Customers considering hosted voice need to know who their providers are. Let's start with the basics:

Today, I think hosted providers are capturing the 1-10 station segment. In my prior posts about SMB Failures, statistics report on the dismal failure rates of these small businesses. Since these companies fail at a high rate, hosted services for small numbers makes sense.

For the Startup, it really makes more sense to build a cash reserve. More often than not, what really happens is the burn rate of cash leaves companies high and dry. When they call on their banks and lines of credit, about 30% of SMBs remain underfunded. Those successful in getting credit may prolong the death of their companies, or they might recover. Those that recover aren't necessarily more profitable or viable, because interest erodes their profits and increased output isn't a guarantee for more revenue. Then, because the SMB companies that do grow, often grow at greater risk of failure--and they do fail more as they age. This sounds pretty glum but it’s the nature of SMBs—however, it's not the nature of all SMBs, just most of them.

The 3% churn rates reported to me by several hosted providers as being: "industry average--and normal" will not likely be as tolerable a rate for providers with customer configurations above the 10 station mark. The SMB with 10 or fewer stations can pick and choose, even change providers if they can manage the porting process and any trials along the way.

Customers considering hosted voice need to know who their providers are. Let's start with the basics:

* What are your financials? Where are your financials?
* Do you "own" that "Enterprise class" data center or are you sharing it? How many data centers do you own or share and what are their locations??
* Explain your load balancing and or aggregation of services. When calls are dropped, latency in ringback (call processing), and high-and-dry (lack of resources), are experienced by customers; how are you going to improve your services and when? What recourse do SMB retail customers have??
* 30-Day free/no obligation test periods are good, so why not include the equipment too under this FREE no obligation trial??
* Can the hardware purchased be used with any hosted provider or other PBXs or open source solutions? Will the hardware need recertification and if so what are the costs??
* Does your contract and SLA have a bail out clause when customers cite a number of occurrences impacting their service? Is there a number of service incidents deemed unacceptable, or are performance criteria based upon downtime only? What is the compensation for service disruptions??
* Are voice features open source, home grown or hybrid? What happens when they are upgraded, patched and changed??
* Do on premise station-to-station (Intercom) calls consume bandwidth or are they billed against a call package or call allotments/calling plans??
* How do you traffic-engineer all required resources to meet demand??
* What are the components of your solution, and specifically which components of your solution are home grown??
* Outside of providing the voice services, what are the options and other billable charges?

Hosting voice service is, as I have found, very lucrative. Providers range from retailers, resellers, resellers using a white label, resellers in the basement, resellers using their own PBX, soft switches targeting niche markets, and other varieties of services. Their capabilities and track records carry the same broad range, meaning you really need to check the provider and verify what you’re getting into.

Hosted voice services today can be a smoke and mirrors experience. What hosted voice providers don't advertise is what will ding most businesses.

The assortment of voice services varies and when it comes to the SMB, it seems that anything that remotely sticks, flies. I've personally called on numerous vendors advertising their wares and have been called on by a few wanting me to sell their stuff.

In my prior report, Understanding the SMB, I noted that the 1-10 station market is what I believe to be captured by hosted voice providers. This market can be very profitable and even more value driven when (if) the providers interconnect with other cloud services.

What I won’t say about hosted voice services is that, "I'm not interested." The problem is my interest isn't held by any of the providers. I'm going to report on this later and until then, hosted providers can consider this an ongoing and open invitation. If you think you've got what it takes to deliver acceptable voice services, then I'd love to hear from you and the answers to my basic questions above.