Net2Phone eyes the middle ground

Voice-over-Internet-Protocol provider Net2Phone introduced a package of services aimed at midsize companies on Thursday.

The service, dubbed Max Private Voice Network, is being sold through the company's Net2Phone Global Services unit and is targeted primarily at companies with 50 to 500 employees in multiple locations. The company said it feels the greatest opportunity to deliver Voice over Internet Protocol (VoIP) to smaller companies lies outside the United States, particularly in businesses with offices in more than one country.

"The midmarket has essentially been underserved for VoIP, as most of the focus has been on catering to the Fortune 1000," said Bryan Wiener, president of Net2Phone Global Services. "It's often much easier to implement the technology in smaller companies, as well, as most tend to have less-complex networks."

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VoIP allows people to make phone calls using Internet Protocol (IP), rather than traditional public-switched telephone networks. The technology requires a network connection and typically uses a PC with a speaker and a microphone to convert a telephone's analog signal into IP, and vice versa. Some services allow for use of a traditional phone receiver that plugs directly into a computer.

Net2Phone's Max Private Voice Network offers business users free phone calls within controlled IP networks and discounts on long-distance services, regardless of location or the private branch exchange (PBX) infrastructure of their phone system. It essentially provides most customers with free interoffice calling, an attractive proposition for companies with international locations. Net2Phone estimates that most midmarket businesses stand to get about 40 percent of their phone calls for free using the service and discounts on the remaining 60 percent of their calls.

Wiener said that one industry with good potential for VoIP adoption is the international import/export business, where companies often have smaller operations scattered around the globe. He said Net2Phone would look to package additional services, such as voice mail, into future releases.

A number of other companies in the IP phone market have also launched efforts aimed at small businesses. Cisco Systems has released several less-expensive versions of its Internet phone software and services, and Mitel Networks has announced it was building a VoIP phone console that works with cell phones. Communications technology start-up i2 Telecom International has also put forward a Net telephony product designed for small companies and home offices.

At least one industry expert agreed that the midmarket represents a good opportunity for VoIP services vendors such as Net2Phone. Bob Hafner, an analyst at Stamford, Conn.-based Gartner, said larger companies expect high levels of service and functionality from the technology, whereas smaller businesses usually view VoIP as a way to cut costs.

"Large enterprises tend to have long-term capital investments tied up in their systems, while with small companies, it's usually not such a big deal to switch," Hafner said. "Midmarket customers are probably more receptive to the idea that there's good potential for savings and ease of management."

Net2Phone said the Max Private Voice Network package is already up and running in roughly 20 different countries. The Newark, N.J.-based company intends to market the service via its reseller network, which includes corporate bandwidth providers and PBX resellers, rather than sell it directly to customers.