VoIP software is not a new line of technology, with the release of the first official commercial Internet phone, VocalTec, in 1995. Today there are VoIP mobile apps, VoIP phones and you can find VoIP functionality in various web applications, such as Mikogo. Most importantly, VoIP systems are no longer limited to large enterprises with many small businesses opting for VoIP phones over landlines.
There is certainly a growing shift towards VoIP systems for businesses of all sizes, due to its affordability and reliability. So as a small business, what must you consider when switching to VoIP phones?
We spoke with Daniel Harris, Market Research Associate from Software Advice, who recently conducted an in-depth study and analysis of 362 businesses concerning their needs in regards to VoIP systems.
Key Findings by Software Advice:
- Over half of those surveyed were evaluating VoIP systems for the workplace.
- Small businesses put a premium on both reliability and scalability when evaluating VoIP solutions.
- Small businesses are overwhelmingly interested in hosted rather than on-premise solutions.
Interview with Software Advice about VoIP
1. According to your findings, 57% of survey respondents started looking into VoIP systems in 2014. Did this figure exceed expectations?
Many of the buyers who contact us are small businesses. Such businesses have been slower to adopt VoIP technology than enterprises, most of which began to migrate to SIP trunking in the first decade of the 21st century in order to save on internal calling between branch locations. Additionally, a number of our buyers work for start-ups that are implementing a phone system for the first time. 13% of our buyers, for instance, were running their businesses using cell phones. These buyers most likely work in growing organizations that have begun to run into pain points with virtual number solutions, which are designed for very small businesses and self-employed entrepreneurs.
Note: SIP trunking is a network service that replaces traditional local and long distance voice service for users of VoIP systems, allowing them to connect calls to and from the traditional phone network with VoIP-based extensions.
2. Why the large shift in businesses moving from landlines to VoIP systems?
Seventeen percent of our buyers cited lack of reliability as the primary reason why they were switching to VoIP. This concern with reliability indicates that such buyers were running into end-of-life issues with PBX systems designed for analog or TDM trunking. Parts for such systems must be purchased second-hand from sources such as eBay, and there are few technicians who can even service them. The unstructured data I evaluated from our buyers contained many complaints about end-of-life problems with legacy PBX systems.
Note: TDM trunking is an older form of digital voice and media service that sends information over the traditional phone network as opposed to the Internet – it was the dominant form of business voice service before VoIP.
A Private Branch Exchange (PBX) system is a phone system that uses a connection to the traditional phone network (PSTN) and/or the Internet in order to deliver voice service to extensions in a corporate directory.
3. What applications and functionality do small businesses want most from a VoIP system?
Small businesses are concerned above all with reliability – functionality is a secondary concern. Requests for specific features were much rarer than calls for reliability and effective support in the unstructured data. That said, most small businesses are looking for basic PBX functionality from their phone systems. Extensions for individual employees and departments were requested at a far higher rate than any other feature. Our buyers were also seeking auto attendants that can route inbound calls to extensions automatically using voice menus, thereby eliminating the need for a receptionist to route incoming calls. Beyond such basic PBX functions, we saw a huge demand for conferencing applications. This was an interesting finding, as many PBX systems designed for small businesses don’t offer conferencing. A number of small business VoIP systems limit conferencing to three-way calling. Small business VoIP systems that offer videoconferencing are even rarer. Small businesses should therefore consider best-of-breed solutions for their conferencing needs.
4. Why are some businesses reluctant to implement VoIP systems? What are the pain points?
Enterprise VoIP deployments can be incredibly complex and frequently involve consulting firms, channel partners and multiple IT teams. Small business deployments are much simpler as the networks over which voice traffic will travel are exponentially less complex. The problems that small businesses run into generally involve suboptimal connections to the public internet (e.g. a DSL connection) or misconfigured firewalls. While quality has traditionally been a concern, our recent survey of decision-makers involved in the selection of SIP trunking providers showed that quality problems are very rare. Only 1 respondent out of 208 reported being dissatisfied with call quality.
