M5 Networks, the competitive service provider serving mid-sized companies in New York and Chicago with hosted VoIP and advanced features, is getting more aggressive with its marketing message, deciding to proclaim “The end of the Phone System.”

In a campaign designed to differentiate what M5 offers from premises-based solutions such as IP-PBXs and hosted VoIP offers that don’t include business features, the company is stressing its Voice as a Service model and emphasizing real-world successes.

“What we are seeing is a big inflection point for us in ’07,” said Jeff Silbert, vice president of marketing for M5. “We are doing more business this year than in the last five all together. Initially, we eliminated headaches – the phone system sat in our closet instead of yours. But that wasn’t’ enabling businesses to serve their clients better.”

Now, M5 is “taking a page from the software as a service industry” and trying to help its mid-sized business clients use a hosted voice service to do their work better, Silbert said. “We are providing these breakthroughs that can transform their businesses in the place that makes the most important difference to them,” he said.

For instance, Blue Wolf Group tracks the success rate of its inbound/outbound calling force using a sale engine that M5 provided to determine who’s more successful in selling over the phone, he said. When U.S. Limo realized the high volume of calls during Oscar time meant some opportunity was lost, M5 helped the company re-route calls to its New York office to make sure everyone got through. Coldwell Banker used M5 to track the success of its real estate ads by determining how many calls each one generated.

Telecommunications resources are more important to mid-sized businesses because they must compete with larger firms who are investing heavily in technology, Silbert said.

“To compete with mid-sized companies, the giants are now are starting to do a much better job of servicing their customers,” he said, citing the example of Home Depot using more intelligent routing of calls to connect a customer with a plumbing expert, even if that individual is several states away. “They used to have a hard time competing with the local hardware store on service, but they are getting better,” Silbert said.

But while voice is important to mid-sized businesses, they don’t have the resources to invest in an IT department, he added.

“That’s why we think a voice as a service model is right for them,” Silbert said.

M5 has sales offices in New York and Chicago and is moving into Boston and upstate New York, he added. In addition, the company services its customers in other cities as needed.