Fresh attitudes towards the adoption of new comms technology has boosted demand for pure and hosted solutions at the lower reaches of the market.

Smaller firms are now willing to seize the opportunities that technology offers them through the switch. Paul Bryce, Business Development Director at Node 4, commented: "I think these smaller companies are becoming more aware of how technology can impact on their business, on how communications platforms can impact directly on how efficient and profitable they are. This means people don't want the basic nuts and bolts any more, they want to be able to do clever things."

Part of the reason for this surge in demand for more advanced technology is the rise of numbers of people under the age of 35 becoming decision makers in UK business today, Bryce states. These people are more tech-savvy, have been brought up in a virtual world, and understand the importance of technology. This means technology is moving to the forefront of doing business, as an essential tool rather than as an option, he claims.

"People are looking to be more productive," says Bryce. "They want to connect to staff and customers better and they want the ability to work from anywhere, and they want a business system that can help them do that."
In particular, Node 4, which regards the small business market as 10 to 250 extensions, is seeing a push for applications that enable them to integrate more to CRM packages, and they are also interested in the presence element, Bryce states.

"You have to get to grips with new and emerging technologies"

Online Unified counts its small business switch market as up to 50 extensions. Neil Hathaway, Managing Director at Online Unified, says that over the last six months he has noticed that most Greenfield sites for this end of the market a going for IP instead of digital technology. Another strong trend he has seen is the use of a lot more homeworkers, resulting in higher sales for the business of soft phones. Hathaway comments: "One of our more popular options of late has been soft phones, to be used from a remote location. We've also seen a trend of more people getting call recording equipment."

Integrating systems to the desktop is a popular application trend that MTV Telecom is currently seeing in the smaller end of the market, according to Jim Robertson, Commercial Director at MTV Telecom. In addition, mobility applications, plus contact centre and conferencing centre applications are starting to see more demand, another key trend on the rise is sales of pure IP PBXs, Robertson claims. He says his business sells four main products, two of which, Swyx and Siemens, are pure IP PBXs. While the Siemens product is very new still, the established Swyx product is helping total pure IP PBX sales at MTV Telecom hit around 30 per cent.

Tom Perry, Marketing Director at Freedom Communications, who classes this end of the market as up to 100 extensions, says his company is also seeing far more pure IP systems going out the door now, as the technology is robust enough in the eyes of the end user. In desired applications, mobility, call recording and management, and also disaster recovery are doing well in the sub 100 market, Perry says. His business has also noted more competition from hosted solutions, so it is currently in evaluations of three hosted solutions to be able to offer one to its own customers. Freedom previously offered a white labelled service but that failed to take off due to the cost of the product, Perry says. Today, the cost of hosted solutions has come down sufficiently to make the service comparable over the lifetime of the contract to buying a system, which is attractive to smaller businesses that like the ‘hands off' approach to managing technology.

As for the credit crunch, sales of small business systems are being only temporarily affected by the market downturn, according to MTV Telecom. Robertson says that while there are plenty of orders in the market today, there has been a slowdown in the speed to finalise deals. This is resulting in lower sales and will continue to do so until the loop of slow decision making catches up on itself. He explains: "Bigger deals in the SME space, up to 250 seats, are definitely coming through. What we are seeing is at the smaller end of sub-25 seats, decision makers are holding off on sales. More often than not, that end of the market is sold on price, so they can wait for another month or two to see what interest rates do."

At MTV Telecom, Robertson says sales have been a little quieter than normal since Christmas, due to this slow decision making. He claims the business has had a good March, however, and that this signifies that decisions are starting to be made again. "If you have a requirement to do something with your communications, you can't really delay that too long," he says.

To continue to progress, resellers selling telephony systems to smaller businesses need to concentrate on networking to ensure the applications in demand work to business service levels, Bryce states. "Connectivity will play an important role, but if people keep connecting things together, quality of service will be even more vitally important to businesses. IP PBXs should be able to integrate all forms of communications, including voice, and it's important the network is right to support all that."

An open platform for the PBX is also crucial to ensure that smaller businesses can scale as they grow. Bryce adds that small businesses also need open platforms so they can take advantage of all the technological developments going on in the marketplace, and not just the developments of the manufacturer of a PBX that is locking customers in.

Challenges still lie ahead for resellers working at the smaller end of the market. Robertson says the main challenge lies in continuing to upskill in new and emerging technologies. Just because the battle with IP seems to be won, there are many new technologies out there that require even more work. "Just when you think you've got IP conquered, you can't take your foot off the pedal. You have to get to grips with and be able to implement other emerging technologies."