Ask Steve

Welcome to the new PHONE+ column, Ask Steve. Ive received some great questions so far and plan to tackle as many as I can in the coming months. This months inquiries focus on smaller businesses those with 20-99 employees, one-to-two IT people and one part-time IT contractor, VAR, agent or dealer.

Q: Are SMBs buying into VoIP and for what reason?

What seems to be the most attractive feature of the service to the SMB market?

Scott, Columbia, S.C.

A: Scott, media pundits throw around VoIP adoption numbers a bit like spuds during a wild game of hot potato. Heres what the small businesses say: one-third of non-VoIP users today would consider adopting VoIP to allow their remote workers to be more productive and to consolidate voice and data over one network a fact thats pretty consistent across all SMB size segments. SMBs that already have adopted VoIP did so because they outgrew their existing systems (rather than to save money on calling), which implies they saw some value in the benefits inherent in VoIP.

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What are those valuable VoIP benefits for SMBs? Well, turning once again to the SMBs themselves, one or two features do not stand above the pack. For businesses with 20-99 employees, unified messaging, call logs and easy MACDs (moves, adds, changes, deletions) are the top demanded features. These features are followed closely by e-mail integration, simultaneous notifications and simple call conferencing. No big surprise, the larger the SMB, the more important things like easy MACDs and a simple Web portal interface become.

In the end, its important to have a TCO answer to the SMBs inevitable question about cost savings. However, its equally important to show the business value of the solution including mobile-worker empowerment, unified voice/data communications and the ability of employees to better balance work and home commitments, thereby making them more productive.

Q: Is a small business more likely to want to buy a premises-based system or a hosted system?

Tasha, Berkeley, Calif.

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A: Like all things related to small businesses, it depends. Most simplistically, the smaller the business, the more likely it is to prefer a hosted solution. The pay-as-you-go approach coupled with minimal on-site IT support makes hosted solutions desirable for small businesses. Based on Yankee Group survey data, businesses with fewer than 20 employees are three times more likely to want hosted IP solutions. Those businesses with 20-99 employees are more evenly split between demand for hosted and premises-based solutions. Another thing to consider is the industry segment of the small business. Small businesses in retail segments (a segment with more branch/franchise locations per firm) are nearly three times more likely to want hosted IP solutions, whereas firms in professional services and manufacturing sectors are more evenly split between hosted and premises-based IP solutions.

What Do SMBs Want?

Ask Yankee Group analyst Steve Hilton. Send your questions to Please include your name, city, state and a phone number where you can be reached.

First names and locations only will be published.

Steve Hilton is the vice president of Yankee Groups Enterprise Research Group with an expertise in converged solutions for SMBs. Hilton manages a team of analysts delivering consulting, research and programs to help vendors and service providers better serve SMBs, midmarket enterprises and large enterprises globally. Visit Yankee Group online at

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