Startups | A Big Strength of VoIP

Innovative new technology may fall in one of two categories – those that a particular industry can benefit from (often in terms of improved efficiency or effectiveness) and those that revolutionize the way all of them function.

VoIP definitely falls into the latter since business communication is a requirement for every type of organization in any field. With every passing day, more companies are making the transition to VoIP and replacing obsolete systems with modern, IP-based communication models.

The attractiveness of VoIP extends far beyond inexpensive prices and sophisticated features. VoIP players continue to innovate and new tools and services are being launched even as we speak.

Perhaps the biggest strength of VoIP – especially when compared to traditional phone carriers – is the fact that the number of VoIP startups is exploding.

Why are startups important?

First of all, startups are a vital sign of an industry that is growing and fostering innovation. By definition, startups would not be competing with established players who are dealing with a mature technology (unless it is to disrupt the market with newer tools).

Startups are catalysts for invention as they are able to take risks which the bigger players cannot afford.

Second, startups encourage competition. Incumbent players are forced to compete with nimble newcomers, resulting in better service or products and lower prices for customers. Startups compete with each other as well, contrary to popular perception that they only go up against entrenched companies.

In a similar vein, the entry and existence of several startups shows the potential of an industry in terms of growth and market share. Startups can take the risks that others won’t, and fail or succeed on the strength of the platform itself, providing a measure of long term sustainability.

What do startups bring to the table?

One important reason for the growth of VoIP startups is the low barriers to entry. VoIP business models do not require billions of dollars in investment (infrastructure, human capital etc) but demand technological innovation.This means enterprise customers have more choices readily available at any time.

The presence of startups is good for niche industry segments as well such as a specific vertical or small & medium enterprises. These companies target a given segment that may have been ignored by larger incumbents because of low profit margins or inability to provide customized services.

Quite often, these startups show that those niches can be profitable provided the vendors can tweak the business model or product/service suitably.