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Broadcast Recap: Hosted VoIP and Small Business, A True Growth Area

August 20, 2010
at 12:00 pm PST

For those of you who turned in yesterday to watch the live Ustream broadcast of our chat with Andrew Sage, VP of Small Business Sales, and Ken Rokoff, VP of Business Development at partner BroadSoft, we thoroughly apologize:

We had a technical glitch and we were unable to go through with the broadcast as scheduled. However, we were able to run a broadcast this morning and you can find a replay of it below as well as on our Ustream page.

Our chat was geared toward Small Business value-added reseller partners and focused on Hosted VoIP Solutions. We discussed trends we are seeing in hosted VOIP solutions for Small Businesses, new capabilities that are being developed, and the opportunity they present for VARs.

The conversation covered lots of ground, and here’s some of what we talked about:

Andrew began the discussion by talking about ways Cisco is helping the reseller Channel with Hosted VoIP Solutions for Small Businesses in the sub-100 market. He noted that partners can expand their offerings and customer base by partnering with a provider of hosted voice solutions. Ken then explained that BroadSoft is the global leader in hosted voice platforms for service providers, with 400 customers in 61 countries, and has been working with Cisco for over 10 years.

The conversation then turned to cloud computing—and the fact that 65% of small business customers are talking about moving some of their IT into the cloud. Hosted voice will be a US$1 billion opportunity by 2015, noted Andrew. But he pointed out that can’t happen without VARs getting engaged and making money in this space.

On the SMB front, Ken noted that BroadSoft is seeing IT managers becoming more comfortable using the cloud infrastructure. The growth of SaaS applications, like WebEx, is pushing this trend. He also remarked that in 2009, hosted voice communication grew by 22%. Customers are looking for a predictable monthly bill that includes enterprise-level features, such as mobility integration and unified messaging, all of which help a small business without involving the complexity of a premise-based solution.

On the service provider front, Ken said that 65% of all BroadSoft service providers rely on VARs who can focus on network upgrades, Cisco equipment sales, and network assessments. That statistic was intriguing to Andrew, who noted that it shows that VARs can reach a new tier of customers they couldn’t have addressed in the past.

The business model that Ken talked about enables up-front opportunities for VARs, as well as a recurring revenue stream. That’s the key—whether it’s managed services or cloud, building a business model around a recurring revenue stream is really important. As a reseller, you’ll be able to take your customers a set of features and functions at a solid price point, while also being a trusted advisor.

Ken noted when using BroadWorks Anywhere, a service on its BroadWorks platform, subscribers can create a profile to attach all their wireless devices and create true mobility for small businesses, making and receiving calls with just one phone number.

Call center services, an enterprise-level capability, are also available through the BroadWorks platform. Unified communications—the ability to integrate voice, with instant messaging, and other capabilities—is now also available to small businesses.

So what are the benefits of working with Cisco in this environment?

Andrew noted that Cisco has a fantastic line of SIP-enabled CPE that allows VARs to deliver HD voice, for example. Cisco also can deliver all the pieces required to put together an integrated solution for customers, whether wireless LAN, routing, switching, and so on.

But can hosted voice enable VARs to produce a lot of revenue? Ken noted that there are dozens of technologies, such as call reports, that VARs can take advantage of, and act in a way to advice small businesses to integrate additional services with hosted voice. Ken discussed another service that can only be made available to small businesses through VARs, that can look at quality of experience and assessment monitoring, whether wiring and switching problems, and the VAR can use this technology to make recommendations to small businesses.

For those interested in getting engaged, Andrew listed a few providers who have built out some of these services and who want to bring those services to market through the channel: NGT, just acquired by Comcast (US), HipCom (UK), MegaPath/Speakeasy (MSCP Partner), and Telstra, Engin (AU). For more on this opportunity, visit the Hosted Small Business site, or send an email to Jim Ortbals, who can help out.

Andrew and Ken then took questions that were submitted before and during the broadcast.

Are Cisco and BroadSoft competing?
Andrew said that in the sub-100 space, partnership with service providers who work with BroadSoft helps Cisco’s partners and hosted small business solutions to penetrate a segment of the market Cisco couldn’t penetrate before, with a win for everyone.

Small businesses aren’t buying now, what can a small business do now to get started?
Ken said that service providers are offering economical, feature-rich packages that can be attractive to small businesses.

How can VARs make money in a model where there is no on-premise call server?
Ken said that there are switches, phones and other components, allowing the VAR to get the best of both worlds: Sale of the equipment to enable the small business to have hosted voice, and get the annuity from the service provider offering the service.

How are smartphones integrated into a hosted VoIP plan?
On the CPE side, Andrew noted that Cisco is making sure that when you sit down in front of a SIP phone, it’s an integrated experience with a handheld device, and that you can use your handheld as a speakerphone or as a headset or handset.

Ken talked about how the hosted voice platform is in the carrier network, so it becomes easier for the carrier to develop a touchpoint into the wired line network. Features such as “follow me and find me” are easily integrated into the carrier network, and pushed down into hosted voice.

Why is a recurring revenue stream better for me than taking the margin upfront like I get in hardware sales?
Andrew remarked that you shouldn’t assume that the profitability from a three-year stream of payments is less than the profitability from a single larger transaction up-front—he said that often, it’s more. But, he noted, we do have to think about the new business models within the channel, and movement to this will have a real positive impact with profitability. Ken also added that when you collect an annuity over time, you have a tendency to see your customer more often, and see how the service is working, presenting the possibility of uncovering even more opportunities.

Do people use voicemail anymore?
Ken said that voicemail is morphing into visual voicemails, texts, email attachments, etc. There’s also substantial growth in desktop video, with video voicemail becoming more predominant. Voicemail isn’t going away, but it might not be called voicemail anymore. (Video voicemail, anyone?)

Which hosted VoIP capabilities are essential for small business?
Ken pointed out mobility, and the ability for the small business to communicate regardless of where they are, is critical.

It certainly was a wide-ranging, and very informative discussion. Got any more questions about hosted VoIP and how you can get involved? Be sure to share in the comments.

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4 Comments.


  1. Nice interview and thanks for the stats provided before interview. Actually, voip phone is quite popular in business community now a day. As we all know it offers numerous unique features that make it customizable for every business. Besides voip phone service is the cheapest phoning system available in the market.

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  2. Great to see Ken out there smoking the peace pipe with Cisco. We all win when SMB’s start communicating and working over IP.

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  3. Jeff Beckham

    For more information on the Cisco Hosted VoIP solution discussed in this broadcast, visit http://www.cisco.com/go/hsb and log in to view all of the partner-entitled documents.

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  4. Nice to see the point about VARs still having a big role in SMBs switching over to hosted VoIP services.

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