Is the economic downturn good for VoIP?

Answer to the title I believe is a resounding YES!

Until lately, one of the biggest problems my sales people have had is a 'call to action'. "So you can save me 1,000 year, sorry can't be bothered, too busy making money." Now most firms are looking at costs in minute detail. All of a sudden saving a 100 is a big deal. Our order rate has consequently gone through the roof.

What are your experiences?

Regards

Reply from satphoneguy on Jul 01, 2008 - 05:52 AM

middletn :

Answer to the title I believe is a resounding YES! Until lately, one of the biggest problems my sales people have had is a 'call to action'. "So you can save me 1,000 year, sorry can't be bothered, too busy making money." Now most firms are looking at costs in minute detail. All of a sudden saving a 100 is a big deal. Our order rate has consequently gone through the roof. What are your experiences? Regards

at least for the consumer end of things most reports show that VOIP lines are not replacing but rather complimenting existing PSTN and mobile. i would expect that an economic downturn would likely help the rock bottom priced cut rate VOIP services(such as international calling card type services) but could hurt sales of supplemental lines such for persons who get a vonage box in addition to existing POTS/mobile service to get an extra line/number in the home.

here in the US mobiles have really become the staple communications device with everything else be an extra line. while it makes sense to use VOIP for international calls instead to ultra expensive international minutes from the cell phone carrier; on the other hand i do not really see people adding a voip line at home and to use in place of local cell minutes(this is really the most basic way to use VOIP for cost savings). instead they are likely to decide they only want one monthly bill(the cell) and cut out the VOIP line they had as an extra phone at home.

spg

p.s. i was kind of limiting this the most common type of voip in USA the landline replacement services. there are of course some people like myself for whom voip is as much hobby as a way to save money; but we are so few that we really do not count for this type of discussion. and than the enterprise/business market is something else completely; but i would expect an economic downturn to be as likely to delay PBX upgrades(and the capitol expenditure) as to stimulate VOIP for cost savings.

Reply from Scribbles31 on Jul 01, 2008 - 07:14 PM

I think it is. Even though people have always been interested in saving money, now that gas prices are higher and companies selling consumer products are lowering the amount that they include in each package...and charging the same amount...every dollar counts. People are starting to realize that and, like me, are switching to voip not because they are looking to save thousands of dollars...but the extra 20-30 bucks a month really helps.

Reply from martyndavies on Jul 01, 2008 - 09:33 PM

There are quite a lot of conference services now funded (at least in part) through termination fees, and often they use VoIP to allow people in different countries to join the same conference, while each only paying the cost of a domestic call. These kind of companies are definitely in a good position to benefit as IT departments try to control call costs. Basically any turnkey phone service that can save money without capital expenditure is in a good position. After all, no CIOs are likely to find enthusiasm for ripping out switches right now in order to "convert everything to VoIP". Similarly anything easy to use that can ride on the back of data links between offices (e.g. Microsoft Office Communicator, Skype) will likely see a lift.

The fly in the ointment (as satphoneguy says) is that we're all wedded to the mobile phone, and it's not cheap to make mobile calls. You often witness people calling using their mobiles even though they could reach out and pick up the deskphone. It's because it has all of our contacts in it, and it's just quicker (and uses less brain power) to call that way. It's also not cheap to receive calls on a mobile when you are roaming. So although enterprises will be trying to reduce telephony costs, mobiles will be working against it.

Reply from x-console on Jul 02, 2008 - 09:02 AM

the last three things a company turns off before it closes down are internet access, telephones, and power. Normally, in that order. VoIP is likely to be as resilient as any other service in the market, imho.

Reply from dean on Jul 02, 2008 - 10:06 AM

I'm staying on the fence on this one.

Quote:

the last three things a company turns off before it closes down

The first three things that a company seeks to cut overheads on before it accepts that it needs to close down:-

1. Staff
2. Premises
3. Costs of manufacturing/providing service

I think that telephone charges, relative to any company, are small beer when compared to those three and therefore down the list. But still on the list.

What I can see happening is people getting in the "need to save money" mindset, and when that happens everything tends to get looked at, including small beer items.

Reply from x-console on Jul 02, 2008 - 01:52 PM

Quote:

What I can see happening is people getting in the "need to save money" mindset, and when that happens everything tends to get looked at, including small beer items.

I can see people getting into the same mindset. The problem for voip, in some situations, is the cap-ex required to get to a position where you are both improving your communications infrastructure _and_ reducing month-on-month costs.

Reply from dean on Jul 02, 2008 - 02:40 PM

Quote:

the cap-ex required

Agreed. Phone systems are typically amortised over what kind of period though? 5 years+ ?

There's also the rental option if the capital simply isn't available.

Reply from rgower on Jul 02, 2008 - 06:05 PM

Amortising for electronics is usually about 3 years, infrastructure can be as much as 10, (tip: Run cables to make it an infrastructure project). But to justify the costs you would normally look at half those times.

The big problem is that, at best, the money men are superficial when investigating costs. They see a big number and cut it, they don't look at why the number is there in the first place and the knock-on effects. Which is why there are so many outsourcing deals. After an average slash and burn exercise the only effect is that the costs have simply moved somewhere else and gone up.

Reply from PhoneTool on Jul 03, 2008 - 12:13 AM

Sadly "no."

Putting George in the Whitehouse for 2 terms was a route cause of the melt down. If VoIP was already ubiquitous it would have no impact on the pace of this disaster.

On the subject of VoIP I'm not convinced there is a significant ROI for any business that doesn't have a distributed operation. Currently the big pay back is on "internal" VoIP calls between long distance locations. While 80% to 90% of all external calls must go via the PSTN and most calls are external i.e to customers the savings will remain nominal.

Reply from ianplain on Jul 03, 2008 - 06:03 PM

Hi

I have to say that having been in the business over the last downturn in the early 90's the first thing to stop is cap-ex expenditure. Any system installed since mid 90's will do LCR and the rates are the same as possible with voip so customers have no need to forklift their system.

I am seeing a growth in voip enabled applications that facilitate savings but not voip for voips sake, and TBH as has been said phone charges are small beer.

Ian

Reply from middletn on Jul 03, 2008 - 11:39 PM

It's not about call charges, it's all about line rental. The savings we show customers relate to the removal of 10-15 pounds/line/channel a month. 8 lines (g726) = 1 bb line. saving: 70-105 a month or ~ 1,200.00 a year.

Stick a Patton box in front of an existing non voip system for approx 350 and there are real measurable savings to be had.

Regards

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