Integrating Telephony And Productivity Enhancing

Small and medium-sized businesses (SMBs) constitute an integral part of the economy, accounting for approximately 90 percent of all businesses. They pervade all verticals from healthcare to manufacturing to information technology. However, SMBs face larger survival challenges compared to their brethren in the large enterprise segment. To successfully compete in the same market as the large businesses, SMBs constantly need to address issues such as:

What does an SMB company need to do to increase its competitive position in the rapidly changing global market place?

How does the company manage its efforts to increase its competitive advantage with the perennial problem of managing costs and resources?

How does the company enhance its existing infrastructure to better enable it to compete against its peers and larger companies with more resources?

Here we would like to provide a brief overview of the communication infrastructure needs of small and medium-sized businesses including telephony and applications such as messaging, conferencing and collaboration. The overview places emphasis on the needs of the >100-employee businesses as the infrastructure needs of this segment are more complex for vendors to address.

The first section outlines challenges faced by the SMB segment, primarily occurring due to innate characteristics of the business. The second addresses the current state of the market and how vendors are catering or not catering to the SMB segment needs. Finally, the third section provides an insight into how one specific solution, namely Devana, is addressing the needs of this segment.

Intrinsic SMB Challenges

The economy is poised at the cross roads of recession and growth. Emerging out of the economic recession of the past couple of years, businesses off all sizes, across all industries are concentrating on one objective - growth. Accordingly, mid-sized and small-sized business segments have a number of challenges they must overcome before they can achieve this growth objective. Small businesses defined here range from 1 to 99 employees and mid-sized businesses range from 100 to 499 employees. Generally referred to as the small and medium-sized business market (SMB) market, this combined group spans across a large number of the existing business population.

Currently, one of the primary requisites for the SMB market is to compete head-to-head with larger enterprises that are in the same business but have much more resources compared to the SMB sector. In this customer-driven market, businesses are not given leeway due to the size of the company.

The following are some of the challenges that small and medium businesses face in the current competitive climate.

Cost Vs. ROI - Deploying IP telephony for SMBs, which is taking the rest of the world by storm, is an expensive proposition. This is especially true when the nature of the business does not warrant all the advanced functionality that comes with an IP telephony solution. While it is true that a smaller enterprise will have much more flexibility in upgrading the network to deploy IP telephony and enjoy increased productivity and reduced operating costs, there still exists extreme reluctance to invest upfront in such expensive technology.

Rising Operating Costs - Higher energy prices, employee benefit implementation costs (such as healthcare costs), wholesale prices, business insurance premiums, and other costs associated with regulatory compliance, affect SMB technology decisions. These impact the ability of SMBs to increase operating incomes. As a result of this, budgets for technology that can increase productivity such as advanced voice messaging and unified messaging (UM), IP telephony, and conferencing and collaboration are either getting smaller or purchase decisions are being deferred into the future. Given the costs associated with deploying UM and conferencing and collaboration, the large enterprise segment is the only one so far seeing the benefit of deploying these productivity-enhancing technologies.

Mobility - The trend of having a geographically distributed employee pool is growing stronger and there also exists an overall increase in mobile workers. The difficulty associated with managing such an employee pool efficiently is yet another challenge small and mid-size businesses have to face. These businesses have to implement real-time connectivity between central offices and field operations/branch locations or employees themselves. Most real-time unified communication tools that are currently penetrating the large enterprise segment are either too complicated or too expensive to be implemented by SMBs.

In-house Expertise - Lack of in-house information technology (IT) personnel acts as a stumbling block as it can often lead to slower migration to new technologies. Businesses often are unable to establish a clear correlation between technology spending and its impact on overall productivity. Furthermore, an increase in choice of deployment options and technology solutions is further slowing migration as these small and mid-sized businesses do not have the time and resources to evaluate and compare the options.

Increase in Vendor Choice - Choice in technology and deployment options combined with a growth in vendor choice is becoming a challenge for the SMBs. Growth in vendor choice has created more confusion for customers in terms of differentiating between various vendors. Specifically, within the small business markets, lack of in-house staff further makes it difficult for this end user group to not only understand technology but to separate one provider from another in terms of financial stability, viability of strategic direction, total product portfolio, customer service and overall market positioning.

External Challenges - Supply

There are some important criteria that vendors have to fulfill in catering to the SMB segment. Solutions should offer scalable deployment and provide a migration path for technology upgrades that enable organizations to grow and adapt their communications infrastructure as their business needs change. Additionally, vendors have to provide support for open, non-proprietary standards such as Session Initiation Protocol (SIP) that help protect communications investments as technology changes. Finally, the solution should provide software applications that improve business processes and connect all the departments and resources of the business into a single, integrated machine.

The market currently has no dearth of vendors providing solutions for the SMB segment. The competitive landscape can be broadly divided into those that focus on the large enterprise segment but also have an option for the SMB segment and those that focus solely on the SMB segment. Companies like Avaya, Nortel and Cisco that dominate the large enterprise communications market are good examples of the former category. Within the latter, the spectrum includes vendors that can provide pieces of the total infrastructure and those that can provide the complete communications solution needed by the business. Companies such as AVST and ActiveVoice provide just the messaging component but robust products for the SMB market. There are only few vendors that provide a one-stop shop for a wide range of SMB solutions. Companies like Mitel and Station Network developer of Devana fall into this category.

Large Enterprise Vendor Approach

As the SMB market continues to gain recognition as a viable target segment many large communication infrastructure vendors that have so far focused primarily on the large enterprise segment, are introducing or have introduced products that cater to the SMB segment. The primary approach here is to target smaller businesses with scaled-down and therefore lower priced versions of complete corporate solutions.

