Why Vonage Has Abandoned The SMB…

Have the SMB Ambitions of Vonage Disappeared?

Paul Kapustka has an excellent post about the missing offerings for the SMB from Vonage. I have been working on a piece about Vonage and their SMB opporutnities, but since that is not ready to go, here are some thoughts about the lack of SMB offerings from Vonage.

What Caused Vonage to Focus on Residential Service and Neglect the SMB?

The reasons Vonage “dropped-out” of the SMB market are three fold:

1) In 2005, when Vonage had a true SMB offering, they were “early” to the party. In 2005, VoIP was still a bit of a mystery to the SMB, especially the ones that Vonage was targeting (25 seats and under). Without a solid reseller channel (integrators, phone VAR’s, etc.)that had a good handle on the technology, it was pretty tough for them to grow.

2) There is more liability and technical support required for the SMB customer than the residential customer. Mission critical communications requires different types of support personnel. Chances are, being a large residential provider, they were not staffed to handle the type of inquiries and issues that happened.

3) It is tough to be all things to all people all at once. It is tough to win “two drag races” at the same time. Vonage picked the path of leastr resistance at the time (residential) and drag raced to the lead (however temporary that will be). They could not due both, so they dropped the service that required higher levels of support, accountability, and service in hopes of winning one race.

So Where Can Vonage Go From Here?

Now, more than ever, I think Vonage is in a great position to make a move into the business space. They already have a brand name, distribution channels, and deals with equipment manufacturers. They would need to staff accordingly, and build in-roads into local var’s/integrators, but with their brand name, marketing prowless, and willingness to spend, that wouldn’t be too hard. Question is whether they launch a hosted or SIP trunking type service…