VoIP Market Expansion Has Implications on Accountants

Voice Over Internet Protocol (VoIP) telecommunications is becoming a more significant issue for accounting firms and their small business clients. Among the newest entries into the fast-growing market is a service designed especially for very small businesses, launched by a joint venture of VoIP services provider Covad Inc. and telephone maker Vodavi Technology Inc.


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Separately, VoIP market leaders are predicting that in the near future VoIP technologies will be embedded in core business software applications, including accounting packages, that are Internet-based. “VoIP becomes part of Web services, opening the communications platform up so any business application inside the enterprise can benefit from making it easier to connect with other people,” Todd Landry, vice president of marketing for communications services vendor Sphere Communications, said as part of a panel discussion on VoIP trends at the Internet Telephony Conference and Expo in Fort Lauderdale, Fla., at the start of this year.

While standard telephone systems use "circuit-switched" technologies that provide a dedicated path from caller to receiver, VoIP systems provide for computer-based calling by converting voices to data, that is sent over networks, and is converted back to audio upon reaching their final destination.

A typical use of a VoIP integration in an accounting application would include a videoconference between an accountant at a client site and an audit manager at the firm’s main office, according to “Network World” magazine, which covered the Telephony Conference and reported Landry’s remarks. In another bullish prediction of VoIP blending with software applications, the report quoted Elliott Zeltzer, global telecommunications manager of General Motors, saying, “We’ll go all IP, then we’ll converge.”

That convergence of VoIP into software applications, according to Network World, will be in arrangements far more sophisticated than the current state of the art for smaller businesses’ VoIP systems—the Private Branch Exchange (PBX), which is essentially a company’s internal telephone system integrated with data networks.

The Covad-Vodavi joint venture, for example, is delivering a package that combines Covad's PBX service, designed for small businesses, with a line of Vodavi phones that employ internationally recognized VoIP standard protocols. "Our goal is to transform business communications through cost-effective technology solutions," said Prakash Nagpal, product strategy manager for San Jose, Calif.-based Covad’s. "The 6800 Series is a welcome addition to our hassle-free VoIP service for small businesses." Vodavi is based in Scottsdale, Ariz.

In other recent VoIP market expansion, Internet portal Lycos, on March 27, launched a Windows-based program that provides free calls to users who sign up for certain promotional offers from Lycos. The phone application also offers movie previews, PC-to-PC video calling and text messaging.

VoIP has been steadily growing since the first PC-to-PC telephony applications were introduced in 1995. The SearchEnterpriseVoice.com voice communication industry portal reports that industry analysts Frost & Sullivan predict that worldwide revenues for Internet protocol-based PBXs will grow to more than $ 9 billion in 2007, from just $1.96 billion in 2003, and there’s also speculation that VoIP will someday account for more than half of all telephone calls.
~JC

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