Study: Multi-Site SMBs Drive VOIP

Multi-site SMBs more likely to try VOIP, says Deloitte survey

October 13, 2006

3 Min Read

SAN JOSE, Calif. -- Small- and medium-sized businesses (SMB) are underserved, with multi-site SMBs needing choices appropriate to their more IP-centric communications spending, according to a survey of more than 100 executives at small- and medium-sized businesses in Consumer Business, Energy, Financial Services, Healthcare, Life Sciences, Manufacturing, Public Sector, Real Estate, and Telecom/Media/High Tech. The survey was conducted by Deloitte's Technology, Media & Telecommunications practice.

"SMBs are essentially being left out in the cold, despite their relatively high communications spending; their unmet needs make them a potentially very attractive market sector for VoIP services," said Jan Woodcock, principal, Deloitte Consulting LLP. According to survey respondents, there is a lack of appropriately scaled, affordable wireline service products for the SMB marketplace. Woodcock added, "Many SMBs are too large to be satisfied with a T1 line and too small to afford or to manage a DS3 connection."

Among the survey's key findings:

  • SMBs need tailored, scalable solutions that package voice, data, and managed services at a competitive price.

    Pricing and the lack of service and tailored solutions are the key disadvantages faced by SMBs. Because SMBs don't generate the same volume as large enterprises, it's difficult for them to negotiate better rates.

    Due to their size, they are also generally interested in tailored solutions that package voice, data, and managed services. Finally, they need services that can be scaled to their needs.

  • Multi-site SMBs are more IP centric, with more IP spend

    Deloitte's survey looked at wireline spending by company size and found that a company with a single site that spends $100 on voice spends an additional $27 on data. However, when the number of sites increases to between two and five, a company that spends $100 on voice spends $114 on data. The data spending jumps to $140 for those with more than five locations. Indeed, monthly spending per employee increases 40 percent for companies with two or more locations.

  • As the number of sites increases, SMBs are more likely to turn to VoIP.

    According to the survey, only 18 percent of single-site companies use VoIP, compared with more than 70 percent of multi-site companies that use the technology to some degree. Approximately 30 percent of multi- site companies use both VoIP and MPLS (multi-protocol label switching) or other VPN (virtual private network) technologies, reflecting the SMB market's sophistication with IP-based services.

  • SMBs are less concerned with brand, more interested in customer service, product reliability, bundled offers, and complete service set.

    SMBs tend to act more on recommendations by trusted sources than focusing on brands. While pricing is obviously important to the SMB, so are bundled offers and a complete service set. Product reliability and good customer service are also key decision points.

  • Tech, Media and Telecom SMBs pay more for communication services than do life sciences and healthcare businesses.

    From an SMB industry standpoint, technology, media, and telecommunications companies, along with consumer businesses, spend the most per employee on communications, while life sciences and healthcare business spend the least.

Deloitte Development LLC

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