VoIP for Small Business is a Ripe MSP Market

Managed service providers continue to see accelerating growth among small and mid-sized businesses, especially for IP communications. And for MSPs that already provide related services, adding a VoIP solution to your package portfolio is increasingly attractive.

The Changing SMB Technology Market

The SMB market will spend as much as $568 billion in 2017 on IT costs, and that yearly spend will increase by $100 billion by 2021. This increase is largely due to a sea change in how small and mid-sized businesses approach technology decisions. Increasingly, SMBs:

• Have more advanced IT requirements—once traditionally confined to larger organizations.
• Are more comfortable with the concept of the cloud and with cloud offerings.
• Outsource their IT needs to cost-advantage MSPs.

MSPs, in particular, are well fitted to meet the technology needs of the SMB market because small businesses tend to:

• Prefer bundled, hassle-saving packages.
• Require more support in onboarding and IT administration.

Land and Expand

Among MSPs serving the small and mid-sized market, product portfolios have been steadily growing. While in 2011 MSPs averaged 2.4 service offerings per customer, in 2018 that number is projected to grow to 7.5 offerings. This shows that SMBs are demanding more outsourced IT services and that leveraging a new service—like VoIP—across an existing customer base is a common way that MSPs increase revenue.

In 2015, the majority of SMBs were using traditional TDM phone systems that were on average six years old, while 70% expected to purchase IP communications in the next two years. VoIP adoption has certainly grown since then, and growth in small businesses contracting MSPs has grown alongside it: “71% of SMBs surveyed in 2015 are looking to outsource parts of their IT infrastructure,” according to Channel Futures.

This market is still largely untapped, however, as Channele2e estimates there are only 20,000 “truly successful” small business MSPs today. Some back-of-the-envelope math puts that at 1 MSP per 7,500 small or mid-sized businesses worldwide.

VoIP & MSPs

As telephony migrates away from devices to the cloud, more and more businesses will consider communications to be a core IT function best delivered via cloud applications. For any business contracting core IT functions like systems and network management to an MSP, including VoIP in their package is a no-brainer—both for the MSP and for the small business. MSPs handling telephony and VoIP for larger clients may want to consider adapting their offering to smaller prospects, and any MSP already finding success in the SMB market should strongly consider adding IP communications or a UCC product to their portfolio.

The Telnyx system is built for MSPs that want to provide high-quality, always-available communications for their customers. Contact our customer success team to learn more.

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