33 reasons why VoIP beats PSTN hands down for the SMBs

Voiceover Internet Protocol is currently midway through running the typical technological adoption process gamut. VoIP has gone from curiosity to oft-employed in the business world, and is well on the way to becoming a necessity like the internet medium itself. Getting VoIP technology installed in the small business is truly merely a question of time. No longer is “Should I replace PSTN with VOIP?” the issue, but rather “When should I…?” Further, the query becomes “Why doesn’t your small business have VoIP already?” Further spurring on to implement this soon-necessary technology in your small business follows.

1. Savings, of course

Always the top selling point: Price. And VoIP provides intra- and international rates at “as little as a penny a minute.” A study undertaken by advisory firm Forrester Research showed that businesses installing VoIP saved an average of 20 percent against conventional PSTN rates.

2. Number portability, especially if you’re in Botswana...

Like the overwhelming majority, Robert Accetura enumerates “portability” as among an important advantage for VoIP service. It is well-known and oft-written that, with an IP phone, any broadband connection becomes a phone line with the low VoIP rates. Number portability allows you  to make your calls cheaply from anywhere in the world, you can use your Chicago-based phone service to make a call from Botswana paying Chicago call rates. Voip2Save was one of the early movers in offering its customers number portability way back in 2004.

3. Smaller can be better

While VoIP at present carries something of a disadvantage in terms of initial capital investment – rates for installing a VoIP network can cost 30 percent more – a small company can have an advantage if a multiple-location business. Says SKT Business Communications Solutions chief information officer Damon Martin: "A small credit union," Martin says, "with just 20 or 30 phones but spread out across several sites, will almost always find IP telephony less expensive."

4. And really small is really good

Once we’re considering a literal mom-and-pop shop, the costs to set a VoIP system up can come out of petty cash. Blogger Owen Linderholm says a business can be outfitted for $50 a month for a single line (which, because it’s a VoIP system, can have multiple traffic streams active).

5. Message from VoIP: I ♥ small business

Founder of GigaOmniMedia, Inc. Om Malik was recently moved to pen a post ntitled “VoIP Loves Small Business” which reveals some surprising numbers about small- and medium-sized business owners’ telecom experiences. Reportedly SMBs combined spent almost half the amount (approximately $2.1 billion!) their large-scale corporate brethren did, yet remain “most dissatisfied with their phone service, making them ideal customers from a burgeoning ranks of VoIP service providers.”

6. It’s a small world after all

Just because you’re running a small business doesn’t mean you can’t get in on the “Sell To China” bandwagon; with VoIP the price to call Peking is almost the same as Peoria. Sam Bhagwat dished out the following figures on from two typical VoIP providers : anywhere in the United States, 1 cent a minute; calls to the European Union and China for less than 2 cents a minute; and to Japan for “only slightly more.” Even expensive international calls become cheaper: Calling India with, say, Skype is 12.5 cents per minute against, say, AT&T’s 90.

7. VoIP: You can MP3 it

Now here’s an interesting bit from a serious authority, Dave Taylor. Taylor, who “has been involved with the internet since 1980,” recently went to work with some hands-on experimentation with VoIP calling, i.e. he called some friends and sent some files. Though the results in a traditionally weak area for VoIP, namely call quality, were excellent, more important was that Taylor found that his voice mail system could send email with “the actual voice message as an MP3 attachment,” which “by itself might well be reason enough to use a VoIP system for your business, particularly if you find yourself incessantly checking your voice messages.” (Sound familiar?)

8. You can DIY

Reason #4 discusses why small is good. You want another? You can set up the system yourself. You want to know how? From the UCIrvine brain trust: “…Alternately, you can take a trip to Best Buy, pick up a Linksys Vonage Phone Adapter bring it home and plug it into your network, add your standard phone, sign up for their service, and you are ready to go. The phone adapter is about $60. Vonage has a 500 minutes plan for $14.99 a month which lets you make 500 minutes of local and long-distance calls without additional charges and a $24.99 plan which is unlimited.” High-tech that you can install and understand? Unbelievable.

9. VoIP strengthens the economy

No, really. It’s official. Former FCC chairman and broadband advocate Michael K. Powell reported to Senator John Wyden on the Senate’s telecommunications committee that “U.S. businesses, small and large alike, are increasingly using these internet services to increase productivity and contribute to our Nation’s economic growth. In short, the creative forces that have fueled the internet’s growth for the last decade are doing the very thing government regulators have tried to accomplish since the 1996 Telecommunications Act – bring competitive, cheaper and more innovative voice services to the public.”

10. VoIP + blog = the cheapest CRM out there

Blogging has got to be the biggest fad in the history of the internet, potentially going beyond idle fun into actual media power and as a tool for business. Indeed, short of word-of-mouth, blogging has been said to be the single cheapest form of advertising available. So when LiveJournal went live with VoIP last month, with SIPphone’s “Gizmo Project for LJ Talk” software, it allowed users to make PC-to-PC, landline and mobile calls, initiate conference calls and send instant messages using LiveJournal account information. And gave small budgets a boost, with a two-bird stone of advertising and customer service.

