As VoIP gains popularity, some businesses forgo traditional phones entirely
More than a fifth of American homes have only a wireless phone, new data suggest. But home isn’t the only place where the traditional landline is becoming optional.
Businesses can now get by without phones, too. The idea, however, is not to put all employees on cell phones only.
Voice over Internet protocol, or VoIP, takes analog audio signals and converts them into digital data that can be transmitted over an Internet connection. The biggest advantage for users: flexibility.
You get a wide range of options, from using a standard-looking handset to abandoning a phone altogether and making calls with software on the desktop (and a headset). Calls can be routed just about anywhere, including to cell phones.
“It used to be that only larger companies could afford to do this,” said Brent Cooper, CEO of the Covington-based IT firm C-Forward Technologies. “It was really expensive; you had to have the right kind of network. Now the costs have dropped so much, it can be a really attractive option for smaller companies.”
His 18-employee company both uses and offers a VoIP solution. C-Forward is a reseller of the AltiGen Communications phone system.
Some of his employees use phones, and some go straight through their computers. Cooper can easily forward calls to and from any phone or have calls forwarded only when they’re from selected numbers. He could have all of his people working from home if he wanted, using their regular work numbers.
In that sense, a small company can seem bigger. Because of a feature sometimes called “shared call appearance,” customers, either calling in or being called, can’t tell the employee isn’t at his desk.
Cincinnati Bell offers its own VoIP services. It launched eMerge, geared to small and medium-sized businesses, in February. Smaller businesses, in fact, are more likely than large ones to adopt the technology, said Dave Heimbach, vice president of VoIP services for Cincinnati Bell . Because of the economy, decision-makers at large corporations are in a conservative mode.
“We’re seeing a bit of a slowdown in decision-making with respect to technology migration,” Heimbach said. “The concept of moving to new technology is introducing risk into the equation. Small businesses are more apt to want the gains of the productivity tools and cost savings.”
Market has big potential
There were about 939,000 installed hosted IP telephony lines in North America as of the end of 2008, according to the business research and consulting firm Frost & Sullivan. The firm expects the installed base to grow to about 3.6 million lines in 2014.
Revenues, estimated based on an average bundle of features and capabilities, reached about $557 million in 2008 and are expected to exceed $2.4 billion in 2014.
But growth in 2008 was “fairly slow,” according to a February report from Frost & Sullivan, at about 15 percent. It cited the economic downturn and lack of aggressive marketing, among other factors.
The market remains fragmented, with more than 50 providers, the company said. They offer varying bundles of applications, typically including local and long-distance voice, voicemail or unified messaging, auto attendant, conferencing and contact center. Frequently, they’re packaged with an access line and an Internet service.
The technology is flexible enough, in fact, that the Home Ownership Center of Greater Cincinnati was able to employ it for a specific project.
In arranging a telethon on preventing foreclosure with CET and Fannie Mae , the center needed to set up a call center. Cincinnati Bell created a system where calls were first routed to CET’s call center and then, when they overflowed, to Fannie’s Mae’s call center, with 45 phones, in Virginia.
The one-day event was held in June 2008 and repeated in February this year. It will happen again in October. For two or three days after each event, the number rang directly to Fannie Mae. Then it was routed back to the Home Ownership Center.
The setup worked perfectly, at least as far as technology. In February, it could have used a little more volunteer power to answer all the calls.
“We got more response than what we were hoping for,” said Rick Williams, CEO of the Home Ownership Center. “We were not prepared for the type of volume we received. Neither was Virginia.”
The February event resulted in more than 8,000 calls from people worried about foreclosure.
Easier to scale up or down
Heimbach said VoIP is an area of revenue growth for Cincinnati Bell, but he would not provide figures.
Cooper said the AltiGen Communications product can cost $10,000 to $20,000 for a small company and $30,000 to $40,000 for a larger business.
If companies choose to go without traditional handsets, they can save $200 or more per employee.
The technology offers a scalability not present with traditional phone systems.
“You deal in increments of one,” Heimbach said. “You can call us and say, ‘We need to add another user,’ and we drop a phone in the mail and you plug it in. If you no longer need phone service, you cancel a line, as opposed to with a regular phone system where there’s dedicated, fixed capacity.”
Premium content from Business Courier by James Ritchie, Staff Reporter