…and why 90% of UK SMEs don’t use hosted voice.
1. Acceptance of the concept. Before IP voice was commercially viable, millions of US SMEs were already using Centrex. In the early 1980s the US telecommunications market liberalised, creating 7 local operating companies (the equivalent of Openreach) nicknamed ‘Baby bells’. These all launched their own central exchange offerings (Centrex) in preference to on-premise telephone equipment. With a big stake in the equipment market, BT was never really interested in Centrex and the UK’s first Centrex product launched by Mercury in the early 1990s was clumsy, unreliable and expensive.
2. Connectivity. When Bellcore patented ADSL it was intended for the residential market and the business market was already well served by inexpensive un-contended leased lines – another benefit of breaking up the local loop. With no real competition in UK’s local market leased line prices remained high and SMEs turned to ADSL for Internet access needs. Asymmetric, shared bandwidth with a best efforts SLA proved totally inadequate for carrying business voice traffic and adoption stalled until recently when the price of Ethernet leased lines started to fall and broadband became more reliable.
3. Quality of offerings. Learning from Centrex, US companies like Broadsoft developed highly featured, carrier class systems capable of running a 10 seat company and a country of 10m people. To balance the high cost of connectivity UK entrepreneurs turned to freeware like Asterisk. Their self-developed offerings were often basic, unreliable and hard to scale. It wasn’t until US IP Centrex companies started to expand abroad that hosted telephone systems started to meet, and often exceed, the needs of UK SMEs.
4. Propositions. Most US IP Centrex propositions are very simple. In the US you can buy a small business package for up to 25 employees for $99 a month. This includes all the features you would ever need and all your calls. The contract is monthly and the price is not dependent on how many staff you have or how may devices they want to use. In contrast the UK market is fragmented and complicated with companies still trying to lock SMEs into long term contracts, hidden costs and unpredictable call charges.
With the recent introduction and localisation of serious hosted telephony products and dramatic reductions in leased line prices, hosted telephony is finally taking off in the UK. SMEs are starting to understand that if they work with organisations who know what they are doing they can get a fantastic service and half their office communications bill. Small IT and telecoms supply companies are finding hosted telephony an easy addition to their portfolio and a product that generates additional core business as well as attractive, hassle-free, recurring margins.
If you would like a quick online audit of your current telecommunications set-up from Jola then please click below.