11. Read my lips – no taxes

Over at the federal government-hosted (yet strangely communist-sounding) “The People’s Counsel’s Corner,” it is happily reported that “Currently, VoIP providers do not have to pay taxes and regulatory fees that standard phone service providers have to pay. Therefore, these costs are not included on your VoIP bill,” a notable win for small businesses. Unless you’d rather pay taxes.

12. The future is unavoidable…

File this reason under “The times they are a’ changin’.” Blogger Mike Schuda leading a blog entry with “It seems like technology is headed for a massive telephone change over,” also touts that “There are more new features with VoIP because of the lack of an International Telecommunications Union. VoIP is still very much an open market for developers, so the technology is constantly being improved.” In other words, there is still opportunity for small business to get in on the ground floor of what will soon be seen as a necessary (and therefore incrementally more expensive) business.

13. …but bright in the short-term

As Counterpath CEO Donovan Jones recently told TMC editor Rich Tehrani, not only will VoIP “open up the way people communicate” but you will “get to select exactly how you prefer to communicate.” Right now in VoIP, it’s a buyer’s market at the mercy of the business customer’s demands: “It’s really going to be about the flexibility that’s afforded by the technology and then by what the user really wants.” Small business has the upper hand at present.

14. Just in case you want fewer gadgets…

If you’re one of those that is not easily seduced by every blipping, beeping toy, VoIP can simplify your life. Proclaims a blogger at TMCNet.com, “for anyone going mobile, the [fewer] gadgets the better.” The piece detailed the release of a combination cell phone / MP3 playing solution just released by QuickOffice.

15. Your president supports VoIP…

The federal government is moving ahead with President George W. Bush’s call to make affordable broadband access available to all Americans by the end of 2007. The better news is that the VON Coalition is working to increase the drive to that goal, believing that the feds should “remove barriers to innovation that could stifle VoIP-driven broadband investment.”

16. …as does the Governator

In the midst of his recent reelection campaign, California governor Arnold Schwarzenegger recently took time to sign an executive order to build broadband networks in all state government agencies. Still think VoIP is not advantageous? Are you going to argue about it with him?

17. And here’s why

As to why Schwarzenegger signed the order, take a look at some of the numbers a California state performance review for 2005 turned up through the application of VoIP technology: 15 to 20 percent recovered from billing errors; 15 to 20 percent in additional savings generated by maximizing use of discount rate plans, network optimization and more efficient use of technologies; and a cost saving per user of up to $40 per month per converted line. The review went on to state that the California Environmental Protection Agency realized savings of 45 percent over PSTN with VoIP.

18. 911 a joke?

One of the biggest knocks on VoIP is the 911 question. When using VoIP, since the data is not going through traditional PSTN networking, emergency 911 services cannot immediately locate you. However, the federal government saw to it that VoIP systems be capable of dialing 911 in regular fashion as November 2005. Various VoIP companies employ various methods of supplying the service, but rest assured that VoIP can take care of you in an emergency now.

19. Simplicity in billing

VoIP specialist and Quick Start Voip () publisher Leanne Tremblay, in detailing the advantages of VoIP gave the example of “Jen,” a “successful home-based working mom.” Thanks to VoIP, Jen was able to buy and sell her wares “all over North America and Europe” from Denver for one price. Plus, she even got a dedicated fax number in the plan.

20. Satisfaction not quite guaranteed, but probable

An Infotech finding which stated that 80 percent of businesses that use VoIP phones report that it has met or exceeded their expectations. Similar findings reported by Level 3 Communications which states that those who have shifted to VoIP are pleased with their decision. The study reported that 67% of their respondents were aware of VoIP and 55% were familiar with the technology. TMCNet carried a piece in August about a study conducted by Minacom which gave more marks to VoIP than PSTN regarding sound quality and faster connection.

21. Got Microsoft?

You’ll get VoIP As a small business owner, it may behoove you to look into a VoIP system now, for Microsoft is getting into the game. Unless you trust in advance that VoIP system the big company may well be installing into Windows unseen, you should exercise freedom of choice and start looking.

22. How about an in-house VoIP system?

Yep, you can do it. In addition to potential the “savings of up to 90 percent over regular long distance and other telephone services [that] can be recognized,” the folks at My Telecom Store encourage small business to check out the possibilities of VoIP in an internal business network: “As a matter of fact, many businesses have used it successfully for exactly that purpose, in addition to using it for external business contacts.”

23. Your business partners probably use VoIP

According to the Harvard Business Review, in 2005, “10 percent of international phone traffic now travels over the internet using voice over internet protocol.” Since most VoIP providers offer free calls to those dialing a number with the same VoIP service, this statistic represents further potential savings for the business customer.

