Hosted VoIP Has Small Biz's Ear - InformationWeek

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3/17/2006
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Hosted VoIP Has Small Biz's Ear

A flat monthly fee for all telecom hardware, service, and maintenance appeals to smaller companies.

Back in late 2003, Brooklyn Brewery was looking at some big changes. In addition to selling off its distribution arm in order to concentrate on its core business as a microbrewery, it also was looking to streamline its technology infrastructure by simplifying and improving the telecom side of the business.

"We had an old, patched-together PBX system that was on its last legs," says Eric Ottaway, general manager of the brewery, which was founded in 1988 and employs 27 people. The company sells its beers on the East Coast, from Massachusetts down to Georgia, and internationally to Denmark, Finland, Hong Kong, Japan, Sweden, and the United Kingdom.

Administer phones or brew beer? To Ottaway, the answer is obvious.

Administer phones or brew beer? To Ottaway, the answer is obvious.


Photo by Sacha Lecca
Brooklyn Brewery already had been considering various telecom options when its aging PBX caught fire. "Luckily, we were here," says Ottaway. "We heard a pop, a strong smell of smoke, and the box on the wall was literally on fire." The fire was quickly put out with no damage done to the premises, but the need for action was paramount: As at most small businesses, telephone and Internet access are extremely important to the brewery's operations.

Ottaway called M5 Networks, a provider of on-demand voice over IP systems, with which he already had been in touch. Within two days, the brewery had a new IP-based telecom system.

"We're a brewery, not a phone company, and we believe in sticking to what we know how to do, and to outsource everything else to people who know their businesses better than we do," Ottaway says. "Sure, you can buy systems to install yourself, but at the end of the day, you have to maintain and fix those systems yourself. With a hosted service, we get a lot more functionality, and better service, at a lower cost."

Hosted solutions are increasingly popular for software applications, as smaller companies decide that they would prefer to pay an all-inclusive monthly fee than invest in software, hardware, and infrastructure, and pay for ongoing vendor support and maintenance.

Even though hosted VoIP is relatively new, small-business owners are turning to vendors like M5 to avoid buying or maintaining a phone system and the phone lines connected to it. Companies like M5 replace the usual multiple telecom vendors that businesses have to deal with--sometimes as many as five when you consider long-distance carriers, local carriers, and Internet providers--and take over all aspects of the system, including reliability, service, upgrades, and new feature deployment. Perhaps most important, the costs are predictable from month to month.

"The quality has been excellent," Ottaway says. "The Verizon lines in this neighborhood are in bad shape; there's lots of dropped and crackling lines. They really need to do a wholesale replacement of the infrastructure. But we don't have to worry about that any longer. Now, whenever we have any maintenance issues at all, we call the M5 service desk and they take care of it."

Phone Hassles
Typically, when moving into a new office, a small-business owner will have to buy a phone system that sits in a closet and handles voice mail and transferring and managing the various extensions, says Dan Hoffman, president and CEO of M5. A phone system is an expensive piece of hardware that's also very costly to maintain. "It typically costs several hundred dollars every time a business wants to do something even as mundane as moving a desk," says Hoffman, adding that "everyone hates their phone system."

Once you've bought the hardware, then you have to contract for local and long-distance services as well as for Internet access. There are all these vendors that you're paying each month, and all these different people need to coordinate with each other if something goes wrong."

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