I recently had the opportunity to ask Sandra Gault, EVP of Marketing at the rapidly expanding communications product company Allworx about the evolution of IP communications in the SMB space, VoIP and the direction her company is taking.
Allworx provides businesses with all the mission-critical communications support in a single system. They combine PBX and Key phone functionality with PC network services, along with VoIP, secured Internet access, remote office, group collaboration tools, and messaging software such as email, voicemail, unified messaging, follow-me calling, and group calendaring.
To learn more about the company, read this article
published on TMCnet
from earlier this year. Be sure to read this interview to the end… The answer to the final question is pretty surprising.
RT: Please outline your new corporate initiatives.
SG: Our initiatives continue to enable the 3.5 million small to medium-sized (SMBs) businesses in the U.S. to transition risk-free and affordably to the benefits of VoIP, replacing the aging installed base of TDM key telephone systems that are incompatible with VoIP.
RT: How is IP communications changing your company’s strategy?
SG: In the burgeoning SMB market transitioning to VoIP, Allworx has developed a strategy that responds to the top three concerns of small businesses in the world of VoIP: price, features, and reliability. The Allworx product line and sale channel were engineered to ensure answers to these concerns were the best in the market.
Allworx has taken the very best of VoIP features (multi-site, remote users, presence management, cell phone integration, unified messaging) and combined it with the traditional TDM key system features (true line appearances, DSS/BLF) that are critical to small businesses today. We priced our solution to match that of traditional key systems because SMBs shouldn’t have to pay a premium in equipment to move to VoIP. Finally, by selling exclusively through trained and certified local resellers and by building an “appliance-like” server, we’ve ensured that Allworx system installations have the highest success rate in the VoIP industry.
This strategy — focusing on SMB features and high reliability all without paying a premium in price — allows Allworx to address all “professional” small businesses, not just the VoIP “early adopter” market segment.
RT: How has SIP changed communications?
SG: In our SMB market, in addition to the savings through VoIP (e.g., leveraging SIP trunks and multi-site communications) the biggest impact comes through the flexibility and mobility of what VoIP offers with features such as presence management, unified messaging, remote users, and mobile convergence. With SIP communications, SMB’s can be constantly and seamlessly in touch with their customers and vendors, both in or out of the office with no visible difference.
SIP has also provided us the platform to build application bundles that further enhance our core offering such as real-time disaster recovery, data backup services, and LAN/WAN management services.
RT: What is the biggest request coming from your customer base?
SG: Features, minimal disruption during installation, and reliability are the key requests. When SMB’s are looking to adopt VoIP, they are demanding traditional Key System functions such as line appearances and DSS/BLF. They’ve integrated these features into their daily operation and become highly dissatisfied if forced into “PBX-equivalent” features such as parking orbits, bridged appearances, or computer based DSS/BLF tools. These are inherently more complicated and cause significant disruption when training end users used to working with key systems over a period of decades. Allworx provides the “best of” from both worlds — VoIP and key systems.
Reliability comes in part through the ability to simultaneously support TDM/PSTN trunks as well as the newer VoIP lines, allowing transparent fall-back and providing their expected “five 9’s” reliability. In many cases, Allworx customers install their systems as direct replacements for their TDM key systems, keeping the same PSTN voice service in place with the intent to transition to VoIP gradually over time. The other main driver to reliability is the five years of experience and 40,000 end-user base built up by Allworx. Our IP-PBX/KTS systems come up almost out of the box, minimizing disruption, and are very robust to any LAN/WAN issues that plague other installations. There’s minimal configuration, minimal interoperability issues with other pieces of equipment in the SMB’s LAN, and a host of diagnostic tools for the reseller.
RT: How are you answering their demands?
SG: Allworx has made these barriers into winning differentiators for us.
RT: What do you think the future of the market is?
SG: Today, true IP PBX sales into professional small business (less than 60 employees) represent less than five percent of all sales. Pure TDM phone systems represent about 60 percent and TDM with IP gateways (or IP enabled) represent 35 percent of all sales. We have not seen or experience hosted IP PBX as playing a significant role in this market. Hosted IP PBX represents less than one percent to two percent of the overall sales.
In the future, we expect to see IP PBX vendors doubling in sale every year for the next five to 10 years. In 2008, we anticipate this increase in market share for IP PBX to take place due to the wide availability of SIP trunking and implementations of more mature QoS tools for SMB LAN/WANs.
RT: What do you think of Google and Apple entering the telecom market?
SG: We’re excited about their entrance because they bring awareness and additional applications in the world of VoIP to help drive faster adoption rates. For example, the WiFi offerings (e.g., Apple iPhone) will drive the cell phone integration application.
RT: How about Microsoft?
SG: Microsoft and OCS server will play a strong roll in mid to large-sized companies (over 60 employees). However, adoption rates of even Microsoft’s Exchange Server into the five to 60 employees small business market is relatively low — most small businesses can’t afford the complexity and ongoing maintenance costs. Microsoft itself predicts that the OCS server will take another 3 years to roll out in a standalone configuration. We believe that SMBs will also require a fair amount of time to become comfortable with having their phone system running on a Windows PC. Further, this market will typically not replace their phone systems at the rate of replacing their PCs.
We believe that MS solutions such as Office & Outlook will continue to play a primary role in the integration of communications with the company’s data and operations (e.g. TAPI integration with IP PBX systems). There is significant value in IP PBX vendors such as ourselves integrating very tightly with Microsoft Office and Outlook tools, building upon the initial start that TAPI has given us.
RT: How will communications evolve over the next five years?
SG: Wireless communications will become the common format and it will be tightly integrated with both phone and network systems with the same reliability of wired. The wireless communications will drive the implementation of applications such as remote meeting using video, voice and data. A user’s cell phone will become their office and home phone and users will have a single phone number that they will transfer from job to job. In addition, their wireless communications both at the office and home will change the dynamics of our current work environment. The “virtual” employee of today will be the norm in the future and devices or systems that leverage voice-data-video will become as common place as e-mail is today. In fact, we’ll think of e-mail as the “old” way of communicating in the future.
Beyond wireless, LAN products will show strong growth in the SMB market place because many of these companies are exceeding their current capabilities. With multiple forms of communications (SIP, video, data) converging and other complex applications will drive the need for monitoring and managing (e.g., QoS, traffic shaping, VPN) devices or solutions.
RT: What sorts of things will we be hearing about during your presentation at ITEXPO?
SG: Today’s IP PBX systems are missing the market with small to medium-sized businesses in pricing, features and reliability. Allworx will teach you the (reseller) how to address these barriers and expand your business with VoIP and other opportunities (e.g., reoccurring revenue streams). This will be presented as a practical approach to building your base and building your business. So, if you have trouble selling VoIP, Allworx has found the solution and wants to share this with you.
RT: Why is your presentation a “Can’t Miss?”
SG: This is not a sales pitch on a specific product, but rather a practical and proven way for resellers to sell VoIP and expand their business.
RT: What do you want the industry to know about your company?
SG: With nearly 4,000 systems installed and 40,000 plus users supported by a network of over 680 certified resellers, Allworx has successfully broken through the early adopter market segment and is considered the next generation phone system for all professional small to medium sized businesses.
RT: Please make one surprising prediction we will see in 5 years.
SG: Hosted IP PBX solutions will be a “bust”. The end user economics, lack of flexibility, poor feature sets, and the inability of the network service providers to provide true customer technical support for the entire SMB LAN/WAN infrastructure in a scalable and profitable manner will result in slow growth of this highly publicized product category in the 10 to 100 user small business market.