With hundreds of operators now offering VoIP services worldwide and dozens of new ones coming onto the scene practically every month, it has become increasingly difficult for a small to medium sized business to select the one service that best meets its needs.

Proving this point is a recent survey from the telecommunications consulting firm Savatar showing that roughly 70 percent of the SMBs which haven’t yet migrated to VoIP have almost no idea which service to use. The survey, which was sponsored by Lucent Technologies (News - Alert), Level 3 Communications (News - Alert) Inc. and BroadSoft (News - Alert) Inc., is the fifth in a series conducted by Savatar during the past 18 months.

The main problem, according to John Macario, president of Savatar, is that “providers are still not generating demand for VoIP with SMBs.” He said the predominant “wait and see” attitude among providers – “coupled with a quote process that takes more than a month” - is keeping them from tapping into the multi-million dollar SMB VoIP market.

Macario said as long as SMBs are properly educated about the benefits of VoIP, and have the various flavors of VoIP explained to them, each will sign on for the one that best fits its needs. The problem is that providers aren’t reaching out and helping SMBs make the best decision.

Furthermore, the survey shows that although a large number of SMBs are still hesitant to start using VoIP, those which have already signed up for a VoIP service are, in general, extremely satisfied with it.

“The good news is once SMBs are converted, they tend to be highly satisfied with VoIP, would recommend it to their peers, and are interested in buying complementary services, such as wireless,” Macario said.

Also on a positive note, the survey reveals that the SMB market is starting to see more rapid growth. In interviews with key technology decision makers from 560 companies, roughly 17 percent said they have already deployed VoIP, versus 15 percent in Q1 2006 and 12 percent in Q3 2005.

But those companies which still haven’t made the jump are very unclear where to turn for the best solutions. That’s not to say that they don’t have a general idea of what they want in terms of features and sound quality. It’s just that they have no real preference between a telco, a cable company or an ISP.

One thing that is clear from the survey, however, is that cost savings is the main driver of SMB VoIP adoption. As in Savatar’s four prior studies, conducted over the past 18 months, the SMBs have made their preferences clear: They want lower Total Cost of Ownership (TCO), lower Monthly Recurring Costs (MRC), and better system management from their voice systems. Sixty-nine percent say economic factors (TCO and MRC) are the most critical element of their decision-making process.

With most VoIP services offering basically same feature sets, for SMBs it really comes down to the cost savings and inherent advantages in systems management.

“Providers need to drive the economic and systems management messages home,” Macario said.

In addition, service providers should be capitalizing on VoIP’s high satisfaction rate. This can be accomplished through testimonials and case studies. The survey finds that of those SMBs which have already adopted VoIP, 69 percent would “highly recommend” the technology, while 22 percent said they would “recommend” it.

Furethermore, providers need to take advantage of follow-on sales opportunities with SMBs, especially for services like wireless. Fifty-three percent of those who have deployed VoIP want to buy wireless from their VoIP provider, and 43 percent of those who haven’t yet deployed it said they would purchase wireless from their VoIP provider.

Although SMBs are interested in consolidating their telecommunications spending, Savatar recommends providers move cautiously.

“While the fixed mobile convergence feature set is maturing, the market is not yet there, and providers aren’t yet skilled at selling basic VoIP products,” Macario said. “Trying to sell services based on the latest market buzz is like the computer industry trying to sell the latest and greatest processor when the operating system still crashes. Providers should focus on developing the SMB VoIP market first, and then up-selling their customers on useful enhancements like wireless.”

For more information about the survey, and about Savatar, visit www.savatar.com.

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Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.