By Sharla Sikes

Initially, VoIP attracted customers due to its price. Nearly every provider was offering rates at a fraction of the cost of traditional telephone providers, some with unlimited long distance.

There were some glitches as networks got overloaded, but overall most subscribers seemed happy with the service, as VoIP user numbers grew. Then the major broadband internet providers joined the game, offering package deals with broadband internet and TV services. Smaller VoIP providers suffered.

Then Sunrocket folded.

Quite a few VoIP customers got a little nervous when one of the industry’s largest players left 200,000 subscribers without phone service, and without notice.

It looks a little gloomy for VoIP providers.

The answer is in applications.

By offering application services with voice infrastructure, VoIP providers can continue to offer tempting deals to customers, especially businesses.

Cisco Systems offers a small-business VoIP system; Microsoft recently unveiled voice specialization and has plans for unified communications solutions; other long-term, big-name players offer attractive solutions and packages. More are expected.

“It is more competitive. The IP telephony market is definitely changing,” says Jeffrey Schmidt, president of SOTA Technologies, a 3Com partner in Coshocton, Ohio. “We’re seeing pushes from Microsoft and Cisco toward thinking about VoIP as an application on the network vs. as just a box.”

VoIP providers and partners will see an “inevitable” move toward applications, with the top players who will emerge being those who embrace this new model in the industry. Companies like Cisco are investing heavily in design guides, training and financial incentives for its partners who move toward unified communications.

“Application integration is the story, tying VoIP with things like messaging, presence and CRM,” says Dave Casey, principal at Carrollton, Texas-based Westron Communications. “In professional services, customers like law firms, medical and CPAs—where they attach the cost of people to particular cases—we can show that they’re losing billable hours because they’re not billing for phone calls made or messages back and forth.”

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