Wednesday, March 10, 2010

A Few Lessons About VOIP in Small Business

Sorry for the delay (busy). Here are my notes from the content side of the SMB VOIP conference.

I attended the first-ever SMB VOIP show in Vegas. It was pretty funny for me to be presenting there. The SMB show was "inside" the larger Channel Partners show. Two years ago some folks from Channel Partners called me because I had proposed a paper for their conference. They were intrigued about managed services in the phone space. But once they got me on the phone they didn't really understand what it was all about. They never called back.

Now, as VOIP makes it much easier for infrastructure folks to get into the phone business, they are eager to bring in the SMB folks and find out what's going on. Several people from the larger show attended the SMB sessions and came away scared about our potential to make inroads into their territory. For years these folks have realized that voice and data are merging more and more, and they've always assumed that they would simply take over the data part of the equation.

But managing computer systems is a lot harder to learn than modern VOIP. So it turns out that we're more likely than they are to be taking over territory, or at least forcing alliances.

As a side note, we managed to do a live podcast from the show with some folks who have great insight into the hosting options for VOIP. That is posted up at Cloud Services Roundtable for members.

Here are some of the things that really stood out from the event. If you're new to voice/telephony, consider these as you develop your offerings.

Don't Sell VOIP - Sell Telephone Systems

No one needs VOIP; everyone needs telephones. In addition, plenty of people have plenty of sob stories about early implementations. Don't feed on that negativity. Just focus on the fact that everyone needs a phone system. Along with that, focus on providing a quality system that is very reliable and gives the client a positive experience.

One of the biggest weaknesses in the SMB space is the assumption that clients don't want to spend more, or are unwilling to spend money. At the same time we all have clients who spend lots of money and want quality. Take a look at what your clients have been spending on phone systems. When you move to VOIP they are almost guaranteed to save money. If they move to hosted VOIP it's even easier.

So use some of that savings to guarantee a good experience. Here's how.

Upgrade Hardware

Newer routers, firewalls, and even switches have newer chip sets and will dramatically increase telephone traffic speeds. So as part of the phone system setup, you need to quote some new equipment:

- Router (Maybe. If it's over three years old, then for sure.)

- Firewall (Definitely. Just do it. And a good piece of equipment, not a new $40 home box.)

- Switches - Power Over Ethernet - Replace anything more than two years old to be safe. More on POE in a minute.

- QOS devices - That's Quality of Service. In addition to the firewall, a QOS device will help you with traffic shaping and make sure VOIP has priority over You Tube. $400 to $1,000 for a small office.

Yes, there's some money here. But the improvement in reliability and performance will be dramatic. Ask you client whether they want a half-baked solution or good, solid, reliable phone service. Also consider the savings discussed below.

Build Redundancy

Just like a server/network system, reliability happens on purpose and not by chance. Here are some tips for Uptime.

- Use POE. This is new-ish technology for most small businesses at this time, but it is also "old" and reliable. Modern POE switches are totally automatic at sensing POE devices. You can potentially save thousands on wiring if you use the same port for phone and desktop PC. Each phone goes to a POE port, powering phone and supplying internet. Desktop plugs into phone mini-switch. Almost all IP phones have these features (POE and 2-port switch).

Check the ratings! Make sure your switch can handle all the phones you have and move the power for all those lines!

- Big UPS on the Switch. Once all the phones are getting power from the POE Switch, that switch needs enough juice to cool itself, move traffic like a switch, and pump power down the line to as many phones as you have connected. When the lights go out, you'll need good UPSs on the firewall and switch so that clients have dial tone when the power is out . . . just like an old school phone system.

- Redundant internet connections. Just make it part of the quote. Even if the failover is to a Sprint Wireless card on the firewall, you should have something. Again, ask the client if they want to be without phones when the power is out. There's a cost to everything.

Consider a Hosted Solution

For true uptime even if the building is on fire, consider a hosting VOIP solution. First, these solutions have amazing feature sets. At one of my companies, extension 303 rings into my home office. Linksys SPA942 sits just as if it were on my desk at work. That means a ring group can include me as easily as two people sitting next to each other.

When the internet is out at work, our hosted phone system still runs the ring groups, forwards to cell phones, and has all the features it has every other day of the week. Just like a virtual server doesn't know it's not a real machine, a hosted phone system doesn't know my office is under water. So it keeps working.

Focus on Savings and Money

One of the hottest selling techniques in the phone business is the Telephone Audit. Virtually everyone with more than three phone lines can save money. Companies with large offices always have a forgotten line, a number with zero minutes used per month, or too many phone lines.

Think about the average office with ten hard wire phone lines. If you were to drop a ten year old phone system in there you might recommend 5-6 phone lines and let the digital switch serve up dial tone as needed. Guaranteed savings. But with VOIP you can save even more than that. Now take the cost of all the add-on fees that the old phone company throws in just because they can and the savings really pile up.

Ask your clients/prospects for a copy of their phone bills. Go back maybe three months. You'll need to learn how to read these things. But you'll discover a world of confusion and over-charging that you never knew existed before. It is an exercise that is almost guaranteed to result in savings for the client.

This is the most used and tested sales method for phone system sellers of all sizes.

Look at all the money being thrown away and you'll see that there's a huge savings to be had. And don't forget to ask about the cost of their in-house hardware and existing phone system. Thousands of dollars. Add that to the mix. Create an overall cost estimate for five years of equipment and service. You'll find a huge amount of savings.

And that's where you'll find the money for new switches and firewalls.

Remember: Right-size your solution for your client. If they've been in business for more than a week, they already have a phone system. It has a known cost, a known reliability level, and a know customer service level. You are literally going to improve ALL of those things while saving the client money. So don't foolishly set up a new phone system with an old, slow firewall and the wrong infrastructure. You don't want to take the client from 99.9% reliability to 95%. That will kill them and might lose you a customer.

Spend enough to do it right and the VOIP system you install will be a great performer for any client - no matter how small.

- - - - -

Great conference, Harry! I wish there was another one in six months. This is a very fast moving world and we, the SMB Consultants, are poised to take over the world.


Full discussions of these topics and the conference are taking place right now at


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  1. Hi Karl,
    This is a great post! I work in the Cisco Small Business Marketing group, and we agree that it is exciting times for VOIP. Thank you for recommending the SPA 942 phone!
    Here is a link to additional Small Business phone series:



  2. Thanks, Marie. I'm not above taking gifts from vendors, so if you have any spare phones sitting around . . .



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