“VoIP vs. Digital"

What is the Best Solution for Small Business?

The VoIP system vs. the digital key system debate is very intriguing. Both platforms have their distinct benefits. At XBLUE Networks we have both types of system platforms included in our product plan. We made the business decision to develop and introduce our digital key system (45p Small Business Communications system) first for one very basic reason. We are convinced that digital key systems, in an overwhelming majority of applications, still offers the best value to small business (and to the small business system reseller as well, which is equally as important).

Let’s start with the benefits of VoIP. The one benefit that definitely has traction is the “sizzle factor of IP”. This certainly correctly conveys that the product is of the latest technology which is an immediate attention getter. However, the other supposedly substantive benefits claimed by VoIP proponents tend to fizzle out considerably. This is especially true for small business applications.

In almost every instance with VoIP systems, the same top feature/benefits are always highlighted. These are as follows:


Remote office: One unique benefit of VoIP systems is the ability to seamlessly mesh other branch offices communications without the need of PSTN lines and/or long distance charges (of course, the long distance expense benefit of VoIP is quickly evaporating as most carriers now offer unlimited LD with their service).

Still, seamlessly connecting remote offices is a real and valuable benefit. The problem is, most small businesses (easily over 90%) are single site applications. This renders this major benefit of VoIP as virtually worthless to the overwhelming majority of potential small business customers. Yet in almost all VoIP system sales literature remote office is consistently drilled as a “unique” system benefit of VoIP. This is a true statement, however, just as true is the reality that it is a “unique” occurrence when a small business actually desires this capability.

Remote Worker: This benefit has more substance for small business than the remote site application. Some small businesses do have remote workers, but again this is still a very small percentage of companies. Another application of this feature is a business owner who wants to stay in touch with his office 24/7. In this case, with VoIP the business owner could have a telephone extension from his office system in his home. However, most small business owners who have the need to always stay in touch find that their cell phone best meets this need. And, most digital key systems offer as a standard feature “remote call forwarding to a cell phone.”

Unified Messaging: This is a big one and has some wallop. At least it used to, until XBLUE launched our email delivery for small business as a standard feature of our XBLUE 45p system. This has virtually eliminated the unified messaging advantage of VoIP systems as the key benefit of UM is delivering VM messages to your email in-box (which we now do).

Some other VoIP benefits are as follows:

System administration: Combines voice and data network administration/programming. This is a big advantage for large businesses but again not too important to a small business. In a large business the IT manager is usually involved in the buying decision and centralized administration is very beneficial as “moves, adds and changes” are required on a daily basis. However, in a small business, this is rarely the case. Once programming is set-up and initialized changes are not very frequent. The “install and walk away” scenario for the small business system market is as true today as it ever was.

Calendar: This feature does not appear to provide any real benefit over Microsoft’s Outlook Calendar which is already prominently utilized.

Call Assistant: Most small businesses do not use a dedicated operator position. In fact, auto attendants are most common to distribute calls in a small business.

Call Queuing: Most digital key systems have some version of this feature as well but it is rarely used since most small businesses do not have a call center.

Now for the benefits of digital key systems:

Call processing features: Today’s digital key systems are loaded with call processing features that have been designed, developed and implemented over many years of experience working directly with customers for their voice needs. VoIP systems, understandably, have not yet caught up. These call processing needs are normally only discovered after an examination of each small businesses unique application. A mistake a new VoIP system customer often makes is they assume the new VoIP system will have all of the same features of their previous phone system. This is obviously not always the case as VoIP is primarily and simply a new call transport technology, not necessarily a better call processing solution.

External interface: Like call processing features these applications have evolved over time and much direct interface with customers. These can range from simple interface needs like analog ports for cordless phones, external page, door phones, physical contacts for external ringing or to open a gate. VoIP systems are beginning to address some of these needs but often some important external interface applications are not yet available.

Line appearances: In the key system market, customers have long preferred to have a direct button access/status for each line. In fact, this benefit is the origin of the name “key system - a key for each line.” Over the years several manufacturers tried to introduce small PBXs (which use line access “pool” keys instead of dedicated line buttons) into the key system space but to little avail. Small business customers like their key telephone with its direct line access and status. Many VoIP systems also “pool” the line keys like a PBX and do not offer a full benefit of direct line access for all lines.

Buttons: Even the manufacturers of key systems have fought this one for years and introduced lower cost phones with fewer buttons but with limited results at best. Customers still want their buttons. A key system mainstay, DSS/BLF station keys, are still prominent as a key benefit of small business telephone systems. Also, having direct access to features via a button is still a big deal; Voice Mail box, Paging, DND, Conference, Redial, Transfer, Headset mode, the list is long and differs in significance by customer. Like the situation with line appearances, most VoIP systems cannot match the digital key systems in this area of importance.

Total Cost of Ownership: There is no avoiding it; despite the claims of VoIP manufacturers the best communications value for a small business is still overwhelmingly a digital key system. The VoIP systems are beginning to get closer, and they will get there someday, but they still have a ways to go.

The Reseller: As a manufacturer or distributor, you can’t sell phone systems unless you have a reseller network of dealers. So far, in the small business space, the reseller is still predominantly the traditional telephony reseller (interconnect), not the data VAR. This dynamic is slowly changing as both the telephony reseller and data VAR begin to “crossover” but there are other reasons for this situation as well.

First of all, the telephony reseller is fully aware of all the issues listed above. Which means they are still convinced that at least for now and the near future, the digital key system is still the best choice for a small business. Add in the fact that the telephony reseller is far more comfortable and knowledgeable with the key system product (and also the key system manufacturer) and this provides a telling summary of the existing landscape.

Also, many data VARs have so far limited their “crossover to voice” efforts to larger business and system opportunities. Many of the smaller independent telephony resellers are still more than willing and able to provide a high level of quality service to the small business market.

In summary, at XBLUE, we embrace both VoIP and existing digital platforms. It’s just that when we had to decide which system would provide the best immediate results for our company, we let the market landscape and related prospects make the decision for us. This led us directly to the digital key system.

Our VoIP system will be released in the next few months which we believe will be excellent timing to offer customers a new choice. By developing and implementing a “balanced technology product plan” our future success is not bound by any specific projection of acceptance of a new technology or particular doctrine. We won’t have to subjectively force either side of the argument as others may to support a more limited R & D plan. And then we will let the market decide; on its own terms and indefinite timing, whatever that may be.

We believe the best approach is to place the prospects of our future success firmly in our commitment to deliver the best value to small business. And, that this absolute goal will become and remain clearly evident as the distinguishing feature and core value of XBLUE.