Small and medium businesses worldwide feel confused by the multiple and complex range of VoIP solutions, despite all the hype about VoIP’s projected toll cost savings, productivity improvements, and a more professional market presence. Over the past few years, an increasing number of VoIP solutions have come to market that are aimed at the SMB segment. Yet, most SMBs are unable to evaluate and decide which VoIP solution is best for them.

That’s the conclusion from the latest global study by Access Markets International (AMI) Partners, Inc. “The market opportunity for VoIP solutions is burgeoning for SMBs,” says Sanjeev Aggarwal, AMI-Partners’ New York-based Vice President for SMB Infrastructure Solutions. “Whichever solutions or vendors SMBs choose, most companies will move to VoIP over the next five years—creating a huge opportunity for equipment vendors, service providers, and VARs.”

The problem? Most SMBs are confused about the multiplicity of VoIP solutions available – including premise-based IP-PBX, managed IP-PBX, hosted VoIP, broadband VoIP, and peer-to-peer VoIP. “The complexity involved in understanding and evaluating the different solutions and vendors, coupled with a lack of voice-savvy IT resources, is delaying what is an otherwise rapid-paced migration of SMBs to VOIP,” Mr. Aggarwal says. “According to AMI estimates, the global SMB market for VoIP solutions was worth about US$3.26 billion in all of 2006, up 26% over 2005.”

Most SMBs look first to brand-name market leaders, such as Cisco Systems, Avaya, Nortel, and others for premise-based offerings. They also look to independent service providers like Covad and M5 Networks for hosted VoIP solutions. In 2006, service providers such as telecom vendors (AT&T, Verizon, Bell Canada, BT, XO Communications, etc) and cable companies (Comcast, Time Warner Cable) became more active in offering hosted VoIP solutions as part of their SMB bundled offerings. Software-based vendors like Digium/Asterisk* and PingTel are providing solutions that SMBs or embedded system vendors can implement.

Many small businesses (1-99 employees) generally seek simple voice-only solutions, while most medium businesses (100-999 employees) want sophisticated unified communications. “Vendors need to understand these requirements and clearly communicate a unique value proposition to their target customers,” Mr. Aggarwal says.

The AMI-Partners report – “Making the Move to Hosted VoIP or Premise-Based IP-PBX: Different Approaches to SMB VoIP Implementation” – was published on February 9, 2007 and provides a comprehensive view of the different types of VoIP solutions available to SMBs and the vendors that provide these solutions.

Some key findings from the report:

• VoIP products and services present a risky, confusing, and costly proposition from the SMB perspective.
• Vendors need to carefully evaluate SMBs’ voice communications needs, and services desired, before developing and packaging solutions. This can be accomplished by a detailed market segmentation analysis, which is discussed in the report.
• Most SMBs have only a Skype- or Vonage-related consumer VoIP level of understanding; the vendors and service providers need to educate the SMB market regarding business class VoIP solutions and benefits. The sooner this is done, the faster will be the adoption of VoIP solutions and services.

About the Study

The report, “Making the Move to Hosted VoIP or Premise-Based IP-PBX: Different Approaches to SMB VoIP Implementation,” is the first in a series of studies published under the recently launched AMI-Partners’ SMB Telecom/IP Communications Service. This initial report examines:

• Different types of VoIP offerings and the pros and cons of each type of solution
• Voice communication needs and services desired, by SB and MB segment
• Steps in implementing a VoIP phone solution

The report also provides actionable recommendations for vendors, service providers, and channel partners. For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, email ask_ami@ami-partners.com or visit the AMI Web site at www.ami-partners.com.