Small and medium businesses (SMBs) are rapidly transitioning to from public switched

telephone network (AKA plain old telephone systems) to voice over internet protocol (VOIP) according to the Yankee Groups recent report. The growth potential of this emerging technology is great and is creating a digital rift in the business communications world. Making business calls is becoming easier, more efficient and cheaper much to the dismay of traditional phone companies, causing 70% of businesses to give preference to hosted VOIP solutions.

The possibilities are many, including cost saving solutions such as free or reduced toll calls, network management features and the ability to focus on core business instead of diverting funds to telephony. Productivity increasing solutions make communications within a business more efficient so less time is wasted.

Customer service was one of the focal points for the report, and one company came out on top. M5 networks was found to be a competitive market force that offers hosted VOIP systems in a customer friendly, professional environment. M5 offers outsourced IP communications that eliminate the hassle and maintenance of having a premise-based system so management costs are eliminated.

Over 400 SMBs in the New York Metropolitan area have already made the switch, proving the feasibility of such a technology to infiltrate a market.

The problem is that SMBs are less likely to make the actual transition, but SMBs as a whole have more of an interest in transitioning than other types of businesses. The desire is there but they are hesitant to make a change. They want to adopt this new technology, so the question remainswhy havent they?

In response to this question, Matthew Del Percio, Associate Analyst of the Yankee Group responded, “We have talked to a lot of SMBs about VOIP, in terms of adoption and penetration, but the numbers are still in the single digits as they were in 2004-2005″

In response to why SMBs interest remains consistent, but in a dormant state he said, “SMBs are constantly looking for solutions, such as VOIP because there is limited risk involved; you are outsourcing it to an organization that is dedicated to providing that service. They will do all the upgrading it is one less thing to worry about.”

So the verdict seems to be that although SMBs are still currently hesitant to make the switch, it may just be a phenomenon of no one wanting to be the gunea pig. There is safety in numbers and it is easier to get on board with a VOIP system after seeing others implement before you.

As a wrap up, Del Percio had this to say, “What we are seeing in the market today is an interest in VOIP systems. Not a day goes by that there isnt some new information about the great potential in VOIP as a market potential. Despite the potential, the momentum has not picked up because of these barriers to adoption that I mentioned to you earlier. Given those challenges, the two headed monster of the benefits productivity and cost saving makes it a formidable foe. It is really going to continue to drive momentum so hat adoption will eventually take place.”