VoIP for SMB: A conversation with Speakeasy

My conversations with vendors, suppliers, and partners continues with a telephone call (a traditional POTS telephone, in my case) with Bruce Chatterley, CEO of Speakeasy. VoIP, either on its own or as a key component of unified communications, is an important technology for many SMBs, so I thought it would be interesting to talk with a company that specializes in providing service for smaller companies. I've bee

My conversations with vendors, suppliers, and partners continues with a telephone call (a traditional POTS telephone, in my case) with Bruce Chatterley, CEO of Speakeasy. VoIP, either on its own or as a key component of unified communications, is an important technology for many SMBs, so I thought it would be interesting to talk with a company that specializes in providing service for smaller companies. I've been aware of Speakeasy for some time, but I still learned new things about the company -- some useful, and some merely quite interesting.

Chatterley began by telling me that Speakeasy was originally founded in Seattle as one of the first Internet Cafes in the city. Customers began to come in asking more for technical consulting than beer and lattes, so the company spun off the café and started a broadband ISP. Based on their experience with cafe users, the new ISP's initial focus was on power and expert users. One of the company's initial differentiators was a series of open policies – they didn’t mind customers running servers or sharing connections over WiFi, for example.

Bruce came into Speakeasy with three big-picture goals: he wanted the company to grow; to stay on a sustainable path (sustainable from a long-term business perspective); and to be profitable. He saw the residential broadband market going to commodity status starting in 04, and thought that Speakeasy couldn’t compete in the long term with the telcos and cable companies. The company decided to focus their efforts on the SMB market, with SMB defined as businesses with fewer than 100 employees. That has remained the company's focus, though the customer base has settled toward the small end of the market, with most of their customers having fewer than 25 employees.

As the company began the process of re-architecting the business to serve SMB customers, they rebuilt their network from scratch. While they have their own backbone, they decided to provide last mile service through a series of partnerships with companies like Covad, AT&T, Qwest, and New Edge Networks. From a strategic standpoint, they see the  ISP business becoming a dinosaur, and think that voice telephone service, now provided by VoIP is the center of the critical SMB infrastructure. To address the market they built a voice infrastructure with softswitches in Seattle, New York, and San Francisco. They also needed a way to sell and service to the customers in a cost-effective way: They conducted focus groups with customers, asked how they got their voice service, and heard that customers called a consultant – the “IT Guy” that they depended on for business services. Speakeasy built a channel of these folks. I was fascinated that the driving impetus underlying was a set of "single concerns": Bruce said that focus-group participants said they wanted Four Esses: A single provider for data, voice, and IT needs: A single bill for all these things: a single support interface – “one neck to grab” when something goes wrong: and simple, predictable, flat-rate pricing. It boils down to small businesses being unwilling (and, in many cases, unable) to chase down a bunch of different business partners if something goes wrong. It's not a hard lesson to get from small-business owners--it's just a lesson that (until recently) not many suppliers seemed to want to learn.

Speakeasy offers three basic components to customers: data services (dedicated DSL or ADSL), T1 or bonded T1; Voice services, with a variety of possibilities starting with home office lines, two kinds of business line – integrated service (for those with existing PBX or key system), or hosted PBX service, with web-based management and administration. These are both $19.95 per subscriber or line, for basic service plus a long-distance package. The third component is managed services—ability to take any server the customer might have, put it in their data center, and do full management of the server. This is generally on Speakeasy hardware, though they will do co-lo with customer-supplied hardware if the SMB wants to build that relationship.

Speakeasy isn't the size of the traditional dial-tone providers, but they have almost 20,000 customers and are growing at 21% year over year. Voice service is, in fact, critical to virtually all businesses, and there have been some notable VoIP collapses (SunRocket, anyone?), so asking about size and growth is a legitimate direction of inquiry when you're thinking about a VoIP partner. This is especially true if you're going to get both voice and data from a single source. Speakeasy would like to be that single provider, and Bruce points out that, If a customer gets both DSL and VoIP from Speakeasy, the company can provide QoS monitoring and traffic shaping on the line. They don't require the bundle -- they would just prefer to offer that "one stop" experience.

In many ways, the broad strokes of the services offered by Speakeasy are similar to those offered by many other cable, telephone, and third-party providers. The thing that did strike me, though, was the fact that Speakeasy has grown from an SMB, and is focusing on the SMB market--especially the smaller end of that market. I'm hearing more and more companies talking about their plans for the SMB market -- Speakeasy may well have a head-start on many of the VoIP competitors in this market focus.

I hope to have a chance to look at Speakeasy services as part of an InfoWorld review package later this year -- I'll keep you posted on the review's progress and on my experience with Speakeasy.

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