27/07/10

By Hugo Harber, Director of Convergence and Network Strategy, Star (www.star.co.uk)

Calling businesses of all sizes

The worldwide recession has resulted in an overall decreased growth rate in the IT sector, but a recent survey* revealed VoIP services to be among the top IT technologies indicating an increased expansion of 20.1%.

This is perhaps not surprising, when one considers that VoIP can offer significant cost savings when compared to traditional PBX fixed line systems. It offers business leaders a transparent and predictable view of a company’s communications costs, something that many finance departments struggle to have a clear view of, and sometimes struggle to effectively forecast for.

VoIP has long been heralded as poised for mass market penetration, and we are now starting to see that this is the case not just for larger enterprises with 1000 plus staff but also for companies with as little as 20 employees. This rise in demand with SMEs was borne out by a recent survey carried out by Star which revealed that, amongst those businesses with 100 employees or less, 41% have already deployed VoIP technology since it was first introduced in the late 1990’s. A further 20% of SME respondents are looking at deploying VoIP within their business over the coming year, showing a 50% increase in the penetration of IP telephony over the next twelve months. These findings also reflect research conducted by Synergy Research Group where IP Telephony was found to be the fastest growing segment of the European enterprise market in 2009.

Beyond traditional convergence

So what are the factors driving this upwards trend amongst SMEs? Increasingly, organisations require telephony systems which are not only cost effective but can help to deliver better customer services and enhance productivity. This is where VoIP can really deliver over traditional PBX systems. Beyond what is perhaps the most compelling reason, cheaper calls, there are a number of factors driving the demand.

As VoIP is based on software rather than hardware, it can be easier to maintain, upgrade and scale up or down. With IP telephony, SMEs can also add functionality and flexibility to their communications to deliver an enhanced level of customer service, such as directly connecting web users with customer support staff and using automated functions such as call forwarding and three-way calling, all of which are rapidly becoming essential tools in our 24/7/365 world. VoIP is also the route to more advanced applications that converge together, much like the usually touted Unified Communications philosophy. What this actually means is that we are seeing facilities like ‘presence’, mobility solutions and rich-media conferencing converging voice, data, application and video technologies and services.

Does reducing costs reduce call quality?

Whilst there are clear business benefits, as with any emerging technology there are a number of factors that businesses should be aware of before making any commitments. The central and over-riding issue with VoIP is ensuring that call quality and reliability are of a sufficient level so that there are no issues such as jitter and latency, which can result in a poor user experience. There are a number of factors that can impact a high quality of service and these can range from IP networks not being ready for real-time communications to organisations employing VoIP technology from more than one vendor.

Real time applications such as VoIP are more sensitive to network imperfections and high quality VoIP relies upon consistent, stable and low-latency network connections. However, most existing networks are built upon technologies that were not originally designed to provide these. As with any complex environment, VoIP requires telephony experts as well as network specialists which, for an SME, could mean further investment in training or recruiting personnel with these specialist skills. In fact, respondents in our recent survey with SMEs also revealed that the leading barrier to adopting this technology is a lack of in-house expertise.

Hosted VoIP Services

So, does that mean if you don’t have the in-house expertise required to manage a VoIP system then this technology is not for you? No. Hosted and managed IP telephony can free organisations from the management distraction of overseeing the network, hardware and software and return a consistent, reliable and guaranteed high level of service. With this option, SMEs use a hosted phone system in a secure location accessed via a VPN which also offers resilience and security and allows them to move away from investment in depreciating PBX hardware which can lead to a costly hardware refresh cycle. Demand for hosted VoIP is certainly gaining ground as SMBs look to embrace the cost and performance benefits of IP telephony, not having to manage it themselves just makes the proposition all the more compelling. In fact, Illumine Consulting now estimates that the hosted VoIP segment of the market is growing 11% quarter on quarter.

With a hosted VoIP solution there are no set up costs or capital expenditure and no hardware to buy, run or maintain. Moving communications costs to a managed operational cost expense, with a fixed price, per user, per month, also makes for more predictable budgeting and billing for the finance department. Critically, the quality of service is managed by the service provider with the expertise and performance management systems in place to ensure that call quality is consistent and flawless.

SMEs look to managed services

We have found that many SMBs are taking the lead when it comes to investing in IT infrastructure and services, as they are more and more partnering with managed service providers. Businesses like Star can help free SMBs from the management distraction of overseeing the network, hardware and software and return a consistent, reliable and guaranteed high level of service delivery.

About Star

Star provides on-demand computing and communication services to UK businesses. Utilising an advanced cloud computing platform, the company has redefined how business people use and pay for the technology that supports them. Star’s On-demand Business ServicesTM are easy to use and pay for and are available any time and from anywhere, removing unnecessary costs for hardware, software and ongoing maintenance.

Since 1995, when Star was founded, the company has been an Internet technology innovator and pioneered the system for cloud based spam and virus scanning for business email that became MessageLabs. In the last 14 years Star has established itself as a leading IT and communications service provider of the highest pedigree looking after 3,500 UK business customers and their 500,000 users.

Star has UK based data centres that sit within a network and communications capability that forms the basis of the Star Platform, from which a wide range of computing and communication services are delivered to customers. Star has over 230 employees working from offices throughout the UK, providing the highest levels of customer service and support.

Star’s technology roadmap will deliver on-demand, cloud computing services to UK businesses who want immediate access to the latest enterprise technologies. For more information please go to www.star.co.uk