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Small Business Phone Systems: Then and Now
The internet sees momentous change seemingly on a yearly basis, so imagine trying to conjure up a vivid mental image of how it was back around the end of the last decade, in 2009-2010 period. Think of the simpler websites, the (weird) chatrooms, the super niche-dedicated forums and the legitimately fresh feeling of social media (it sure was fun to follow people like Shaq on twitter in those early years!).
Commercialization hadn’t yet swept over the entirety of the World Wide Web and browsing history didn’t seem fully synchronized with what ads you saw and search results you got. In 2019, things simply feel like business as usual, with the clouds of internet marketing perpetually looming overhead, following you everywhere. It can make buying services and software feel like a forced necessity rather than an opportunity. Over the last decade, small business phone systems have taken off, going from something you should have to something you must have.
The good news however? The small business phone system and VoIP industries have learned a ton over that time, and have dramatically increased their services and offerings to the point where they actively work to save you time and money.
Back in 2010, the current iteration of MightyCall essentially didn’t exist! Current popular VoIP providers like Jive and Ooma weren’t up and running at any functioning capacity either. RingCentral and Grasshopper, among others, ran the early show as VoIP was experiencing its first ginormous wave of new users.
(And even though there are literally hundreds of providers to choose from nowadays all competing for the same pool of business owners/users, does not mean the industry has changed all that much. There was never a “best small business phone system” or “best voip system”, and there still isn’t today. Tastes and reasons for use still dictate who is happy with what system.)
Regardless, in this article we’ll review the general market and atmosphere for small business phone systems and VoIP back in 2010, and what the main differences today are.
While this is a few years before the start of our current, soon-to-be-closed decade, it’s hilarious and captures the general mood of advertising ten+ years ago; behold, Vonage, industry revolutionary!
That commercial actually wasn’t selling business phone systems, but rather home phone systems, which have taken off in equal numerical measure, but less financially-important measure when compared with VoIP for business.
A few stats paint a picture of just how drastically VoIP exploded this decade—and back in 2010, it already had outgrown the feel of simply a niche product. In 2010, there were roughly 62.6 million smartphone users in the U.S.; this year, in 2019, that number sits at 265.9 million—an increase of over 400%.
As smartphone have revolutionized modern life, people have smartly looked for ways to cut communication costs; in the home, that means moving on from outdated and often overpriced landlines, while for business, that means shifting away from phone hardware and simply to using various software on a smartphone or computer.
Between 2010-2018, residential VoIP phone lines jumped from 28 to 76.6 million, while business VoIP phone lines ballooned from 6.2 to 41.6 million—a 670% increase. This increase did not come out of nowhere either—everybody knew VoIP was game changing. Google launched Google Voice in late 2009 (as well as a much less successful Android equivalent service, Gingerbread, in 2010). Microsoft bought Skype in 2011, and although they’ve yet to fully transform Skype into a business phone service, its impact on VoIP cannot be understated.
Still, back in 2010 hardware was still a focus for even small business phone systems. Check out Vonage’s website back in 2010, advertising their web adapter front and center as the engine that made their VoIP go. Or see Ring Central’s website in 2010, touting an entire office phone setup and fax as two of their three offerings (alongside a half-baked mobile phone system that never really took off for the company, relatively speaking).
Beyond the shock of just how slimmed down and clumsy-looking websites were at the beginning of the decade, the marketing from two of the biggest providers of business phone systems revolved around hardware and not the service itself.
Even looking on the other side of the coin, at Grasshopper back in 2010, pushing their software in lieu of hardware, you notice how streamlined things were. Grasshopper was selling its service to thousands of businesses even then, before proper softphone solutions (being able to open up the software in a browser on your computer) had gone public. Heck, things were so simplified and democratic that Grasshopper didn’t even have long-term contracts yet!
By 2010 these systems had become regular, but not exactly commonplace, so whenever people wrote about them online, they had to explain what VoIP systems could do as simply as possible. Gene Marks, a journalist who had spent nearly two decades writing about various tech topics, routinely covered VoIP at Forbes. Sharing a success story of a Cincinnati-based small business owner named Nikhila Rao, he quoted her on what the biggest difference was between her old antiquated phone system and her new, VoIP-based system:
“Whenever a customer calls, they’re sure to get hold of a live person—or at least leave a message for the right person … we were never able to do that before.”
