IP PBX Articles
Voice of new telephony calls on UK SMEs.
Charles Sykes PC International
(Computer Reseller News Via Thomson Dialog NewsEdge)The market for IP telephony
products among SMEs in the UK has undergone some radical changes over the past
few years. Smaller organisations have sought to emulate large corporates by deploying
cost-effective communications solutions designed with the IP future in mind.
In the past, this was a market targeted by BT, together with
other established telecoms vendors. These include Alcatel, Avaya, Siemens and
Nortel, plus data vendors such as Cisco and 3Com, all of which targeted scaled-down
versions of corporate solutions at smaller businesses. But growing demand for
telephony systems based on pure IP and hybrid analogue/IP PBXs has prompted the
emergence of fresh faces focused solely on SME requirements.
Matthew Ball, an analyst at research firm Canalys, which produces
a bi-annual report on EMEA sales of enterprise PBX equipment, said: "New
players such as Swyx (in Germany), Zultys (in the US) and SpliceCom (in the UK),
initially grew their business and became established in their home markets, but
they are now looking to international expansion. The UK represents one of their
biggest opportunities."
Hertfordshire-based SpliceCom was formed in 2001. It sells
a range of what it calls "affordable business telephony solutions"
to UK SMEs through the channel. Its Maximiser product range can scale
from eight to 5,000 analogue or IP extensions, and includes switches, gateways
and IP telephone handsets.
Figures from research firm MZA suggest that SpliceCom accounted
for 16 per cent of all UK pure IP telephony shipments in the second quarter of
2005. This is second only to Cisco which has a 50 per cent market share, and
ahead of Swyx, Mitel and 3Com.
Robin Hayman, director of product management at SpliceCom,
said that SpliceCom solutions compete more with traditional telephony companies
such as Nortel, 3Com, Siemens and Avaya, than Swyx or Zultys. He claimed the
latter do not offer SMEs the same scalability or address the requirements of
the same resellers.
"It (the SpliceCom solution) is a VAR-friendly IP telephone
system, but boxed in a way that makes it scalable. Rather than go with one telephony
system, customers can start with 100 to 200 extensions, then add others. It gives
resellers a way to grow their business," he said.
Swyx sells software-based IP telephony servers and gateways,
although it will add cards to support analogue BT handsets according to customer
requirements. The company set up its first UK office in March last year, and
believes that its software-only approach holds key advantages for SMEs.
Dave Smith, vice-president of marketing at Swyx, said: "The
benefit is that it is pure software, a bit like deploying Microsoft Office: just
buy the user licences, download the clients and it's there. SMEs don't have to
add hardware or bolt boxes to walls.
"A lot of our competitors have time-division multiplexing
(TDM) systems with IP attachments, but they don't allow real IP telephony. A
software-based solution allows users to login from anywhere on the network and
form a distributed backup solution. Users can't do that with hardware-based systems."
Zultys's product offering is similar in range and functionality
to that of SpliceCom, but the firm has claimed it can scale up to 10,000 ports
or telephone extensions. Its MX30, MX250 and MX1200 voice over IP (VoIP) devices
integrate PBX, voicemail server, switch, router, and internet gateway with applications
such as instant messaging, presence and voicemail management, supporting anything
from five to 1,200 users.
"Swyx is very much a PBX on a disk and is aimed at data
resellers. Zultys is coming from the US into the European Union, but I'm not
sure it has made any inroads into the traditional telephony reseller channel,"
Hayman said.
Whatever the merits of their respective solutions, the fact
that they are relatively new to market makes it very difficult for the likes
of Swyx, Zultys and SpliceCom to make any significant headway against the established
vendors so soon, according to analysts.
"Across all business sizes, their market share is in
the low single digits," said Matthias Machowinski, directing analyst for
enterprise voice and data at Infonetics Research, although he stressed that Zultys
does not release shipment information.
Tim Webb, general manager of Toshiba's business communications
division, which also targets hybrid and pure IP telephony equipment at SMEs,
agreed.