24. Telecommuting made easier

One recent study showed that two-thirds of executives surveyed stated at least some of their staff work from home regularly, a substantial increase from the same survey conducted a year earlier.” The same survey saw 81 percent of executives wanting to give telecommuters “full access to the corporate network.” Employing telecommuting employees already saves the business money; VoIP for these workers can shave more. (P.S. “The 2004 AT&T/Economist Intelligence Unit survey reveals that, in the case of 46 percent of companies, broadband access is now installed in the homes of half or more of the workforce, up from just 27 percent in 2003. Moreover, this proportion is set to leap to 70 percent in 2006.”)

25. The most popular way to transmit data

Check out some of these numbers collected by the IT department at the State University of New York. These are growth rates of data and, more significantly, VoIP popularity. Says the survey: “Data now accounts for over 50 percent of traffic.” The growth of internet use is still nearly exponential today.

26. Watch out for the low debt ceiling!

VoIP can help with the hair-pulling small-business question of what the federal government refers to as “capex” (or “money spent to acquire or upgrade physical assets such as buildings and machinery”). Naturally, the small business owner’s (quite achievable) goal is to keep this right at zero or so. According to a Cox Communications white paper, “VoIP potentially offers a capex advantage of almost 40 percent per customer. … This significant cost advantage can largely be attributed to the lower cost of the MTA (media terminal adaptors) versus the NIU. Also VoIP does not require the equivalent of a dedicated Headend Interface Terminal (HIT). What they’re trying to say is “You need less stuff” and “it’s cheaper.”

27. Choose VoIP and you’ll save on PSTN, too

Thanks to extended VoIP services, the Bells have been forced to offer bundled local and long-distance service. In Senate testimony in a “telecommunications policy review,” an AT&T spokesman said that “Bundled services are often available for a flat ‘all you can eat’ fee per month, rather than traditional per-minute charges.” Though these land-line prices are still higher.

28. Uncle Sam says “I want you” (to save)

Even Uncle Sam has found ways small businesses can save with VoIP. A State Department report from 2005 stated that “VoIP enhances revenue by bringing in new revenue sources, even where there is a drop in traditional revenue sources.” The feds also thought the status of the technology itself in great shape, noting “New services, such as call transit service through VoIP gateways, unified messaging services, IP virtual private networks for businesses, and VoIP clearing house services for ISPs.”

29. VoIP can save your business?

That’s what one person’s tiny-business cautionary tale claims over at VoIP Now. The author cites long-distance bills with an editor as ultimately terminal for his independent press publication. “I can’t help thinking,” he muses, “that had VoIP been available back then, my magazine might have survived…” Don’t, as they say, let this happen to you.

30. VoIP saves business, creates “Big Business Opportunity”

Always dreamed of owning a business? Not only can you use VoIP, you can sell it. And Kazil Communications will help. Kazil, which is “not just a Telecommunication Company but a Telecommunication Company that will ROCK and lead the Telecommunication Market” offers incredibly low rates and business opportunities. Why not? Then, there are offerings from Gizmo Project, Trillian, and Gaim which can help you make substantial savings. Gaim is from the Sourceforge stable and is described as "a multi-protocol instant messaging (IM) client for Linux, BSD, MacOS X, and Windows. It is compatible with AIM and ICQ (Oscar protocol), MSN Messenger, Yahoo!, IRC, Jabber, Gadu-Gadu, SILC, Novell GroupWise Messenger, Lotus Sametime, and Zephyr networks."

31. VoIP: The cheapest “operations enhancer” out there

Just ask Avaya CEO Don Peterson, who recently came to the conclusion that “VoIP is not just a ‘cost-reduction case’.” Businesses can now look upon VoIP as an “operations enhancer,” says Peterson.

32. Yeah, but I hate the goofy headsets…

Check this out: As VoIP technology increases, so the anchoring weight of the PC decreases. The “Digital Life” blog espouses certain VoSKY products, VoSKY being just one firm helping you detach the headset from the VoIP.

33. It’s perfect

Have you ever seen this in any study of any sort? Forrester Research once reported that “100 percent of today’s adopters are happy with VoIP.” Now, the study may be a bit old and there may be a margin of error, but it says here that that satisfaction rate is pretty hard to beat.

Comments

[Mohammed Jubaer Arif]

Nice list. You pointed out it right! However, I would like to hear about your thought on the revenue of PSTN and VoIP provider. Can a VoIP service provider earn more money than a PSTN provider? I believe the answer should be yes, as with VoIP there will be more people using telephone.

What do you think?

[bob]

yeah but what about faxing? i have to use a fax machine for my small business...

[Andrew]

What about the cooler phones? I'm with OneConnect(dot ca) and my SOHO business has a way snazzier phones that I could use with a PSTN. Instant messaging on the phone, you can't beat it!

[willocat]

Using VoIP's with the Vonage adapters adds a convenience of do-it-yourself to the technology that will only help to mainstream it. It's giving the consumer the power over the technology, and their choice of technologies. And with the allure of no taxes or hidden charges, VoIP's are sure to catch on in. It's just a matter of awareness. People can't buy what's not marketed to them.