Sage New Market

The New Market of Voice over Internet Protocol (VoIP) has been defined by the market itself, science and scientists, industry analysts, manufacturers and solution providers. To help frame and define VoIP New Market, Sage presents information in four parts:

Background Technology making VOIP relevant
A comparison between old and New Market
Economic drivers facilitating New Market change
Anecdotal evidence of New Market

Technology
All technology takes its value from software, … and software is written within the limits of current processing power.

Until recently, processing power lacked the ability to process voice through software driven solutions. Today, processing has an order of magnitude increase every 12 months and has reached a point where Software Based Voice Processing is practical and preferred. The need for hardware based systems no longer exists and, as one industry analyst says, is "passé as plain old telephone service" - The stage for VoIP solutions was set. Enter the standard, Session Initiated Protocol (SIP). With a software-based voice processing solution developed within a common standard, the technology was now available for New Market acceptance.

The attraction of dramatically escalating capabilities of the New Market solutions and rising cost associated with old market legacy PBX have overwhelmed the natural inclination not to shift, … but the shift is underway.

VoIP is the replacement for TDM. Most, if not all, manufacturers have moved all research and development to VoIP. While all the standard arguments apply to justify VoIP over TDM, such as simplified network structure and flexibility for expansion and change, most solution providers stop with the basic comparison of TDM to VoIP. As the comparison outlines above, there are additional layers to the New Market onion that are very important and should be understood.

The New Market has set the benchmark of standards-based software and hardware agnosticism. The old market still leans on proprietary hardware running on vendor-specific software. In other words, New Market demands choice versus being stuck with "only one option solution."

With old market technology, continued onsite support must remain the model. Proprietary hardware, such as network appliances and vendor-specific software, requires that method. New Market solutions lend themselves to "in the moment" remote support technologies such as our NOC solution, Sage View 360. Here, service needs are handled in the moment, providing customer satisfaction ratings second to none.

Again, the nature of New Market hardware agnosticism and standards-based software lends itself to client-driven application development. For example, through .NET, a client’s CRM can be easily integrated into sales, contact center or customer service applications. "Green" business practices are gaining in their relevance. More and more enterprises are seeking methods to increase their green awareness. New Market VoIP is green. With a fraction of hardware needs, many of the environmentally caustic manufacturing processes are reduced. Additionally, it utilizes remote support… instead of technicians in vans burning carbon-based fuels.

As you have read, there is much more to a VoIP decision than its VoIP. This shift to a New Market certainly has many layers driving the definition. Additionally, the economics are fueling the move.

Economic Drivers
Here Sage outlines the economic drivers fueling the move to New Market.

From the manufacturer’s perspective: A software model offers much greater profitability vs. a hardware approach. Lower manufacturing cost and higher margins are compelling enough to seek a Microsoft model. Additionally, the software model provides an annuity relationship with the client. Inventory cost is reduced, and maintenance of support staff supporting legacy solutions is also significantly reduced.

From the vendor perspective: Similar cost savings and profitability enhancements result as efficiency gains emerge with the technology lending itself to remote support. Remote support expands geography of opportunity, increases production of our technicians and greatly improves client satisfaction levels since service and M.A.C. work can be handled in the moment within the NOC.

From the client perspective: The economic advantages of choice associated with hardware agnosticism and standards-based software are very strong. Growth and enhancements are functions of software eliminating expensive hardware upgrades. Simplified networks and management, of course, contribute. Cost of ownership is just lower.

Anecdotal Activity
Sage has witnessed more activity in our industry in the last 18 years than in the previous 20+ years. The New Market that VoIP/SIP is creating is similar to the breakup of the Bell telephone system and Y2K issue multiplied by 1,000.

Here are some examples of manufacturers reacting in the New Market:

Two legacy voice solution manufacturers announce New Market solution plans.
Tier 1 legacy PBX manufacturer sells to investment group outside the industry.
Voice and data manufacturer announces deal to sell to Chinese company.
Two legacy old-market PBX manufacturers merge and sue a third manufacturer just entering the market.
Etc.

The VoIP New Market is forcing change like never before. Care must be taken to understand New Market.

In closing, in Sage’s opinion, understanding VoIP New Market definition is the most important factor in a long-term VoIP decision.

We invite you to contact our company for a no-obligation discussion of the New Market. It’s our commitment not to waste your time. We are sure you will be glad you spent the time with Sage.