Skype Symbolizes the Changes in the Telephony Space

Five percent (5%) of small businesses use Skype, mostly for quick chats.

That little tidbit was part of the findings in a research report issued by AMI Partners yesterday.

And that little factoid also symbolizes how far the world is changing when it comes to handling voice calls and other forms of communication.

Think about it. You have an e-commerce/auction company (eBay, the parent company of Skype) providing a telephony solution — and one that’s free or almost free, at that. It’s a textbook definition of a disruptive innovation.

And Skype is just one example. The entire telephony space has been turned on its head.

Increasingly we use software and the Internet to make and manage voice calls, instead of using traditional phone lines. This has opened up options for how we manage our communications. It used to be that data relating to our phone system was kind of marooned off by itself. But now our many systems are converging, allowing us to consolidate and manage data in one place using software. Some day, multiple communications systems (e.g., email, voice mail, Web conferencing) will be integrated into a seamless whole.

The vendors and their roles are shifting, too. In the past if you wanted a business phone system, you had one choice: the phone company. Now, you have multiple choices. Software companies, hardware vendors and, yes, even e-commerce companies like eBay have gotten into the voice communications space.

Sanjeev Aggarwal, AMI’s Vice President, notes that small and medium businesses (SMBs) with between 1 and 999 employees are increasingly interested in IP-based communications solutions:

“The SMB IP communications market is sizzling, leading to increased interest and competition from global and regional voice/data vendors, software vendors, internet/portal vendors, and large traditional telecom service providers. In addition to voice communications solutions, over the past few years telecom service providers have started to offer an expanded bundle of complementary services — Internet connectivity and managed services, including security, online backup/business continuity, web hosting and e-commerce, hosted e-mail and collaboration solutions, and hosted applications and databases,” Mr. Aggarwal says. “However, no single dominant vendor has yet emerged in this rapidly evolving space.”

If it sounds confusing, then you’re not alone. The new products and choices are exciting. But it’s going to be a messy marketplace for a while. Until the new solutions shake out and settle down, you could find yourself facing a confusing range of choices and vendors when it comes to communications systems for your business.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

3 Reactions
  1. It is not surprising the SMB market is just taking off – the increased competition may have led vendors to create finally products and solutions well-suited for our unique SMB needs.

    An interesting trend to watch is the adoption rate of P2P mobile solutions like Rebtel due to the increased awareness of Skype-like products. These types of solutions provide true mobility and cost advantages for the SMB market. I recently discovered Rebtel ( which I now use exclusively because I do not need to be at a PC, buy special equipment, or download software to make free long distance or international calls. With Rebtel, I can conduct business anytime and anywhere.

    What have been your experiences and observations of the mobile P2P market?

  2. Globalconnect, I think something like Rebtel is interesting for individuals (especially students on budget), but not a practical solution for businesses. Businesses can’t call a customer and tell them to hang up and call you back at a certain number — not if you want to keep the person as a customer.