"A lot of niche players, such as Swyx, are coming into the telephony
arena, but in my view they are not taking a big market share at the moment," he
said.
BT is still very much a force to be reckoned with, selling
services combined with different manufacturers' hardware solutions through its
indirect channels.
Will Morey, managing director of distributor Crane's LG and
BT Networks Business, bundles IP telephony solutions from LG with WAN, leased
line, broadband and VPN services from BT. Other distributors and resellers are
involved in similar relationships with the carrier, whereby they build complete
customer packages from combinations of vendor telephony solutions and BT network
services, often with value-added applications thrown in. Crane offers other BT
telephony packages using Nortel equipment.
"Swyx and Zultys both offer soft PBXs while SpliceCom
is also quite application-centric in the way it operates. We work with larger
suppliers that have immense R&D resources and a strong brand. That's the
sort of solution SMEs are looking for," Morey said.
Ball agreed: "BT is still very strong. In the past few
years it established a local business unit that has given it the opportunity
to meet with SMEs face to face, rather than sending faxes or email."
Hayman agreed, although he claimed that BT is not as ubiquitous
as it once was. "We always see BT in this market, though not as much as
we did five or 10 years ago when it really was everywhere. BT now seems to be
concentrating more on the larger enterprise projects' and using equipment from
Cisco and Avaya, but not so much Nortel since it started selling through the
channel again," he said.
With the market for telephony solutions based on analogue
TDM technology in decline (see graph, page 31), makers of small key telephone
systems (see box, page 34) are rarely encountered. But companies such as Avaya,
which offers hybrid PBX solutions, together with Cisco and Mitel on the pure
IP front, are still very much in the fore.
"We do see BT in the market as well as Cisco, but find
Avaya to be the strongest competitor purely from a market saturation point of
view: everybody is selling Avaya," Smith said.
It might be expected that wherever possible, SMEs will opt
for the equipment that is least expensive. In this way they perhaps miss out
on the benefits of advanced telephony features and applications for simplified
functions that address current needs, rather than hoping for or predicting company
expansion in the future.
Machowinski believes that price is certainly an issue, especially
when larger equipment vendors offer deals based on multiple, scalable components,
rather than simplified 'one box' packages.
"Pricing is certainly attractive. Swyx allows users to
purchase just the software for example, put it on the server of choice and pick
the SIP phones they like. Zultys also offers a comprehensive set of data features,
such as Ethernet, VPN and firewall, which can be useful for 'office in a box'
scenarios, such as new locations with no existing infrastructure" he said.
Ball agreed that 'office in a box' solutions can press the
right buttons in certain cases, but he pointed out that it is the product innovation
combined with closer customer and reseller relations, rather than lower costs,
which are more likely to win the business for smaller vendors.
"I am not 100 per cent sure the issue is about selling
at less cost. Where vendors win is where they offer something new to their channel
partners, such as better customer management or free demonstration kits that
resellers would have to pay other vendors for," Ball said.
While they may not want advanced telephony features, SME customers
do at least want telephony solutions that will not be outmoded in five years,
according to Rebecca Turner, representative at distributor Chess, which recently
became a Mitel Gold partner.
She also believes that many companies avoid pure IP solutions
because they cannot afford the expense of upgrading their data networks to reliably
carry voice traffic, or have the necessary in-house expertise to manage IP systems.
"Customers want something that is future proof and 21st
Century Network compliant. Chess sells IP-enabled systems, but often people can't
afford a complete network overhaul that pure IP solutions require,"
Turner said.
"Not every customer wants to transition to IP telephony
because it involves lots of other accumulative costs such as upgrading the network.
The smaller the company, the less likely it is to have a dedicated IP person,
so the customer will probably rely on service providers or local resellers to
upgrade it."
Concentrating too much on price and total cost of ownership
arguments can be a double-edged sword, according to Webb. A recent survey of
205 SMEs entitled Connecting with SMEs; the IP telephony Opportunity, commissioned
by Toshiba's Business Communications Division, indicated that resellers still
tend to focus on the cost advantages of IP telephony at the expense of other
advantages such as new applications, productivity and efficiency improvements.