Of course, something else in that article sticks out as a nonstarter for a small business phone system today:
“Through a third-party vendor, Rao purchased a “Voice over IP” phone system, including software from Cisco (which routes the calls and plays nicely with her existing Windows operating system), as well as phone units for each user. With VoIP (the “IP” stands for Internet Protocol), calls travel over data networks like the Internet, rather than via traditional phone lines that are expensive to maintain. Total cost of the installation: $12,000, financed over three years–not a trivial investment for a small company in a recession, but one that continues to prove its worth.”
No small business in its right mind would pay even half of $12,000 nowadays for a VoIP system.
Still, Marks routinely touted VoIP, doing his best to simplify the ins and outs of the system and why it would save business owners—small and big, alike—money. Here he is breaking down what to expect of VoIP’s basics:
“You call our toll-free number. An automated attendant answers the phone (I could change the voice here, but the guy who answers sounds Southern California mellow, and in my business we need our clients to be mellow, too). You’re given the choice of “sales” or “service” (I could offer other choices too but really, what else is there in life?) or you can choose the dial-by-name directory. You can leave a message. If you wait to get me on the line, the call is automatically routed to my cellphone (I can choose to route calls to whatever number I want).”
It wasn’t so scary and intimidating when people could get a glimpse inside of the tech. Lots of the terms and acronyms sounded complicated, but everything was manageable. This campaign to demystify VoIP technology is what took it from simply growing in the 2000-2009 decade to dominating this decade. That domination happened on a dime as well, with telecom giants like Verizon and AT&T shifting tactics and soon thereafter making decisions often factoring in the affordability and ease of VoIP.
After Hurricane Sandy destroyed the majority of existing PSTN infrastructure in the New York area, Verizon wasn’t terribly perturbed. Writing about the end of the traditional wired telephone network in 2013, Larry Downes noted,
“Verizon isn’t rebuilding destroyed PSTN networks because they are cruel, but because there are already better options. Indeed, natural disasters aside, most Americans have already made the switch to digital telephony [VoIP], and have done so on their own schedule and for all the right reasons.”
Factoring the many thinkpieces and tech reviews like this one, the past decade has been one long, drawn-out eulogy for traditional phone networks and technology. The lead up to where we are today, on the doorstep of 2020, has seen VoIP and small business phone providers wise up and embrace VoIP software itself rather than gimmicks and hardware, evident by how formerly hardware-based systems now have serious software offerings and how those that have stuck with hardware have carved out their niches in the market and marketed therein.
It is no coincidence that nearly every major small business VoIP provider offers “unlimited” minutes nowadays—unheard of ten years ago, when charging per minute was a main driver of revenue for these companies. The telecom giants have migrated most offerings to various forms of “unlimited” as well, in an effort to retain customers amidst a hyper-competitive business environment that has dozens of different communications solutions. (This variety is also why the most powerful companies in the world, like Microsoft, Facebook, and Apple, often buy emerging start-ups built on intriguing technological premises—they have the capital to throw stuff at the wall and see what sticks as a viable alternative to their competitors’ offerings).
Now, in 2019, VoIP has had more features added—though not an overwhelming amount—and old features tightened for more efficient use. With the technology shifted toward smartphones and easy to access software to embrace the influx of tens of millions of users in the U.S. alone, the industry has risen to the top of the global economy. The next decade is sure to witness some lofty accomplishments in VoIP.
What distinguishes the last few years of this decade for VoIP then, are the marketing tactics that have emerged. Now familiar to nearly everyone, gone are the simple explanations by providers and the articles championing the technology on major websites. Now, every provider has biased reasons not for why you should get VoIP—they know you’re going to need it—but why you should get VoIP from them.
That rat race, all the more frenzied with the money faucet pouring out dollars at full blast, has created an atmosphere where small business phone providers are trying to push the envelope to get as much as they can out of each customer. In the past few years, anti-consumer trends like price hikes and long-term contracts have become the norm.
With hundreds of legitimate options, it feels strange to suggest VoIP has taken on tendencies of a captive economy, but the industry as a whole has taken its newfound importance to an uber-capitalist level, exhibiting business practices that will not endear the major providers to the public—there’s a reason people make jokes about AT&T, Verizon, et al.
VoIP’s rise, and what it has done for small business phone systems, is remarkable. Even as predictable as it was, many of the “next big things” flame out before leaving a mark on the world. VoIP hasn’t—it has carried a decade worth of momentum and legitimate growth into business influence and even necessity. The industry has settled in as people have gotten used to it, and what happens over the next decade depends on the respect and service VoIP providers give those consumers now that the honeymoon phase is over.
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