FORTUNE Small Business

Conference calls: Cutting the cord

FSB's fearless reporter explores the wild world of online conference calling.

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By Jonathan Blum, FSB contributor

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(FSB Magazine) -- While most of us here on planet small business have been sweating fancy productivity tools such as remote e-mail and the broadband Internet, old-school conference calling has quietly undergone a revolution. New online conferencing tools are cheaper and more powerful than ever. And they can add real value to your business.

Conference calling was strictly a high-end option until the mid-1990s, when digital telephony made the mandatory human operator obsolete. Today the Internet has spawned a veritable tidal wave of new multi-user communications tools. Audio-, Web-, and video-conferencing has grown to a $3.5-billion-a-year global industry. So-called reservationless conferencing accounts for roughly 95 percent of that market, according to research by Vapps (vapps.com), a Hoboken, N.J., provider of IP-based conferencing solutions.

Traditional carriers offer reliable automated conferencing, but they face rising competition from cheaper Web-based services such as WebEx (webex.com) - which will soon be acquired by Cisco Systems (CSCO, Fortune 500) - and GoToMeeting (gotomeeting.com).

Skype, the IP-based free and low-cost phone service, is offering a new Skype for Business product that builds conferencing into a full suite of communications tools. Voice-over-Internet Protocol companies such as Vonage (VG) (vonage.com) offer multiline conferencing as part of their service. One company, Accutalk (accutalk.net), even kicks in American Airlines reward miles with its conferencing packages. (But wasn't the idea of conference calling to skip the trip in the first place?)

Do these free or low-cost conference-calling products really work? Some discount services, such as WebEx and GoTo Meeting, are easy to set up and use - assuming call participants are at least a little bit Web savvy. Others, such as Skype, demand a fairly high degree of technological literacy.

The best bet for the weekly conference call in advance of my radio show, Strange New World (snwradio.com), turned out to be Skype for Business. Once you get it set up, the calling is easy, and integration of Internet and traditional phones is smooth. That's not to say that getting there was easy. While setting up Skype, we shared a number of exchanges such as "No, the pink wire goes in the other small hole." And more than once we had to make toll calls on real phones to get our "free" Skype conference call to work.

"This is turning into a major pain in my #%$," said "Ninja" Bob Fitzgerald, "head engineer guy" (his real title) at Hothead Studios, the New York City facility that produces the program. We also had occasional sound-quality issues. But in the end, Skype works. And there's no beating the price: Calls among Skype users are free, and calls outside the Skype network cost fractions of a cent per minute.

Mogistic (mogistic.com), a six-person custom-software developer based in Allentown, Pa., uses WebEx, which has emerged as a leading supplier of online teleconference, videoconference and meeting services. Mogistic's main product, Teamtivity, is a collaborative project-management tool that companies can use to organize and track their assets on the Web. After surveying the online conferencing landscape, Mogistic chose WebEx because it integrated well with Teamtivity, which the company uses to manage its own operations.

Each session, which includes voice and graphics, costs $1 a minute with no per-person charges. Mogistic spent about $2,000 last year for roughly 2,000 minutes spread over about 30 conference calls. Managing director Lawrence Wolfe says that he saves about $7,000 in travel costs for each client he can serve by teleconference. "We have 30 clients," says Wolfe. "That's roughly $200,000 per year in savings" - about 20 percent of Mogistic's total sales. Concludes Wolfe: "We simply could not be in business without the service."

So how to find the right option for your business? Comparison-shop and bargain. "Bundle up all your usage, find out exactly what it is you use, and then you have the ammunition to go shopping," says Ira Weinstein of Wainhouse Research, a Boston-based teleconferencing advisory firm. "Then you can save yourself a ton of money."  To top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.