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Hampton, who runs what is essentially a one-woman Web development company in Kansas City, said she was glad she had her cell phone handy when she was unable to make or receive calls from clients for 48 hours during last week's Skype outage. She had decided to make Skype's $40-a-year unlimited domestic calling her primary phone system to save money when she started her company.
"I always knew I needed a backup for Skype," she said. "I was annoyed by the disruption, but since I was able to use my cell phone, it wasn't that big of a deal."
Hampton's point is well taken: while many large companies have already made the switch to IP telephones, small business may not want to cut off their traditional phone services just yet.
Indeed, many experts agree that it's risky for small businesses to rely too heavily on services that use voice over Internet Protocol (VoIP) technology that leverages the public Internet. The reason is simple. The public Internet is still what is considered a "best-effort" network. Priority is not given to any type of traffic once it hits the public Internet. And even though voice packets don't take up much bandwidth, the technology is very sensitive to latency, which means that late-arriving packets could distort voice quality or cut off voice calls altogether.
While dropped calls or garbled connections may be tolerated by some consumers, business users generally have higher expectations for quality and reliability.
"The Internet itself is not business class," said Lisa Pierce, a vice president at Forrester Research. "Performance of the network is largely unpredictable. It's like the freeway. Sometimes you can sail through with no traffic, and other times you can be stuck in a traffic jam for hours."
Different for enterprise VoIP
By contrast, big companies deploying VoIP technology from suppliers, such as Cisco and Avaya, don't use the public Internet to transport their voice traffic. They use their own IP networks to transport calls within their campuses. And for calls traveling to other branch offices, they use leased data links rented from service providers like Verizon or AT&T. As a result, large VoIP installations often require companies to invest millions of dollars to upgrade their local-area and wide-area network infrastructures.
There's no question that these enterprise-class VoIP systems are too expensive for companies with fewer than 50 or 100 employees. But even the small-business offerings from Cisco and Avaya are often too pricey for many companies, especially those with fewer than 10 employees.
And yet the tiniest of companies want the features and flexibility that IP technology provides. Skype claims that nearly 30 percent of the 220 million people who have downloaded its peer-to-peer calling software client around the globe use the service for business purposes. In January, the company developed a special product called Skype for Business, which builds upon its existing calling features, such as Skype-to-Skype, Video Calling, SkypeOut, SkypeIn, conference calling, file transfer and chat.
But even though Skype is going after the "business" market, the company says it's only addressing the very low end of the market.
"Skype is not intended for enterprise-level needs," said Skype spokeswoman Jennifer Caukin. "Small businesses, however, should find it a very useful tool that complements their existing communications methods, and helps them reduce communication costs and increase productivity."
Caukin said last week's outage was regrettable, and she added that the company has always encouraged customers to have backup communications.
"It is important to remember that Skype is not a replacement telephony service," she said. "While Skype is extremely resilient, users, especially businesses, are advised to have alternatives in place for the unlikely event that Skype access is disrupted, either because of Internet access problems or other reasons."
Will the public Net suffice?
But some companies, such as 8x8 and Vonage, are marketing their services as a replacement for traditional telephone services. 8x8 offers a hosted PBX service called Virtual Office that provides call functions like four-digit calling, call forwarding and auto-attendant, plus some unified communications features, like e-mail-accessible voice mail. The service starts at just $49.99 per month.
A PBX, or private branch exchange, is used within a private telephone network and allows users to share a certain number of outside telephone lines for making phone calls.
Like Skype, 8x8's service uses the public Internet to carry voice packets. Huw Rees, vice president of sales and marketing for 8x8, said concerns about the reliability of VoIP over the Internet are overblown.
"The public Internet is more than adequate for providing a business-class voice system if you have a decent broadband connection," he said. "We have more than 8,000 business customers who range in size from 2 to 600 employees using our service. There may have been issues with Internet VoIP a few years ago, but not anymore."
But Chris Lyman, chief executive for a software PBX company called Fonality, disagrees with Rees. He said businesses that can't afford to invest in upgrading their own wide-area and local-area networks should use a hybrid solution that allows them to fall back on the traditional phone network if their Internet connection is interrupted. Fonality sells a software PBX solution that does just that.
"The public Internet just can't provide the kind of quality of service that is needed to offer a business-class service," Lyman said. "And small businesses don't typically have the money to upgrade their networks. So they shouldn't rip out their analog service to go purely to VoIP. They're not ready for it."
