Is VoIP Really Happening?

I've cited Carl Weinschenk's IT-Finance Connection portal a few times, and his latest post on Wednesday caught my eye. Titled "The Case Against VoIP", Carl asks some basic, but important questions that help explain why VoIP hasn't yet taken over the world - at least in the business market.

His focus is on IT departments and the things they need to take into account when considering VoIP. While his points are basic, they are critical elements and stark reminders that VoIP isn't necessarily for everyone. There are lots of ways to spin this logic, of course. In his first point, Carl argues that as the cost of TDM service has dropped, telecom costs may not be that much cheaper with VoIP, so cost savings is not the driver it was a few years ago.

Maybe so, but Carl doesn't parse out the issue enough to contrast the service with the equipment. First generation IP phones for VoIP were orders of magnitude more expensive than legacy desk phones, and early on that was a real deal-killer. Now, the cost of the phones is pretty much on par, so on that count, VoIP can save you money. There are many other aspects of the TCO equation of course, but I'll leave it at that for now.

While I do agree with Carl's overall conclusion: "There are many organizations that can get by quite nicely without VoIP" - I'd have to say there many other factors beyond everyday IT-level issues to really make the right decision. It's hard to put an ROI metric on productivity, and when companies start falling hard for the UC pitch, VoIP is a given, as it becomes part of much bigger story line.

Anyhow, stepping back, Carl isn't the only one out there raising questions around VoIP's lack of mainstream breakthrough, and that's why I'm writing about this. Garrett Smith had a post last week along these lines, and it will lead you to some other posts that make for interesting reading.

As big a fan of VoIP that I am, Carl's premise puzzles me too, which of course means you have to be careful listening to what the vendors tell you. There's tons of growth and good news stories out there - no doubt - but whether it's enteprise, SMB or residential, VoIP still has low market share. In the consumer market, if you take the cablecos and triple play bundles away, VoIP is in the low single digits for market share, and we all know how successful Vonage has been!

Ike Elliott has a great post about that from earlier this week, btw. I'm putting cable aside in this case because their success with VoIP comes pretty much as part of the bundle. They wouldn't be putting up these kind of numbers if they sold it as a standalone service.

Without delving too much further into the prospects for consumer VoIP, I will say that the future is much brighter in the mobility world. Michael Arrington had a nice post today on TechCrunch about how well Truphone's application on the new iPhone is working for VoIP. Now, that's a growth story, and am sure I'll be posting more about that soon.

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