Frost and Sullivan Study Says Conferencing Critical to SMBs

Hosted conferencing and communication technologies like VoIP, webinars and video conferencing will prove critical for cash-strapped SMBs, a Frost & Sullivan report concludes.

A business report from consulting firm Frost & Sullivan underscores the crucial importance of hosted conferencing technologies, which can save time and money for SMBs. While the world financial crisis and corresponding credit crunch are wrecking havoc on companies of all size, the report notes conferencing technology can particularly benefit small and medium-sized businesses.

"Online collaboration technology is becoming fundamentally critical to SMBs," writes Frost & Sullivan principal analyst Roopam Jain. "It offers a huge upfront advantage that organizations seek in harsh economic times." A Frost & Sullivan report found that in 2007, the global web conferencing market reached $993.2 million, growing 27 percent over the previous year. The report forecasts this market to reach $2.5 billion in 2011.

Jaim notes that SMBs looking to saves costs wherever possible will find conferencing could drastically increase travel-cost savings. She says she believes it is the biggest value proposition offered by Web conferencing.

"Sophisticated hosted conferencing technologies are offering a new collaboration medium for SMBs that in the past relied on travel or audio and voice conference," she says. "Businesses have to do more with less. Having to scale back is going force SMBs to turn to technologies like business conferencing, and it offers a huge upfront advantage to these organizations."

Jaim says these hosted conferencing services provide immediate upfront value simply because they allow small business owners to browse through options like Cisco's WebEx, which offers users a free 14-day trial of web conferencing, or Citrix Online's website, which offers a similar free trial period for its GoToMeeting service.

"We know that due to the worldwide credit crisis, for all of 2009, investments are going to be cancelled or severely reduced," she says. "As a result, hosted services will grow." Cost-effective communication provided at a low-cost level, done effectively, she says, will be very important for the foreseeable future.

Jaim recommends the first thing SMBs unfamiliar with hosted communications services do is peruse different technology offerings online, which are all browser based and are formatted in a user-friendly design. "Then they can see which technologies provide value, and then extend outward from there," she says. "These technologies are reliable now, and it's a great tool, especially in these tough times when people are struggling to conduct business as usual."

Jim Locke, president of the SMB Technology Network and a principal with computer and consulting firm AxonTech, agrees that hosted communications provide great value for the SMB market, particularly at this juncture. Not only do companies save time and money with reduced travel demands, but they also save money on expensive infrastructure configurations.

"People don't have to invest in hardware based phone systems. There's Skype, obviously, but there are also business-class services, like Speakeasy, that allow them to cut costs and increase the level of services they provide," he says. "It's become very reasonable to do these types of conference calls and virtual meetings. It's very cost effective to do it, and there's a lot of value SMBs can derive out of it."

He points to his own organization, SMB Technology Network, as an example of how hosted communications have impacted business. "One of our issues is how do we keep regular communications between our 20 chapters in the US," he says. "Instead of meeting in person, we can use GoToMeeting to allow our board members to communicate with our various chapters. That's a big advantage, because time I don't have to spend sitting on the road is time that could be better spent doing other things."