Fonality's products are similar to ones offered by Cisco and Avaya. But because Fonality's software is based on open-source technology, Lyman says it costs 40 percent to 80 percent less than competing products from these big companies. Using open-source and standards-based technology means Fonality's software can be deployed on any server and any desktop phone. By contrast, Cisco's IP PBX solution runs on Cisco hardware and companies using it must buy Cisco's IP phones.
Even Fonality's solution, however, can be too expensive for some businesses. It costs roughly between $300 and $500 per employee.
At the end of the day, small companies looking to deploy VoIP must weigh the pros and cons of the services or solutions they can afford.
"There is a portion of the market at the low end that simply can't afford these more expensive options," said Forrester's Pierce. "So an Internet-based VoIP solution may hit the right price point. Call quality and service reliability may suffer, but it's a tradeoff. And compromises have to be made."
Indeed, Shawna Hampton said that as her company grows, she will likely invest in a more robust phone system. But until then, she will continue to use Skype.
"For right now, Skype is a great service for me," she said. "But I'm glad I have a cell phone, too."
See more CNET content tagged:
Skype, VoIP, small business, Avaya Inc., IP
Conceptually, the Internet is more resilient than either landline or cell service. Remember, it was engineered by DARPA to survive a nuclear attack. The bottom line though is that everyone should have at least two ways to make and receive phone calls AND email. Yes, don't forget about email. Loss of email service can be almost as disruptive to business as loss of voice service.
I've also read that the reason that Skype went down is because a lot of computers went down and restarted at the same time, thereby overwhelming Skype's log-in server.
Also if the phone line gets cut, yes you can't use the phone, but if your internet service line gets cut you won't be able to use the internet.
If a business uses what is basically a free service and depends on it, then they deserve what they get.
Kite string: $1.49
Look on the dumb secretary's face when she tries to install the battery into it: Priceless.
Otherwise, you're just playing at business.
KieranMullen
http://360oregon.com
http://trixbox.org - Free open source IP-PBX
When you see events like the one organised by Profoss (http://www.profoss.eu) titled "Asterisk and VoIP" ( http://www.profoss.eu/events/october-2007-asterisk/ ), I think it shows the market is ready and interested to evaluate the options available.
Ramon Ray, Editor & Technology Evangelist, Smallbiztechnology.com
The scary thing is that people actually believe that Skype is actually a small business product.
It isn't and never was intended to be. Fact is it will work on any PC that has an internet connection, but that isn't the qualifier for small business when it comes to a reliable service. Small business looks first at price, then reliability, but will always go with price until you have a 2 day outage, then and only then do they understand the damage it causes.
There are still low cost solutions to help small business's, that don't get the attention they need from a Skype. Small business, needs simplified billing, customer service, reliability, and features that will extend their business to the customer base.
Skype doesn't answer this question, and most business's know this, but the internet community doesn't understand the value proposition in this regards. Skype would barely rank as a qualified Residential product, much less run your business on it.
The answer to the question is " HYPE"
1) I was able to save my client $6,000 a year on phone charges by renegotiating their contract with a mainstream, traditional dialtone provider. Insteading of paying exhorbitant per-minute charges for in-state and out-of-state long distance, they now just pay one fixed price for all-you-can eat service. This is standard telephone service, regulated by the PUC, and includes 911 support.
2) Even with the new rate plan, the carrier's per minute charge for international calls is too expensive. So I bought a couple of Linksys Skype phones for the employees to use when they make those calls. Skype-to-Skype international calls are completely free. Skype-to-landline/cell calls are just a few pennies a minute vs. our carrier's 30 cents a minute. After a couple of international calls the phones have paid for themselves in LD savings. An added benefit is that the Skype phones are cordless, which is handy for walking around the office when you're on a call.
3) By having two carriers, one providing traditional dialtone and one providing VoIP, we have some measure of redundancy in case of phone failure. Not 100% redundancy, but better than a single point of failure.
A well managed network can handle VOIP with no problems whatsoever.
It's all about understanding the caveats of the technology. Right?
- Try Unia Telecom, VOIP alternative
- by Astonct December 2, 2007 9:18 PM PST
- Unia Telecom - sounds like they're the good guys. at least they try. visited the site http://www.uniatelecom.com and also called them and was surprised to learn their whole operation is US based, unlike the other providers quick to run to India. they seem to be very well footed and reliable..tested the service too.
- Reply to this comment
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(19 Comments)Regardless, the fact that they give a percentage of their earnings to humane / humanitarian causes will definitely serve them very well in the future...thinking of signing up for the service....
Shelly G.