This interesting article on Top Tech News caught some attention this morning. I see it as opening a more focused question. According to the article, there are some 200 VoIP companies provding VOIP service to small and medium businesses. I can't find any qay to quantify 200 as an accurate number. I suspect the nubmer is much higher. But the point that these companies will, by necessity, undergo some consolidation this year to succeed in their market space does seem valid.

Business deman is on the rise, particularly among small and medium businesses. These are also businesses that appear to often be more prone to embraced managed services offerings. This industry segment is widely projected to grow from some $200 million in 2006 to somewhere as wildly optimistic as over $1 billion in 2009. That's what I would call optimistic euphoria and a dangerously wild projection. I think it's likely based on apples-to-oranges comparisons. That's often the case.

What's clear is that both growth and consolidation are on the horizon for many VoIP providers. 2007 is shaping up to be an exciting year, and I anticpate a fair amount or partnerships, mergers and acquisitions in the provider space that really targets the SMB market.

Business Customers Next Target for VoIP
The VoIP industry for small to medium-sized businesses -- companies with roughly 5 to 100 employees -- is forecast to grow from just less than $200 million in 2006 to nearly $1.3 billion in 2009, according to the Yankee Group market research firm. "The business space is just starting to pick up," said Jeffrey Pearl, co-founder of Denver-based VoIP provider IP5280, which launched in January 2006.

A major consolidation of Internet-based phone service providers is expected this year, with a variety of providers seeking to become a national leader in serving businesses.

Dozens of voice over Internet Protocol companies that target business customers have launched in the past two years, but no major brand has emerged like Vonage has for residential customers, industry observers say.

Vonage, based in New Jersey, has roughly 2 million customers. Business customers have been slower to adopt the technology. That's expected to change.

There are about 200 VoIP companies across the country that provide services to small to medium-sized businesses, according to estimates by Franklin Court Partners, a Littleton, Colo.-based business consulting firm.

"A lot of companies have sprouted out around the country," said Scott Chandler, managing partner of Franklin Court Partners.

"You'll see that stopping (this) year as the consolidation happens."