News

Microsoft Hits Target with Small Business IP Phone System

Response Point offers companies with fewer than 50 employees a right-sized phone system at the right price.

• By Joanne Cummings
• January 01, 2008

It may seem surprising, but one-third of small businesses with fewer than 50 employees currently have no phone system in place.

Instead, these firms cobble together two-line switches from consumer stores such as Staples and Best Buy, purchase cell phones from a kiosk at the mall or sign up for bare-bones services, like call hold or call waiting, from their phone company and make do.

Others are stuck with antiquated key systems that feature a hold button, but that's about it.

"If the old key systems are a bicycle and most of the advanced voice over IP systems are closer to a jet, we need a fuel-efficient car to shuttle the kids to school and pick up the groceries-we need something in between," says Greg Sartz, president of General Networks Inc., a Microsoft Registered Member and Small Business Specialist in Fort Collins, Colo. In the past, Sartz has had to downsize larger IP systems, like the 3Com Corp. NBX, to fit the needs of small businesses, something that was less than optimal in terms of both features and price.

But today, he's selling Microsoft Response Point, a software/hardware IP phone system developed by Microsoft and available from value-added resellers D-Link Corp., Quanta Computer Inc. and Aastra Technologies Ltd. Response Point is designed specifically for very small businesses, providing just the features they need at a price ($5,500 for a 20-phone system) they can live with.

"Response Point is just a smaller-size system that has the core set of basic features small businesses need," Sartz says. "You can pick up a call, transfer it, push a voice mail into Outlook e-mail and have a simplified auto attendant."

One feature of Response Point that goes beyond the basics, however, is its state-of-the-art speech-recognition capabilities. Users can transfer calls simply by hitting the transfer button and saying the name of the destination person. "You don't have to remember to press star, star something and a code or have to look up how to do it on a 10-page cheat sheet taped to the phone," Sartz says.

In addition, with the auto attendant, incoming callers can simply say the name of the person they need to speak with and be transferred. They can also ask simple questions, such as a business's hours of operation or location, and receive the information, without the need for human intervention.

"You don't have to ask the exact questions," says Jeff Smith, senior product manager for Response Point at Microsoft. "You can say, 'When are you open on Saturday?' or, 'What time do you close?' or, 'What are your office hours?' and you'll get the right answer each time."

Businesses wanting a more human touch can also set the system to work with a human receptionist.

For now, Response Point works only in single sites over a company LAN, so businesses looking to link up branch offices are still stuck with older options.

The bare-bones system, which consists of a built-in analog telephone adapter (ATA), secure gateway and phones, is also easy to set up and maintain. Users simply install the administrative software on a Windows XP or Vista PC.

"An average PC user with no special training or networking knowledge can add new users to the system or make system changes in minutes," Smith says.

Still, there are a couple of features missing. Currently, the phone software only supports 10Mbps or 100Mbps connections, while Sartz says that most laptops and computers currently support 1Gbps. "That limits you to 100Mbps for both phone and data communications."

Another missing feature is the lack of official support for third-party products aimed at small business users, such as Bluetooth headsets.

The Competition
Smith says that Response Point's main competition is "inertia," because most businesses with fewer than 50 employees are currently making do with nothing. Sartz agrees but also says that IP systems from 3Com, ShoreTel Inc. and others may have a play in small businesses.

"Feature-wise, the 3Com NBX is far superior to Response Point; it has hundreds," Sartz says. "But most small businesses don't need all those features. They need to weigh the features available with the price they're willing to pay. In most cases, but not all, Response Point fits better."

One caveat is that Response Point is a 1.0 release. "You have to tell your customers that this product is brand new," Sartz says. "If you've done anything with Microsoft, you know a 1.0 release is not going to be completely smooth or perfect," which is something that gives small business users pause when they consider it for mission-critical phone service.

"But it's like any other decision a small business owner has to make-they have to weigh the risk versus the reward," Sartz says. "And the long-term reward in Response Point is its simplicity." Microsoft's Smith adds that Response Point went through a rigorous 18-month beta program that worked out most of the kinks in the product.

Marketing and Sales
Because this is a new market for Microsoft, it has gone out of its way to make Response Point attractive to partners. The company currently offers a five-part series of webinars on the Partner site for free and is currently offering a $95, one-day, eight-hour training class in at least 17 cities throughout the country.

"They've done nothing short of an outstanding job on the partner side," Sartz says. "For the other phone products we carry, we've had to pay thousands of dollars over and over for initial training and retraining. [Microsoft's program] has been great."

Microsoft is also making available through June 30 special financing to small businesses that purchase Response Point through a Microsoft Partner.

Partners may be uneasy about the fact that Response Point is so easy to set up and manage. It's rumored that Response Point may eventually be available in retail stores, but Smith says Microsoft doesn't currently have plans to distribute it that way. Still, many small businesses may feel that they don't need managed services from a partner to run the system.

Smith and Sartz say that's not the case. "Even if something is very easy, if I'm a hedge fund manager or a dentist, I still would prefer to have someone else do those tasks," Smith says, "because I have to see patients or make millions of dollars in trades every day. I don't have time."

Sartz says that small business owners also need partner expertise to get the most from the system. "Yes, if you can open a box, plug in cables and follow the bouncing ball of next, next, next on your install, you can put this system in place, but is it optimal?" he says. "Partners who have experience and understand how to work with the carriers and how to integrate [Response Point] with appropriate training and an appropriate backup are important. If your analog lines go down from the phone company, what's your backup? Are you going to try and tie this with a third-party product such as a cellular gateway? Then, if your analog lines go down, the Response Point system could actually use a cellular gateway to make and receive calls. Scenarios like that will be important."

Where Sartz sees problems is in the ease of becoming a Response Point partner. "Too many partners can sometimes lead to low-quality deployments" when partners with less optimal VoIP expertise rush in, he says. "We've seen that in the past, so I'm hoping that's not the case here."

The Bottom Line
Microsoft has hit the sweet spot for small businesses with Response Point. It has the right mix of features and price to let small businesses implement a professional IP phone system, without the overhead of managing and maintaining something designed for far larger enterprises.

With one-third of small businesses currently using no phone system at all, the market is wide open for partners. Now, your customers can look to you not only for traditional data services but also for their voice needs.

And that's a win for partners and customers alike.