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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Others agreed that, whilst IP comes up in large IT departments, for the average customer at the lower-end of the marketplace who is not that technically skilled up, they don’t particularly care whether their telephony system is IP or not as long as it gives them the reliability and functionality they want.

Peter Dillon, chief operating officer of IP networking vendor and equipment provider Avaya says when it comes to the higher-end of the market, when enterprises already have systems that allow them free calls between sites, selling large IP upgrades has to involve functionality such as increased productivity, ease of management and network consolidation.

“Instead of having to have a different relationship with your voice and your data guys, your data guys can take ownership of your one network, making the whole thing far more cost effective,” he says.

Farmer adds that he still believed the driver for every market segment was still different. “Despite the features that may be available, when it comes to the bottom line, the lower end is saying cost, the middle end is saying functionality and the key corporate end of the market wants investments that show efficiencies.”

Craig Neil, managing director of medium to higher-end level VoIP provider NSC, says it is more about the benefits of the actual solution. “At our end of the market, it’s more about applications, centralisation and virtualisation. I can’t think of a single instance where we’ve done an implementation based purely on core cost savings. It’s more about presence, mobility,” Neil says.

“It’s worth remembering that, when it comes to PABXs, it used to be the case that the one in head office wasn’t compatible with the one in a regional centre. Things like centralised architecture and software portability between sites, meaning the same application is available wherever you are (including the call centre) are the real drivers. Call costs come into it, sure, but it’s not the major driver at the medium to higher end of the market.”

Tony Warhurst, director of SMB VoIP services and equipment provider Zultys Australia, says cost is still an important market driver at the lower market end, though that situation is slowly changing.

“Of course cost is important. We launched our products with that in mind. It’s value for money and we’re not talking about business-functional products per se.

“However, even at the small end, businesses are starting to get some functionality and some business products that they can use. Once businesses see the benefits they can garner from increased functionality, they want more and more.

"Sometimes demand is driven by home users doing things with their residential VoIP services and then asking, ‘why can’t I do that with my business as well?’. True, it’s often a case of them seeing their home phone bills drop and then wondering how they can do the same thing at work.”

Cochrane says it’s worth remembering that, in the mid to high-end corporate space, the whole IP platform required a huge investment in network infrastructure.

“Voice cannot be looked at in isolation. It’s impossible to separate it from data functions such as security, storage and a whole range of other applications.

“One needs to take a holistic approach to what features and functionalities are going to be incorporated into a unified communications platform. To look at IP telephony, as part of a broad network upgrade, purely on the basis of cost, is not a realistic proposition.”

Generally, the consensus seemed to be that, whilst every business case was different and that the motivations for going down the IP telephony path differed from organisation to organisation, the larger the company, the less pertinent the cost of implementation and the ability to make savings on calls is.

Conversely, the larger the organisation, the greater the demand is for rich applications and functionality.
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