Cash in on VoIP

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This article appeared in the 21 August 2006 issue of CRN magazine.

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Cash in on VoIP
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If anyone is still in any doubt as to the impact voice over Internet is having on the local enterprise telephony market, they need only look at recent statistics from IDC.

In the December quarter last year, 60 percent of new telephony equipment sales were in the IP sector, with IP PBX units significantly outselling traditional PABXs.

This figure is tipped to grow to 69 percent by 2007. CRN rounds up 10 industry leaders together for a roundtable discussion at the beginning of August to find out just what is driving this market growth, where the market is headed and what products and evolving business models offer the best potential returns for resellers in this evolving market.

Major growth drivers

The VoIP market is clearly having a huge impact on the Australian telephony market at present.

Many recent studies have extolled the virtues of the technology, not to mention the cost savings possibilities the service offers. New service providers are jumping on the bandwagon at a ferocious pace.

According to a report from market research firm Market Clarity, there were 245 IP voice providers in Australia at the end of June this year.

So what is it that is actually driving this growth in VoIP customer uptake? Is it merely the ability to save on phone call costs or are there other more major factors at play?

Matt Farmer, national sales manager of residential and SMB VoIP provider engin says that from his company’s point of view, growth at the lower end of the market was definitely being driven by customers wanting to save money.

“In our segment, cost savings are paramount, followed by functionality,” he says. “Applications are important, bust cost justifies those applications.”

Rob Hayden, director of SME VoIP solutions and equipment provider ISPhone is less convinced, however, arguing that there is no one particular thing that could explain why voice over IP had taken off.

“IP is the core infrastructure that allows a whole range of applications to be integrated. Companies contemplating an IP upgrade may do so for a whole host of reasons. Moreover, if service providers want to be really competitive in the current market, they need to be able to offer compelling functions.”

Gary McLaren, marketing director of IProvide, AAPT’s IP networking and voice services provider for the SME market, says a recent phenomenon is the availability of new features across multiple sites for SME customers that had previously not existed. This, he says, is definitely acting as a major market driver.

engin’s Farmer agrees that the IP market had now reached the point where it was feature advanced. “Once SMEs see that they can do what larger organisations can do they get very excited about the applications being offered.

“Before we were selling plain old telephony. Now we are talking about and selling applications. “The fact that you can make or take a phone call is almost irrelevant. I’m selling screen pops, virtualisation – we’ve fundamentally changed what we used to call telephony. What we’re now talking about is interactions. As an industry, we still haven’t made that distinction,” Farmer says.

Ross Cochrane, managing director of distributor Express Data, says it is easier for larger corporations to find justifications for the technology on the basis of the depth and breadth of applications that they can leverage through a major VoIP implementation.

These applications can include CRM, call centres and help desks. Additionally, having multiple sites and wanting to get visibility across those sites, knowing who’s online, having a centralised receptionist, even for small businesses, can give a very professional appearance for whoever is ringing in, especially for smaller organisations.

Chris Luxford, CEO of systems integrator 3D Networks, believes the key driver for the market right now as a whole is unified communications, with the ability to unify all sites with products such as instant messaging. “This is a major selling point for us,” he says.

“No one’s buying TDM today. Even at the smaller end, people want feature-rich applications like the big corporates have. They don’t even see the difference between TDM and IP because the pricing is not that much different. It’s almost like there’s no differentiation.

“Often they don’t even know if they’re getting IP or TDM. What they’re getting is a functional solution that meets their requirements. The underlying infrastructure is almost irrelevant,” Luxford says.
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