Hosted VOIP Isnt Always Up to the Job

Businesses turning to managed and hosted services for a smooth path to voice over IP are discovering an uncomfortable reality-not all offerings are enterprise-strength.

Businesses turning to managed and hosted services for a smooth path to voice over IP are discovering an uncomfortable reality—not all offerings are enterprise-strength.

For Micro Office Solutions LLC, an office space rental company in Manhattan targeting small businesses, the attraction to VOIPs savings and simplicity led to just such a disappointing false start.

"It [was] really important to keep the initial build-out cost low," said Wellie Chao, managing partner at Micro Office, which signed on to service from consumer VOIP provider Vonage Holdings Corp., in Edison, N.J. But by this summer, it was clear Vonage couldnt handle Micro Offices call volume, forcing the company to switch providers.

Of the 400 VOIP service providers in North America, only a handful deliver services that can be considered business-grade, such as IP PBX support, business broadband VOIP or VOIP over IP-VPN.

Businesses seeking cost reductions by running voice and data traffic over one network need to carefully weigh the growing number of hosted or managed VOIP service offerings. The good news is that an increasing number of providers are now taking business concerns into account.

In October, Qwest Communications International Inc. rolled out an IP Centrex service, called IP Centrex Prime, for enterprises with multiple locations, and earlier in the year, Qwest launched its OneFlex hosted VOIP offering. OneFlex, aimed at small and midsize businesses, provides local, long-distance and high-speed Internet access, using VOIP phones and enabling users to administer their own functions, including setting up conference calls and voice mail and adding users.

/zimages/2/28571.gifClick here to read more about the spread of hosted VOIP.

SBC Communications Inc.s PremierSERV Hosted IP Communication Service allows midsize and large businesses to manage their customized features online, including find-me/follow-me capabilities. Users must have SBCs dedicated Internet access with a frame relay connection. Like MCI Inc.s Advantage IP service, PremierSERV delivers calls both over pure IP networks and over the PSTN (Public Switched Telephone Network), but it is not available everywhere nationwide.

Despite a flurry of additional announcements over the past year, the large incumbent carriers for the most part have not aggressively targeted SMBs. So far, they have left the lions share of the hosted and managed VOIP market to smaller, regional carriers and CLECs (Competitive Local Exchange Carriers).

Next Page: Smaller providers rush in.