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Matt Brunk
Matt Brunk has worked in past roles as director of IT for a multisite health care firm; president of Telecomworx,...
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Matt Brunk | May 05, 2017 |

 
   

SMB Voice Market Redefined?

SMB Voice Market Redefined? A look at the future of on-premises, open source, and cloud hosted options

A look at the future of on-premises, open source, and cloud hosted options

Some, if not many, of Toshiba's telephony dealers are out of a product line since the company decided to pull out of the North American market, as announced in late March. Still, the IP-PBX lives on for the SMB market in a few other product lines, including open source versions and too many hosted solutions to list.

Here's a sampling:

While the list isn't indicative of what's available, it is indicative of what businesses aren't buying. Why Toshiba dropped North America really doesn't matter so much as what else is to come in the way of companies deciding to pull out or acquire. As I noted in my recent post, "Telecom Still the Place to Be," the acquisition cycle seems to be waning. What else could companies do? Improve. That, as I've said previously, is the most logical thing to do. The other options are to die off or bail-out.

Each of these types of companies has unique traits and hooks that allure customers. For hosted providers, for example, improving customer retention and building out services for existing customers seems key.

Open source is always going to be a thorn of sorts to other channels since software licensing is a key reason that companies deploy cloud services. The desire there is to be able to contract or expand as needed without the commitment that goes into purchasing licenses that they may or may not be used during the product's life cycle. Small business owners get weary of spending on licenses, especially when the spending impacts their profits.

Toshiba's decision to pull out of the telecom market in some ways surprised me and in other ways not. While Toshiba did have a developed channel and knew how to provide incentives for their dealers and customers, it did face difficulties contending in an increasingly fragmented market and cloud disruption.

For the former "big iron" PBX market to morph into the cloud isn't surprising, but can be challenging for the SMB market. How are hosted providers going to reduce costs to customers? Their platforms will consist of open source, otherwise their licensing costs go up when they don't own the solutions they are selling. The risk here is that not all internal development efforts pay off, as well as the consistency of constant change but not consistency of use in the eyes of the customer. Developing platforms tend to invoke more changes to customers that require new behaviors.

Voice quality does matter for some, and for those that think cell phone as an alternative solution, their hosted services may never be cheap enough.

The SMB market is still too crowded, and there seems to be a disconnect in what companies really need to gain a competitive edge when it comes to selecting and using a telephone system of any type. Presence isn't always relative to smaller firms, and a plethora of UC features doesn't offer a guarantee to open doors and checkbooks to those contemplating change.

In the next cycle of change, it'll be interesting to see if more companies move over to hosted solutions if bandwidth prices continue to drop. Growth may gain hosted providers an edge by taking on more subscriptions, but other than licensing and bandwidth costs how will they do it cheaper than premises gear? There really isn't clarity in either model, since businesses differ on what they base their purchases on, from specific needs to broader requirements. One thing is for certain and that is one size doesn't fit all, and buyers like to have choices.

When I worked for a wiser and older boss, he often told me that this business is akin to a shell game of things getting moved around. Disruption has occurred, but where is it leading the SMB? They have more choices, but a lack of differentiators that's leading to the PBX being put to bed. Are we headed for another Centrex (hosted) vs. premises (PBX) battle? Or will the on-premises PBX function die a slow death and evolve into another application sitting on a server in some software package?

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