Don't Rip Your Heart Out

One VoIP vendor says that an enterprise's sense of self-preservation will lead it to embrace evolutionary change rather than a total PBX extinction.

by Alex Goldman ISP-Planet Managing Editor [March 7, 2005]

Bellevue, Wash.-based AccessLine Communications is announcing its SmartVoice line replacement service for small, medium, and large enterprise customers. The service allows the business to keep its legacy phone equipment and to continue paying per line instead of switching to per seat pricing.

Kent Hellebust, AccessLine Chief Marketing Officer, says his company's advantage is that owns its own source code, either because the code was developed in house or because it was purchased later. He says this allows the company to control its pricing and also to control upgrades and software changes. He says competitors have trouble keeping up with software changes by third parties and also have difficulties with integration when they use software from more than one third party provider.

The code he's talking about isn't just the VoIP software itself, but also the billing and OSS functions. Control over all functions allows AccessLine to write a web-based console for end users, for business admins, and a separate console for resellers.

"Channel partners such as SAVVIS have a higher order need than the individual business customer. We call our console for channel partners Service Builder for Resellers," he says.

The pricing is right
Hellebust says that most VoIP companies base their pricing schemes on the systems imposed on them by their vendors, making life more difficult for customers. "Most VoIP companies are paying licensing fees on a per seat basis. They have to make sure they're covering their costs, so they have charge on a per seat basis."

"But their current [POTS] service is on a per line basis," he adds. "Our offer is on a per line basis, so they can do a direct comparison. That's not easy with a per seat quote. In one office, a line may support two or three seats while in others a line may support eight or nine. We offer $45 per line, while many per set quotes are $35 to $50."

Beyond the per line versus per seat price savings, Hellebust says the new program offers significant equipment price savings. The company still charges a $350 install fee plus a $200 equipment fee for a single piece of equipment that sits at the corporate PBX and acts as a bridge, connecting the legacy phone equipment to the Internet and through the Internet to AccessLine's SIP gateways.

The problem this offer is addressing was raised at ISPCON's ISP-CEO session, where one attendee complained that offering a rip and replace service was a hard sell only because the per seat cost of an Internet phone could run to $400, with labor. A medium sized, 100 seat office would be unwilling to pay a sign up fee of $40,000.

Hellebust has a clear idea of what niche his company is targeting. "We key on businesses with three or more locations that do a lot of interoffice calling. We can sell down to small businesses, and our studies suggest that customers have a minimum of eight employees."

In other news
The company is also announcing a partnership for an E911 implementation (for which AccessLine does not own the code). Hellbust says that Longmont, Colo.-based Intrado's E911 implementation is technically superior and that's why AccessLine chose it, but ISP-Planet suspects that pricing was also a consideration.

As VoIP becomes more standard, more a part of everyday life, we expect to see more solutions to the problem of how to sell to customers who don't want to junk their legacy hardware. AccessLine's answer is a good one, but it's not the only such answer out there.

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