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VoIP News Item

Yankee Group Report Recognizes VoIP's Strong Growth Potential Among SMBs

12/5/2005

Boston, MA, December 5, 2005 — Although still in the early stages of adoption among small and medium businesses (SMBs) and mid-market enterprises, VoIP is gaining momentum according to Yankee Group's recent report, Assessing the SMB VoIP Market. In particular, hosted VoIP solutions are finding particular favor within SMBs, as 70% indicate they would prefer a hosted VoIP solution to a premises-based.

VoIP has quickly become the newest, most promising, yet most disruptive voice communications technology within the telecommunications industry. VoIP offers SMBs an array of cost-saving and productivity-enhancing benefits, ranging from reduced toll charges and network management expenses to advanced calling features and a more unified, flexible mobile workforce. Businesses can choose from a variety of VoIP solutions, including broadband VoIP similar to consumer offerings and a do-it-yourself implementation to premises-based and outsourced, hosted service models.

A hosted VoIP solution is attractive to SMBs because it enables them to focus on their core business rather than allocate resources to implement and manage the system. It also empowers them to avoid the cost of trying to keep up with the changes in technology that come with a disruptive technology in a nascent and rapidly evolving market. In order to see continued growth, service providers and vendors must provide SMBs with the tangible benefits of hosted VoIP technologies, backed with customer-centric service.

In Yankee Group's recent report, M5 Networks Brings Customer-Centric, Hosted VoIP Applications to SMBs, it presents New York-based M5 Networks as a promising example for IP voice providers in how to offer profitable, customer-centric, business-class, hosted VoIP applications to SMBs. Providing its outsourced IP phone systems to 400 SMBs with 10 to 500 employees predominantly in the New York metropolitan area, M5 stresses five key aspects of its customer delivery: experience, reliability, quality of service, responsiveness and support.

"In the next few years, the demand for VoIP solutions among SMBs will continue to grow," said Matthew Del Percio, Yankee Group, associate analyst, Small & Medium Business Strategies. "Many SMBs will be hard pressed not to find the productivity increases, cost savings and flexible communications attractive for their companies' bottom line."

Although VoIP is an extremely promising technology solution for SMBs that the market as a whole is very interested in, there are many reasons why the adoption rate has not grown as quickly as anticipated—including technology issues, a fragmented vendor landscape, and a rapidly evolving regulatory landscape. Yankee Group recommends that as SMBs look to change their phone systems and services, they must first establish a business case, create an implementation plan and then take the time to choose a VoIP vendor or service provider that has experience and strong commitment to quality. For service providers to advance in this new market, it is crucial that they gain a deep appreciation for and understanding of applications and how they address SMBs' operational challenges.

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