It has long been accepted that SMBs have adopted virtualization technologies or cloud computing at a faster rate than enterprises. It is for that reason that most hosted communications companies focus on SMBs as their target customer base. A recent study released by CompaniesandMarkets.com forecasts the hosted Unified Communications (UC) market will grow near 33% CAGR by 2017. However, this growth pales in the face of the forecast for small business spending on IP Telephony. That spending is estimated to grow 83% this year alone. It is worth noting that the majority of Broadvox’s IP telephony customers are SMBs. It is also the same for our hosted UC customers, most are SMBs. The factors supporting this adoption of IP telephony and hosted offerings lie much in how an SMB owner approaches technology and business operations.

A small business owner is mostly concerned about operations improvement. An SMB sees real value in avoiding the purchase of servers and software until absolutely needed. Additionally, most SMBs use cloud services for customer database management, sales tracking, accounting, payroll, email and other critical business functions. Therefore, adding Unified Communications as a Service (UCaaS) is not a difficult decision. As I posited during the recent Channel Partners show in Chicago it is more a question of how we introduce the value proposition of the service to that small business owner that determines the speed with which the technology adoption or sale takes place. A small business wants to look like a larger business and that is accomplished by focusing on Business Operations improvement. Not surprising but the most desired and used feature of a hosted communications solution is “Music on Hold”. The major elements as related to UCaaS are as follows:

• Conferencing (mostly audio)
• Integrated communications for mobile employees
• Integrated applications and features
• Ease of use
• Cost savings
• Productivity Improvements
• Reliable Service
• Responsiveness

While it is true that the adoption of virtualization technology is growing amongst all business, please note that while 90% of enterprises use the technology in some form, it represents only around 5% of their IT services or applications. Enterprises continue to seek assurances that hosted technologies are secure, can be integrated into existing business process and will track the future needs of the enterprise. Premises based solutions will continue to be the most desired option for enterprises for some years to come.

Therefore, the message to most VARs and agents continues to be, “Target the SMBs”. They have already internalized the value of cloud computing. They just need to know you can provide a hosted UC solution that is customized to their requirements and budget.