James J. Murphy
Milwaukee School of Engineering
Allworx is a company the makes phone systems for businesses. Their product integrates traditional POTS service (Plain Old Telephone Service) with the latest technologies that create the Internet. Combining the old and new technologies creates a new solution in the telecommunication industry known as VoIP (Voice over Internet Protocol). Using VoIP technology, Allworx sets itself up as a voice solutions provider for businesses. The VoIP solution allows business to integrate their computers and their phones into one common network.
The Allworx product does not support every possible need a business may require, so Allworx segments their market towards the business categorized as a Small/Medium Business (SMB). The SMB market is usually defined as a company of up to100 employees. Using that definition, the size of the market space is estimated to be over two million firms in the US (US Census). From Allworx’s promotion material to further emphasize they segment to the SMB market, they play off the commonly used acronym of SMB and “redefine it” in this way: Scalable, Manageable, Brilliant (Allworx).
The viability and longevity of the SMB market segment is due to two factors: there is estimated to be over 210,000,000 people working for SMBs and the amount of legacy phone systems (systems that are ten or more years old) still make up a significant portion of the SMB segment.
Behavior of the target audience, that being of IT managers, is varied but has a few key attributes: they spend money only when needed, they embrace technology as a solution to solve their business needs, and they are willing to work with vendors that provide quality support for their phone system. Perhaps the greatest behavioral risk in this market segment is that the IT manager purchasing the VoIP solution can be influenced by many variables: price, perceived vendor stability in the market place, and their lack of understanding of the complex technology that supports a VoIP system. All of these influences can cause the purchaser to change their mind at the last minute.
Competition in the SMB market segment for VoIP solutions is intense. Allworx is competing against Cisco, Mitel, and Shortel to name a few. These companies have large recognition compared to Allworx in the SMB market. The challenge is that VoIP systems all must use the same base technologies to ensure their devices work so as to allow anyone to call anyone else no matter what vendor solution is purchased. As the SMB market is the largest segment of business in America, each vendor is just as motivate as Allworx is to tap into the over 210,000,00 employee workspace and that the target market’s longevity is in many cases a forever on-going opportunity. Technology changes rapidly and today’s new VoIP systems will become legacy solutions that need to be replaced in only a few years.
Allworx positioning statement revolves around selling a product that is tailored to the SMB market (Allworks – selling secrets). They utilize a frame of reference based on the size of the company. They target their solution based on attributes of the company they are seeking to provide their solution. Small…