Case Study I-2 VoIP2.biz, Inc.
Teaching Note on Case Study I-2
VoIP2.biz, Inc.: Deciding on the
Next Steps for a VoIP Supplier
Objectives
This case may be used to accomplish the following objectives:
To demonstrate the difficulties encountered in the acceptance of a new technology in the
business marketplace.
Overview
Lawrence R. Milkowski, President and CEO of VoIP2.biz, Inc., an Indianapolis-based startup
supplier of Voice over Internet Protocol (VoIP) telephony to the small and mid-size business
market, is faced with a major decision for his fledgling company. It was Friday, June 23, 2006
The concept behind VoIP2.biz came from some experimentation in early 2004 by personnel
working for Harley Services Corporation (HSC). Milkowski and other personnel in HSC
explored the market for VoIP services and evaluated several then current VoIP service providers.
As a result of these investigations, the HSC project team designed a system they believed could
deliver a cost competitive IP PBX solution for implementing VoIP via an open-source software
platform.
Through its business activities to date, management was convinced that the open-source solution
offered by VoIP2.biz provided a small to mid-size business customer a complete telephone
system solution for ten to 30% of the cost of a new proprietary solution from traditional vendors.
Case Study I-2 VoIP2.biz, Inc.
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1) a population of at least 500,000 and the presence of approximately 200,000 business
telephone lines
3) an effective reseller relationship with a CLEC (competitive local exchange carrier) operating
in the marketplace
5) the availability of local staffing with the appropriate experience, skills, and prospect network.
The second segment of the Phase II plan would start in July 2007 and last until June 2010.
During this time period, the company would enter an additional two markets per quarter for six
Midwest presence to 18 markets by late 2008 and achieving a
revenue exceeding $60 million by the end of 2009. The plan called for selling the company to a
larger provider sometime during 2010.
In order to carry this out, management planned to raise an additional investment of $3 million.
Milkowski believed that his plan was an excellent investment because the company had
Epilogue
At the meeting, the Board of Directors decided to sell the company to another firm. Milkowski
negotiated the deal and it was closed in September 2006.
Case Study I-2 VoIP2.biz, Inc.
Exhibit 1
Detailed
VoIP2.biz offerings
The VoIP2.biz V2B System 1 IP PBXSM, which provides the customer a VoIP solution for
VoIP2.biz V2B System 1 IP PBXSM
The V2B System 1 IP PBX is an Internet Protocol (IP) based telephone system capable of
originating, routing, delivering and managing voice communication for a customer enterprise.
The IP PBX is implemented on an HP or IBM server running Linux and is installed by VoIP2.biz
personnel
network.
The V2B System 1 IP PBX includes most of the commonly available communications features,
including:
Automated Attendant Conference Calling
Call Forward Do Not Disturb Music on Hold
VoIP2.biz sells and installs, as an option, a graphical user interface (GUI) that runs on top of the
Asterisk application and dramatically simplifies the administrative interface.
VoIP2.biz personnel often propose a migration plan to its customers. This plan calls for installing
the V2B System 1 IP PBX first; then moving the voice network over to it, substituting IP
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VoIP2.biz V2B Network ServicesSM
While the V2B System 1 IP PBX can be installed and operate with an existing POTS telephone
network, the operational savings of VoIP, beyond the cost savings of the IP PBX itself, is best
Replacing voice telephone lines or trucks from the ILEC with data circuits from VoIP2.biz can
The V2B Network Services Schedule includes:
Internet Access In order to assure quality of service, VoIP2.biz provides high-speed data
circuits that also include Internet access. These circuits can augment or replace the
VoIP2.biz V2B Hosted Voice Services
V2B Hosted Voice Services is a hosted Internet Protocol (IP)-based voice service that delivers the
same feature functionality that is available in the V2B System 1 IP PBX bundled with the
communications features of the V2B Network Services Schedule described above. This
The V2B Hosted Voice Services Schedule includes:
Case Study I-2 VoIP2.biz, Inc.
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Internet Access In order to assure quality of service, VoIP2.biz provides high-speed data
circuits that also include Internet access. These circuits can augment or replace the
Dial Tone VoIP2.biz delivers dial tone to the desktop or remote user via VoIP2.biz
Questions for Discussion
1. At the time of the case, what had Milkowski and the VoIP2.biz team accomplished?
By June 23, 2006 (the time of the case), VoIP2.biz has developed:
2. At the time of the case, what had Milkowski and the VoIP2.biz team not accomplished
that several of the Board members felt should have been accomplished?
3. Why does Milkowski believe that VoIP2.biz should proceed with the next phase of the
business plan at that time?
The VoIP market for businesses represents a very large opportunity over a million
telephone lines for small enterprises in Indiana alone.
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4. What options for future activities should Milkowski present to the Board?
Milkowski should identify the following options for presentation to the Board: