Small and Medium Enterprise Business Communications in the UK

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Demand for new products and services, including unified communications

Introduction

The term "convergence" is much overused, and applied to many similar but differing scenarios involving various mixes of products, services, and technologies, and with various different associated apparent benefits. Whatever the benefits however, the common factor in most ‘convergence?scenarios until recently has been that the market and technology infrastructure has not been there, nor a clear picture of the benefits that organisations really wanted from such offers. Today, the infrastructure is available with the uptake of broadband, the growth of WiFi and 3G, and the pervasiveness of IP networks.

The demand picture is also becoming clearer, and one of the key areas of interest is unified communications ?the ability for businesses of all sizes to gain improved business efficiencies and possibly effectiveness from a common communications platform. These reports outline some of the views on a range of communications issues in smaller businesses; this report looks at the view from 181 SMEs ?those employing from 10-500 people. The sister report to this analyses the micro-business market employing from 1-10 people.

Executive Summary

The key findings in this report include:

Communications technologies today and in the next year

• Levels of usage of certain technologies and services are already high. Of particular note is Virtual Private Networks (VPN), which is surprisingly high, but may well indicate how important applications such as email anywhere have become;
• The most rapidly growing technology is Voice over IP (VoIP), which comes second only to laptops in investment planning for 2007; VoIP is getting ready for prime time today, and is proving compelling to companies of all sizes;
• VoIP is still more attractive to early or aggressive users however, who have a clearer understanding of its value beyond simply saving money;
• More than half the respondents are also planning to invest further in VPN, mobile devices, and WiFi, again showing that ‘work anywhere?and ‘email anywhere?have become a serious and important part of smaller businesses as well as larger enterprises;
• 55% named managing their current situation more effectively, gaining new services, or moving to a single-supplier solution as their prime investment objective. Only 22% of respondents were more focused on saving money;
• Although 48% of respondents feel that shaving costs is still an important issue, a similar number believe that single-supplier would be cheaper, and a substantial minority ?31% ?are most interested in predictability of expense;
• 51% feel that a single supplier solution would be either more cost-effective, easier to manage, or both. A further 17% think it may cost more but would still be worth it for an easier life. This result would appear to be conclusive proof that single-supplier solutions would be attractive to this market;
• There is clearly demand for high-bandwidth mobile services, but the technology that will deliver those services is still open to question;
• Respondents?understanding of the term convergence is clear. Only 20% associate the term with unified billing, despite the majority understanding it as converged delivery across all networks. Presumably, that means that they see convergence as getting multiple services across any one existing network, but still being billed individually for the networks that they use (fixed, mobile or internet connections);
• A majority of respondents (57%) routinely try to minimize the number of suppliers they use in any field, but in this case they don’t feel that there is a simple and cost-effective enough solution for them;
• 55% want to achieve greater control of their telecommunications services ?a unified suppler should be one distinct path to achieving that aim;
• Note: there is a correlation between company size and the desire to simplify supply situations. The larger the company, the more likely it is that respondents will try to achieve unified supply;
• The most valuable value-added service from a unified solution (84% see the value in it) is one that automatically finds and routes calls and internet access to the lowest cost route (‘Least Cost Routing?;
• Other unified services that respondents want would allow the phone to be answered anywhere seamlessly (70%), and the ability to concentrate messages of any variety in a single mailbox (74%);
• In fact, more than half of SME respondents saw the value in each and every potential service that they were asked about ?another strong endorsement of new service availability from a converged supply environment;
• 70% see that value in location-based mobile services (a seamless transition between mobile, wireless and fixed line communication options, charging a mix of different rates for usage depending on location (fixed indoor, mobile outdoor, typically);
• The largest concern over location-based services is Quality of Service (QoS), cited by 55% of respondents as a potential deterrent to investment.

In summary, there is great demand in the market for simplification of telecoms supply, and a desire to regain control over communications usage. There is s very clear demand for newer technologies (such as VoIP), and an appetite for new services and new ways to support and grow business.

These results indicate a clear market opportunity for unified telecoms solutions, and the potential efficiencies, cost advantages, and new service opportunities that derive from them. Which suppliers will be favoured however is open for debate.