision to adopt VoIP won’t be
made lightly. After all, it’s new for you, and if you have never had a problem with TDM,
you’ve got to feel pretty comfortable making a switch. Add to that the state of your
phone system, and this can be a high-risk move. If your phone system is fairly new,
you’ve got a lot invested in that, and since TDM almost never has problems, why
would you move to VoIP just to save a few dollars?
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This is an important consideration since cost savings is usually the key driver for
VoIP, especially among SMBs. In the early days of VoIP, incumbents could get away
charging a premium for landline service since there weren’t any alternatives. VoIP’s
pricing back then was attractive, but the quality was poor, and that kept a lot of people

away. Don’t be misled, however, as the quality issues had more to do with the state of
connectivity than VoIP itself. Today, high speed broadband is everywhere, and that’s a
big reason why those quality issues have largely gone away.
Along with other things, that development has made VoIP much more acceptable
for homes and businesses, and is very much on course to eventually replace legacy
service. As a result, incumbent carriers that still want to protect their legacy customer
base have lowered their pricing to be closer to VoIP. When the cost savings becomes
minimal instead of significant, legacy customers bear more risk in the overall equation,
since they must still accept some quality compromises.
This is a key reason why you need to do your homework in terms of price shopping
when considering VoIP suppliers. Not only that, but you can use that to create some
leverage with your incumbent telco. If they really want to keep your business, they
may be willing to negotiate better pricing. This could be a good option if you’re still not
sold on VoIP, but that’s not the purpose of this guide.
In terms of reducing risk to go with VoIP, there is another financial consideration other
than price. From the beginning, VoIP providers did not tie subscribers into lengthy
contracts – the service was always taken on a month-by-month basis. For consumers,
this was no different than legacy service, but that was always a mirage since you had
no alternatives until VoIP came along.
Businesses, however, are typically bound by contracts with their carriers, especially for
trunking to service all of your phone lines. This is a highly effective tactic for locking
in customers, not just for a long time, but also to keep paying high prices that are no
longer competitive in today’s market.
If this sounds familiar, then you may think that all telephony services are contract-
based, providing yet another reason to not consider VoIP. Clearly, the opposite is true,
and this type of flexibility is another way to make the risk more equitable between
both parties. If VoIP service doesn’t perform as advertised, you can switch out any
time, and even go back to legacy without missing a beat. This holds whether you’re
a multinational enterprise or a 5 person micro business, so whatever your size of
operation, you always have an out with VoIP.

Reason #5 - there are many operators who want your business
This may be the best reason of all, especially if you’ve felt like an afterthought with
your incumbent. Some businesses grow over time and as their value increases to a
telco, the better the service on all levels. Carriers will be more inclined to extend price
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breaks, special discounts, offer exclusive services, provide premium level technical
support, etc. This is a win-win scenario, but does not describe the audience our guide
has been written for.
Many businesses – especially micro level – will always be small scale, and growth is
simply not in the plans. Not to mention businesses that would like to grow, but are still
hurting from the last recession, and are just hanging on. In either case, thinking big or
high growth is really not the driver of everyday operations, but still, these businesses
have telephony needs too.
Clearly, they will have little appeal to incumbents, so they can afford to give you
take-it-or-leave-it pricing, especially if your phone system has lots of life left. If there is
no short-term hardware selling opportunity, they’ll just offer the status quo, and if you
go elsewhere, so be it.
If that describes your situation, you really should look at this as an invitation to shop
around and leave on your terms – not theirs. As noted earlier, in today’s VoIP world,
there are solutions for all sizes and types of businesses. On a services level, you can
choose from services that range from simple telephony to integrated offerings that
are variations on Unified Communications. In terms of phone systems, you can go
with premise-based or cloud-based deployment models, or even hybrid plans that give
you a bit of both. These will largely determine what phones work best, and aside from
keeping what you have, you can easily move to an IP PBX or standalone IP phones.
For a change, you are in the driver’s seat, and there are plenty of businesses just
like yours; that’s why there are so many offerings available. Another factor is that

geography no longer determines who you buy from. Before VoIP, you had to go with
the telco who had a local physical network footprint. Today, you can choose from
providers on the other side of the country. As long as you have broadband – and
preferably take on SIP trunking – you are no longer limited to dealing with network-
based providers.
Conclusion
Not so long ago, incumbent telcos had all the market power, and business customers had
a passive relationship with them. Telephony was strictly a utility where everyone paid similar
prices and were served by the same provider. There was no competitive advantage to be had
here, and telcos had no incentive to innovate, so it was really just a cost of doing business.
Small businesses were always a casualty of that status quo since they had zero leverage
to level the playing field with the enterprises they were trying to compete against. VoIP
has changed all of that, and arguably, these same small businesses look to be the biggest
beneficiaries now. After all, they’re starting from nothing, and now have unprecedented choice
when it comes to telephony. This means there is a tremendous amount of pent-up demand for
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better solutions, and this is just from businesses that know about VoIP.
Add to this another layer of small businesses that are just discovering VoIP, and there is an
exciting upside waiting to happen for solutions providers who know how to serve this market.
These types of businesses represent the audience this guide has been written for, and once
the knowledge gaps outlined herein have been addressed, VoIP adoption will inevitably
accelerate among SMBs.