Small Businesses To Adopt VoIP in 2005

Voice over IP (VoIP) — telephone calls over the Internet using a broadband connection — may finally start being adopted in meaningful numbers by small businesses in 2005.

Until recently the hype about VoIP was greater than the actual subscribers. You’d think there were tens of millions of subscribers given all the media reports about VoIP. Yet, in the United States there will be only 1 million consumer VoIP subscribers by year end 2004.

According to research firm Instat/MDR, businesses are still taking a conservative approach to VoIP. Just 12% of businesses are using VoIP in 2004 (or about 700,000 businesses out of 5.9 million total).

More larger corporations are using VoIP than small businesses according to Instat/MDR. And that’s what you’d expect of a new technology. Small businesses are usually not quick to adopt cutting edge technologies. They can’t afford to take risks with technology.

However, the crescendo of attention on VoIP is rising. It started back in the summer of 2004. It seems that every research firm worth its salt is predicting big jumps in VoIP subscribers in 2005.

We’re seeing it everywhere we turn. We keep running into small businesses — like this one — that have implemented VoIP or are seriously considering switching to VoIP.

And it’s not just high tech small businesses and the early adopters. More and more regular small businesses — retailers, beauty salons, dry cleaners — seem to know what it is and what it can do for them.

Research firm IDC predicts that “VOIP will finally go mainstream in 2005….”

eWeek’s Ellen Muraksin writes: “Remember 2004 as the year that VOIP finally penetrated mass consumer consciousness, as friends in normal walks of life began to gain a dim awareness of the stuff I write about.”

Of course, Om Malik has been saying this for some time now, noting this back in August of 2004: “Sandy Wormington, owner of the Kennewick-based Just Roses chain of flower stores, recently signed up for a voice over Internet protocol telephone service in his home. And his business has never been the same since he coughed up $55 installation charge. He pays $20 a month, and expects to save $100 a month on the long distance calls placed to his Just Roses stores across Washington and Idaho. *** More than the loss of consumers, incumbent phone companies should be worried about the loss of TDM voice revenues from these small and medium sized businesses.”

Look for VoIP to be a hot area for small businesses in 2005.

UPDATE December 8: Alex over at IT Facts has compiled some excellent VoIP links.

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.