Broadband, bundles lure SMBs

CHALLENGES REMAIN

For the entire industry, however, there is still the challenge of getting services to some SMBs, particularly those not in urban or suburban areas.

“Service availability is still the key issue — getting the service everywhere it needs to go,” Cochran said.

In many smaller towns and rural areas, DSL and cable modems may be the only broadband option, and that won't meet the growing needs of the SMBs.

There is also the very real encroachment of the IT world, with companies such as Cisco Systems and Microsoft selling hosted voice services directly to SMBs over broadband pipes.

“SMBs know they can go to their Cisco partner, their Microsoft partner to get these services over the fat pipe, and in that kind of world, I don't care as much about my relationship with my telecom provider,” Hilton said. “I see the shift coming from the IT side of the world — those channel partners getting in and selling them more, where voice is just another application and all you need from a service provider is the pipe.”

In that world, he added, the competition centers on delivering high-speed pipes with the highest quality of service and figuring out how to succeed financially in the pipe business.

“We are at the beginning stages of service level agreements for the small businesses,” Hilton said. “The reason small businesses need it is, in the IP voice world, some funny things happen if you don't prioritize the voice and your network isn't set up for it. The more we move into VoIP — and the incumbents aren't pushing them into it, the CLECs and the IT vendors are — and the more they use these on-demand solutions — that puts more applications online versus on your premises — then the more important it becomes for the pipe to function with a certain level of reliability, a certain amount of uptime.”

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