Sometimes customers can't be persuaded to switch to a next-generation service, even if it far outshines what they're currently using.
Cable operators are widening their rollouts of hosted voice-over-Internet protocol services for businesses. These offerings, which the MSOs operate out of their own facilities, promise to provide a slew of new features — like being able to reroute a company phone extension to a cell-phone number — for a potentially lower total overall cost than traditional business voice services.
But changing phone providers, not to mention replacing phone sets and systems, is a monumental hassle for businesses large and small. And companies are not eager to throw out a perfectly good phone switch, the cost of which they're likely amortizing over seven or more years.
“Nobody wakes up and says, 'Today I'm going to change all the phones in my business,' ” Cox Business vice president of product development and management Kristine Faulkner said.
Added Chris Carabello, director of marketing for VoIP vendor MetaSwitch: “The No. 1 competitor for alternative providers isn't 'the other guy' — it's the status quo.”
Still, IP is where the commercial voice market is heading, and cable operators are looking to try to gain an edge on incumbent telco providers with hosted VoIP services.
Cox Business, for one, has deployed the VoiceManager-hosted IP voice service in eight of its 16 markets. The service, provided through BroadSoft's VoIP application platform, offers features that include automated attendant, Web access to voice mail and a “find me/follow me” function that rings specified numbers in succession.
“We're seeing a natural migration toward wanting more control and personalization over your call services,” Faulkner said. “The sales process becomes less about how many phone lines you have and more about, 'What's your business and what do you need?' ”
Cablevision Systems' Optimum Lightpath, meanwhile, recently introduced a hosted service that bundles voice and data together for a single monthly fee and incorporates the cost of the customer-premises equipment like Cisco Systems phones and routers.
John Macario, senior vice president of product strategy and management for Optimum Lightpath, said the customers he's trying to target are looking to spend between $30 and $40 per month per employee on voice and data services.
“The research is clear: switching providers primarily has to do with better economics and easier management,” Macario said. “It doesn't really have to do with providing employees new features.”
The Lightpath Hosted Voice service starts at $3,498 per month for 50 employees, which includes 50,000 minutes of use and 20 Megabytes of Internet bandwidth — a cost of $70 per employee per month. But Macario said the company also offers a lower-cost tier, with 10,000 minutes and 5 MB of data per month, for about half that.
“There's no nickel-and-diming with these services,” he said. “You want it to be simple and easy to use.”
Today, most companies use traditional circuit-switched connections or IP trunking to a telecom provider for voice services, provided through their own on-premises switches called private branch exchanges, or PBXs.
In the U.S., the total market for business voice communications services was about $110 billion in 2008. Of that, hosted IP voice services accounted for approximately $16 billion, according to estimates by research firm New Paradigm Resources Group.
IP voice service for businesses, while it's still a small piece of the pie, has become accepted as real, business-class technology, NPRG executive vice president Craig Clausen said.
“VoIP is no longer that service relegated to the hobbyists,” he said. “You don't have to go through these steps to rig it up to your PC."