Show Me The Money In VoIP - Small Business Services
November 28, 2006Show Me The Money In VoIP - Small Business Services
With all the innovative VoIP companies popping up, it’s hard to keeptrack of them all, let alone the ones getting venture capital. One suchcompany is the Canadian-based Natural Convergence,who recently acquired US$10M in Series “C” funds. They’ve been inbusiness five years, serving SMBs (Small and Medium Businesses) inNorth America, parts of Europe and the Caribbean. [Light Reading].
ThoughNatural Convergence has only 10,000 active users, they’re catering to aVoIP niche that many other companies have been ignoring: the SMB market. And the “Long Tail”theory applied to IP communications suggests that in terms ofenterprise sales, the money might just be in the SMBs. This is simply anumbers game: take the sheer volume of SMBs, multiply by the highexpected conversion ratio. Even inexpensive IP PBXes (i.e., underUS$5,000) will generate a profit by volume.
On the other hand,the conversion rate of larger businesses and enterprises will likely besmaller, as they have more invested in traditional communications. Thusa per head cost of conversion may be much higher, especially in lostproductivity if the implementation is stalled or runs into problems.