"The channel is always talking about price and cost:
that's the number one priority. I'm not dismissing that, but it is up to vendors
to educate the channel on how best to sell IP telephony equipment. The fact that
half of customers considering IP telephony don't take it up, or take a more simple
solution highlights the lack of understanding and the amount of confusion out
there," Webb said.
Resellers contend that any price reduction vendors can pass
on is always a good thing. But they agree that more training on the other benefits
of IP telephony would also be welcome, alongside better facilities to offer product
demonstrations to prospective SME customers.
"Vendors can help by reducing the cost of the kit, and
offering additional support and demonstration centres. Some vendors have more
of these than others, and it is useful to have both a northern and a southern
facility, rather than just one or the other," Turner said.
Webb concluded: "The other thing that SMEs want is what
the large enterprise market has: consultancy. They want the channel to understand
their business processes, but the problem is that so many resellers want to get
in quickly and get out quickly."
CONTACT
Knowall IT Ltd, 0870 225 0377, www.knowall.net
HYBRID SALES CONTINUE TO DOMINATE
- Like larger enterprise customers, SMEs are not keen to scrap
the considerable investments they have made in analogue telephone systems over
the past 20 years.
- Unless they are moving site or opening new offices, few
organisations are opting to deploy pure IP telephony systems, preferring hybrid
solutions that marry some of the benefits of IP to the legacy analogue telephone
equipment already installed.
- Figures from research company Infonetics (see graph, left)
suggest that sales revenues for hybrid (analogue/IP) PBXs in the third quarter
of 2005 were 12 per cent up on the previous quarter.
IN-STAT RESEARCH
A recent report by In-Stat found the following:
- 73 per cent of all voice over (VoIP) subscribers worldwide
have migrated to VoIP without making a conscious buying decision to adopt the
new technology.
- In North America and Canada, cable operators are aggressively
expanding their VoIP footprint, but are marketing VoIP as a standard telephone
service.
- In Asia, South Korea will have the highest VoIP growth rate,
followed by Hong Kong and Singapore.
- In Europe, broadband ISPs, such as Free Telecom (France)
and FastWeb (Italy) are leading the way with innovative consumer triple-play
service bundles.
- "Competition in broadband access services is the key
driving force behind VoIP market development," said Keith Nissen, In-Stat
analyst. "In addition, multiple waves of new entrants, ranging from broadband
ISPs and cable multiple system operators, to Google and eBay, will play significant
roles."
KEY TELEPHONE SYSTEM
A key telephone system (KTS) is aimed at smaller businesses
and features specialised telephones that allow one person to call one or more
people within the same organisation simply by pressing a button, rather than
dialling a number.
KTSs are similar to analogue PBXs in functionality, but they
use the telephone company's (such as BT's) switching equipment to make external
calls, rather than the central control unit within a PBX at the company's site.
Because all the lines are directly connected to the telephone company equipment,
key systems do not require the user to dial a number when dialling on the public
switched telephone network.
KTSs are generally cheaper than PBX systems because they require
less equipment, but they rarely support more than 100 to 150 users.
SUMMARY
- The UK SME IP telephony market has recently undergone radical
changes with new vendors spotting a gap in the market for simplified, lower cost
all-in-one solutions.
- New players such as SpliceCom, Swyx and Zultys, as well
as established firms such as Mitel, are challenging BT, Cisco, Avaya, Alcatel
and others who have scaled down their corporate solutions for the SME market.
- BT still has a strong presence in the SME telephony market
through bundled packages sold by value added distributors such as Crane.
- The least cost option is not always the best option, say
some experts, with product innovation, simplicity and close vendor and reseller
relationships often winning the day.
- Vendors say resellers often focus too much on low-price
equipment and total cost of ownership at the expense of other benefits,
which often leads to customers dropping out of sales.
How
to Profit from IP
Telephony 
