Virtualization Technology Adoption

It has long been accepted that SMBs have adopted virtualization technologies or cloud computing at a faster rate than enterprises. It is for that reason that most hosted communications companies focus on SMBs as their target customer base. A recent study released by CompaniesandMarkets.com forecasts the hosted Unified Communications (UC) market will grow near 33 percent CAGR by 2017. However, this growth pales in the face of the forecast for small business spending on IP Telephony. That spending is estimated to grow 83 percent this year alone. It is worth noting that the majority of Broadvox’s IP telephony customers are SMBs. It is also the same for our hosted UC customers – most are SMBs. The factors supporting this adoption of IP telephony and hosted offerings lie much in how an SMB owner approaches technology and business operations.

A small business owner is mostly concerned about operations improvement. An SMB sees real value in avoiding the purchase of servers and software until absolutely needed. Additionally, most SMBs use cloud services for customer database management, sales tracking, accounting, payroll, email and other critical business functions. Therefore, adding Unified Communications as a Service (UCaaS) is not a difficult decision. As I posited during the recent Channel Partners show in Chicago, it is more a question of how we introduce the value proposition of the service to that small business owner that determines the speed with which the technology adoption or sale takes place. A small business wants to look like a larger business and that is accomplished by focusing on Business Operations improvement. Not surprising, but the most desired and used feature of a hosted communications solution is “Music on Hold." The major elements as related to UCaaS are as follows:

• Conferencing (mostly audio)
• Integrated communications for mobile employees
• Integrated applications and features
• Ease of use
• Cost savings
• Productivity Improvements
• Reliable Service
• Responsiveness

While it is true that the adoption of virtualization technology is growing amongst all business, please note that while 90 percent of enterprises use the technology in some form, it represents only around 5 percent of their IT services or applications. Enterprises continue to seek assurances that hosted technologies are secure, can be integrated into existing business process and will track the future needs of the enterprise. Premises-based solutions will continue to be the most desired option for enterprises for some years to come.

Therefore, the message to most VARs and agents continues to be, “Target the SMBs." They have already internalized the value of cloud computing. They just need to know you can provide a hosted UC solution that is customized to their requirements and budget.

David Byrd is vice president of marketing and sales for Broadvox, and is responsible for marketing and channel sales programs to SMBs, enterprises and carriers as well as defining the product offering. Prior to joining Broadvox, David was the vice president of Channels and Alliances for Eftia and Telcordia. As director of eBusiness Development with i2 Technologies, he developed major partnerships with many of the leaders in Internet eCommerce and supply chain management. As CEO of Planet Hollywood Online he was a pioneer in using early Internet technologies to build a branded entertainment and eCommerce website company partnered with Planet Hollywood. Having over 20 years of telecom sales and marketing experience, he has held executive positions with Hewlett-Packard, Sprint and Ericsson.