“Seventeen percent of our buyers cited lack of reliability as the primary reason why they were switching to VoIP.”
5. Transition phases are expected with new technology. How can businesses best switch to VoIP with minimal hassle?
If a business really wants to ensure a hassle-free cutover in a matter of hours, they should look for a VoIP provider with a reputation for quality support. Plug-and-play deployments can be hassle-free for organizations with knowledgeable IT personnel on staff, but smaller organizations may want to bring in a consultant if they choose to go the plug-and-play route. Many providers offer extensive support during the installation phase in particular. If you choose an on-premise system, local resellers will generally assist with deployment as well as customization of the system (including custom software integrations).
Note: “Plug-and-play” refers to a hosted VoIP provider that sends out IP phones capable of contacting the provider’s network to download configuration settings automatically, as opposed to an on-premise solution that requires an IT team to configure phones to work as extensions of the IP PBX.
“Lack of IT resources didn’t scare (businesses) away. Only 6 percent of the buyers in our sample had IT job titles.”
6. Not all small businesses have a dedicated IT person or team. Do your findings suggest only IT companies implement VoIP?
Only 6 percent of the buyers in our sample had IT job titles. Since organizations with on-staff IT would no doubt task such personnel with evaluating VoIP solutions, we can conclude that very few of the businesses in our sample had any IT personnel to help with deployment. However, this lack of IT resources didn’t scare them away from the substantial cost savings that can be achieved with VoIP technology. In a recent survey that we ran, we found that only 14 percent of businesses without full-time IT on staff ran into networking issues with VoIP technology, even with multiple sites in their voice networks. This finding suggests that it’s eminently feasible for businesses without IT personnel to deploy VoIP technology successfully.
7. VoIP services can be divided into two categories: on-premise or web-based solutions. What is the preference by small businesses?
Seventy-seven percent of the buyers we spoke with wanted hosted systems. None of the buyers in our sample specifically requested on-premise systems, almost certainly because most of them were small business buyers who can’t afford the luxury of on-premise data centers. Hosted solutions make a lot of sense for small businesses since they eliminate the work of managing and securing the PBX system. The provider will keep the system updated and assist with configuration.
8. For companies that need multiple phone extensions in one office, how can VoIP systems serve their needs?
A business that needs extensions will also need some kind of PBX system, as the whole function of such systems is to divide incoming connections to the Public Switched Telephone Network (PSTN) and/or the public Internet in order to provide dial tone for employee extensions. Businesses with 2 or fewer employees can get by without PBX systems, but above this cut-off directory functionality becomes crucial. PBXs designed for VoIP service as well as hosted PBX solutions accessed over the public Internet are now far cheaper to purchase and maintain than traditional PBXs designed for analog and TDM voice services.
The results from the Software Advice survey on VoIP for small businesses suggests a strong trend towards VoIP solutions. More than half of those who were surveyed were looking into VoIP for their business in 2014, and it was the web-based hosted solutions which led the race for the number one choice of VoIP solution. Interestingly, reliability was the strongest reason for switching to a VoIP system, even over the cost benefits – this is perhaps due to many small businesses currently relying on cell phones.
I think that just about covers the main thoughts about VoIP for small businesses. Thanks for taking the time to speak to us, Daniel!
Discussion: Have you recently implemented a VoIP phone system at your workplace? Please share your experience in a comment below.
Or if you have any other questions regarding VoIP systems for small businesses and the above survey, leave a comment below for Daniel and the Software Advice team.
Note: the above survey results, chart data and other statistics were sourced from a report published by Software Advice, which included a random sample of 362 small-business buyers (with revenues of under $100 million)
About Daniel Harris:
Daniel HarrisMARKET RESEARCH ASSOCIATE
Daniel Harris is a Market Research Associate with Software Advice who focuses on VoIP technology as well as broader issues in IP communication solutions for businesses. He holds a PhD in English Language and Literature from the University of Chicago. Daniel joined Software Advice in 2014.