Bringing VoIP to the SME

Hosted VoIP provider taking big steps to bring the benefits of IP telephony to hard-to-serve smaller organizations.

By Ted Stevenson | Posted Oct 6, 2005
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Last week, Las Vegas-based CommPartners—perhaps the biggest hosted VoIP service provider you've never heard of—announced the acquisition of specialist VoIP reseller, Red Oak, Texas-based TxLink. For CommPartners, the TxLink deal is not so much growing the company, per se. Rather, it is part of a strategy to broaden its customer base by offering a more diverse array of services aimed at bringing smaller enterprises and service providers into the fold.

What does CommPartners bringing to the table today? First, the privately held company is a "facilities-based" provider—which means it owns its own IP network—"the largest U.S. domestic footprint, including Hawaii," according to promotional literature. Its hosted VoIP services, including IP Centrex, hosted PBX, conferencing functionality, and IP-to-PSTN connectivity are offered to a variety of primary customers: ISPs—both wireline and wireless—IT integrators, multiple service organizations, private cable operators, and fiber-to-the-home providers, among others.

"We own four switching centers, located in Chicago, Atlanta, Las Vegas, and New York," CommPartners's president and CEO, Dave Clark told VoIPplanet.com These location sport Lucent/Telica class 4 softswitches, servers running BroadSoft's VoIP applications software, and Acme Packet's session border control devices, for security.

"All those four locations are tied together with a meshed MPLS data network," Clark continued. ("Meshed," Clark explained, means that if, for some reason, any of the switching centers was to go down completely, they can simply route traffic around it.)

In addition, CommPartners claims some very robust back-office functionally that, according to Clark, "lets us layer in other applications."

One such application, currently under development at CommPartners, is a hosted, IP-based call center. "We see a market for a call center type application, made available to small businesses," says Clark, who goes on to explain that the resources required for the typical large, dedicated call-center systems put them far beyond the reach of smaller businesses, which would nonetheless benefit from the functionality.

The app factor
Indeed it is the application context that brings the TxLink deal into focus.

The key is not so much the carrier business it brings in (TxLink is a non-facilities-based—"switchless"—operation). Rather, its strengths center around a couple of software-based applications that happen to mesh well with CommPartner's current plans.

The first of these is TxLink's prepaid calling platform, "that integrates very nicely with our core network," according the Clark. "It's an area in which we believe there's pent-up demand," he said. "We will be integrating that platform and working on launching that project in Q1 of next year."

Calling card retailers, according to Clark, are facing an intense price squeeze, and need a more favorable cost structure. "Our underlying network gives us that," he said. TxLink's platform—the software that steps in behind the scenes, once calling minutes have been purchased, and "assigns the PIN, does the registry, keeps track of the usage, and debits that against the account that's already been paid for,"—is the vehicle, Clark explained. CommPartners's back-office OSS, facilitates the integration, creating incremental revenue.

Perhaps the more significant of TxLink's assets for CommPartners, however, is the company's automated provisioning portal. "We do business with some very large carriers—who expect to have a dedicated sales person." Clark explained to VoIPplanet.com "That doesn't work well for smaller customers," he said. "We will integrate this portal in a segregated portion of our website, so that smaller carriers and service providers can come in, see what our geographic distribution is, order their phone numbers, give us the configuration they need, and all of the deployment of that service is done in an automated fashion on our network—like a hosting operation," Clark explained.

Hard fish to land
Providing a convenient provisioning interface for smaller customers is just the beginning, though. Getting IT managers of smaller companies actively interested in VoIP is a major challenge in itself.

"We begin to get customer interest, generally, only when an 'event' is about to occur—a PBX needing to be replaced, buying a new key system, opening a remote office," Clark observed. "Initially, they're only interested in a cost comparison—not in calling features that go beyond what they're familiar with. You generally can't sell features in an SME environment."

"There are two circumstances under which they'll consider: One is where they're looking at writing a big check to upgrade their phone system. The other is where they're looking to get more productivity out of their salespeople," Clark concluded.

"Salespeople can have find -me-follow-me, voice mail over e-mail, can have their office phone number ring on their cell phone, and more," Clark said. Clark himself has his office phone forwarded to his cell when on the road, even has his home calls forwarded—at hours he specifies.

Once customers are on board, according to Clark, you can gradually bring them along the learning curve—get them to appreciate new VoIP features, such as those just mentioned, as well as four-digit dialing among any phones on the company's VoIP network, and the like. .

But to get to the point of cementing the relationship, you need to deliver quality to SME customers. And while a company like CommPartners can control a great deal about its own network, it's tough to exercise control over the customer's internal network—which will have equal impact on call quality.

"You're just not going to bring VoIP to the front door of a business and hope it works," Clark told VoIPplanet.com. "That's why we're very focused on the distribution channel of systems and IT integrators." In many cases, these are the same providers who have installed the physical networks in smaller companies, and who oversee their ongoing maintenance.

One final obstacle faced by VoIP providers when courting SME customers has nothing to do with hardware or software; it is the human factor. Some people within a potential customer organization may see it as their job to prevent adoption.

"We've all heard the story of the company that has some poor old phone guy trying to hang on to his gig while some young buck in IT wants to show the world what he can do with VoIP," explained Mark Peterson, CommPartners vice president of sales and marketing. "But virtually anyone may have an interest in fighting change. We've even had deals torpedoed by a the receptionist, who is worried about losing a job function," he said.

Nonetheless, despite the challenges, CommPartners is excited about addressing the huge SME market. Applications will be a big part of the adoption they foresee. They've created custom apps on request from new customers, thus cementing a relationship for life. This is so important that Dave Clark is actively considering spinning off a subsidiary to do that kind of customer-demand work full time.

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