The advantage here lies in the small or medium-sized business procuring a complete integrated solution with "one neck to choke". However, the challenge lies in the SMB segment's shift in focus from having the cheapest solution to having the most economical solution. The differentiation here is that the cheapest solution usually has only the basic necessities whereas the most economical solution has enhanced capabilities that provide a competitive edge but at an affordable price point.

While the large vendor approach allows smaller businesses to get a taste of solutions that large enterprises enjoy, scaling down also reduces the capabilities included in the solution. For example, in certain enterprise solutions, where unified messaging becomes a default in the voice messaging solution and both capabilities are available at the same high price, the SMB solution has only voice messaging by default with UM capabilities at very high price points.

This sometimes is not the best value proposition for this segment as productivity application needs of SMBs segment are frequently comparable to those of large enterprises. This is especially true of businesses that have over 100 employees rather than very small businesses that continue to focus on cost savings.

This challenge is faced not only by the businesses themselves but their vendors as well. More cost-conscious businesses purchase less expensive solutions and vendor revenues per customer/ user are, therefore, lower than the revenues vendors can generate from larger and more demanding businesses. In addition, purchase of small capacity also prevents the vendor from making up for lost revenue through quantity. Adding to these challenges is the fact that a sale to the SMB segment still requires the same sales effort as that dedicated to the large enterprise customer, thus bleeding the resources of the vendor. These have been some of the primary reasons for large vendors to turn their focus away from the SMB segment.

Independent Product SMB Vendor Approach

The intrinsic challenges have been touched upon in Section I. These challenges become even more pronounced in the SMB vendor approach. For example, lack of in-house IT personnel dictates solutions that are not complex to integrate. Interoperability issues, therefore, becomes an expensive challenge to businesses purchasing solutions from different vendors.

Increase in vendor choice for each of the components like messaging and telephony also represents a challenge. This is primarily because rising operating costs lead to tight budgets. This allows no time, expertise or financial resources to allocate to researching and deciding which best-of-breed solution best fits the cost vs. ROI model of each business.

Finally, lack of a single point of contact leads to expensive relationships with multiple vendors and a drawn-out procedure of figuring out which component is malfunctioning.

All these indicate that vendors offering complete communication solutions which tie-in the various enterprise components and applications, are optimal providers for SMBs.

Chart 2: Integrated Communications Solutions Benefit Multiple Businesses Functions in SMBs

Devana's Approach To The SMBs Market

Devana falls into the second category of vendors - those having a significant focus on the SMB segment. However Devana also belongs to the class of vendors that provide a complete end-to-end solution but doing so at an affordable price point for cost-conscious SMB customers.

Devana provides a complete portfolio of emerging communication and technology products for the SMB market. Devana markets a host of enterprise communication products ranging from IP telephony systems, voicemail and unified messaging, unified communications, audio, video and web conferencing, presence management, workgroup and call center management solutions.

Devana also provides managed services such as local and long distance calling solutions, networking, and maintenance and support solutions. Devana addresses the pain points of the SMB segment by providing premise-based as well as service-based solutions.

Enterprise Telephony

The Devana line of solutions, introduced in mid-2005, is oriented specifically towards end users in the SMB segment looking for IP solutions to address business needs. The Devana can support single and multi-location enterprises and supports up to 200 users per server. It also features Open Architecture Interfaces (OAI) to support the many existing standards in the industry namely, SIP, MGCP, 802.11b, Power over Ethernet, TAPI, and CT Connect.

One of the interesting aspects about the Devana is that, it is one of the very few, if not the only one, to use Compact Flash (CF) technology in its call processing units. This improves performance and durability since it eliminates the need for spinning disks and moving parts in the core system. Another unique advantage is that it supports between 25 to 110 IP endpoints.

In addition it allows users to retain up to 96 digital endpoints through optional expansion units. The Devana also feature WAN failover solutions that ensures that no disruption of service occurs in the event of a failure. In the event of a failure, unlike most of its competing products, the Devana is able to provide its user with the full-feature set as opposed to just a dial tone. In addition, Devana has a full complement of endpoints to support the telephony systems.

Messaging Applications

Devana addresses the messaging needs of the SMB segment with Enterprise Messaging, a scalable speech-enabled messaging and auto attendant application with integrated voice and unified messaging capabilities. The Enterprise Messaging solution is a unified messaging platform that allows the company to deploy voice messaging but easily upgrade to unified messaging capabilities. Through various message storage options that the solution allows, Devana provides a choice of integrated messaging or unified-storage messaging, thus providing the SMB segment with different messaging architectures, but at an affordable price point.

Although there are some independent messaging vendors that provide specific messaging solutions for the SMB segment, it is the integration with the infrastructure in addition to the price points and the services that makes Devana's portfolio very attractive.

The Solutions

The enterprise communication market is dominated by stalwarts such as Avaya, Cisco, Nortel, and Siemens and much of this has to do with a strong product portfolio and brand name recognition. These vendors account for much of the deployment in the Fortune 500 companies around the world.

However within the SMB space, these incumbent vendors are being challenged by smaller vendors that are nimble and whose products are architected to cater to that segment. They offer "one-stop shops" for all communication needs ranging from telephony to messaging, unified communication and also conferencing. There exist few successful complete communication infrastructure companies with a focus on research and development that is oriented towards addressing the needs, requirements, and pain points of the SMB segment.

Home