Ready for Off-the-Shelf VoIP?

By Ed Sutherland | Jun 17, 2009 | Print this Page
http://www.enterprisenetworkingplanet.com/unified_communications/Ready-for-Off-the-Shelf-VoIP-3825456.htm

The next time you are at a big box electronics store for a printer cartridge, hosted VoIP provider 8x8, Inc. hopes you’ll also pick up an IP business phone system. IP phone services are going retail, jettisoning the jargon, and eliminating the technical hurdles previously associated with business-class Internet dialtone.

"We’re trying to take the jargon out of it, "said 8x8 vice president of business and channel development, Huw Rees. Rather than a barrage of confusing technical specs, the provider of Virtual Office hosted PBX service is streamlining its message to small business: ‘Here is a business phone service—by the way, it does all this.’

The new goal for 8x8 is to make its products a commodity, like paperclips, lined notepads, or any other off-the-shelf office necessity. In May, the company inked an agreement with Office Depot to sell a plug-and-play VoIP bundle. The $199.99 package includes the 6755i Virtual Office IP Phone from Aastra, along with 8x8’s Virtual Office hosted IP phone service. The phone replaces the analog Virtual Office ST2118 phone previously available from Office Depot. In 2008, 8x8 signed a similar agreement with Staples.

Despite the recession causing many companies to curtail IT budgets, the economic crunch is actually helping 8x8, which promotes hosted VoIP as a way to offer extensive PBX features for around half the traditional phone system price.

"Businesses have been looking at every way to save costs," Rees told Enterprise VoIPplanet. "The economic downturn hasn’t been a downturn for us," he said. Indeed, earlier this month, 8x8 reported a 15 percent increase in subscribers over the previous quarter.

"The use of retail outlets by VoIP service providers is simply a means of connecting the equipment purchase (broadband modem/router and phone) with VoIP services. One stop shopping," Keith Nissen, an In-Stat Research analyst, told Enterprise VoIPplanet.

Rees points to the greater demand to squeeze costs, but also the company's closer connection to electronics giants, such as Office Depot. "Small and medium businesses shop at these stores for other things," he said. The 8x8 executive said its growth is being fueled by doctors, lawyers, and other businesses with an average of seven employees.

To further cater to the growing market, 8x8 is making changes in how it handles small business subscribers. Where previously 8x8 "let customers fare for themselves," Rees said the hosted VoIP provider now automatically offers a one-hour technical support phone appointment. The other change: helping subscribers tweak their systems to exactly match their needs.

A more customer-friendly attitude is seen in features included in the 8x8/Aastra IP phones, including instant dial-tone availability and ability to work behind company firewalls.

"Setting up VoIP should be as easy as setting up your DVD player, but often it isn't," Steve Hilton, a Yankee Group analyst, told Enterprise VoIPplanet.

Making VoIP easy to set up could be the gravy train for companies like 8x8 reaching out to small businesses. Simply offering cheaper phone service probably won’t be enough.

"For most phone system solutions, very small businesses need some technology help to set up the solution and tackle any network issues that arise," Hilton said.

Hilton said only 8 percent of small businesses have adopted VoIP. Unlike enterprises, which quickly came aboard because of the immediate and significant cost savings, "there has been no comparable cost savings for SMBs. Therefore, they have been slow to adopt," according to Nissen.

So, cost savings is a necessary ingredient to making VoIP attractive to small businesses, but for real success in the big-box-store market it must offer great features on top of a great price—and be absolutely simple to deploy.

"The problem for the industry is that VoIP is less costly. Lower revenue is not a good business model," Nissen said.