As the VoIP market continues to grow and mature, something interesting is happening. Below the radar from the large carrier services, the SIP trunking providers, and the Cable triple play - the Small Medium Business (SMB) market for hosted VoIP services is heating up! In fact, it is growing faster than all other VoIP based services. The SMB market is opening up an excellent growth opportunity for competitive service providers of all types.
That's right - small and medium businesses are seeing the benefits of VoIP services. They want the productivity improvements and find the cost benefits attractive in this uncertain economy. VoIP based services for businesses are the fastest growing part of the VoIP market with hosted VoIP services growing at a rate of over 28% a year according to Frost and Sullivan. Not only is this a fast growing market, it consists almost entirely of SMBs. In 2009 over 90% of hosted deployments were less than 500 seats.
What makes this good news for competitive service providers? This is a fragmented market without substantial competition from the large dominant players. The large carriers and service providers are focused on their profitable large enterprise accounts and the healthy margins they are making on Centrex services. The established incumbent players poorly serve SMBs because they do not fit into their existing business model, but SMBs can be well served by competitive providers dedicated to this market and its unique needs.
Also, as the economy recovers, it will recover for SMBs first - they will be the engine of future growth. These are the companies who best adapt and find new opportunity after a downturn. This is where we can expect to see both new companies and the early new growth.