Hosted VoIP phone solutions tend to be viewed as the small/medium businessman’s answer for an affordable phone system, and rightly so. Low costs and predictable monthly billing are key reasons. But that’s small and medium businesses. Do the same reasons apply for larger organizations with a greater number of employees and a need for incorporating UC (unified communications) features?
While we believe there is still a need for on-premise solutions, we are also finding that an increasing number of large businesses are entertaining the idea of migrating to hosted solutions, especially now that more providers are offering UC services.
According to HIS Market 2016 Business Cloud VOIP and UC Services Annual Market Report, hosted VoIP and UC seats increased 22% year over hear in H1 (first half) 2016, to 38 millions seats, and is expected to nearly double by 2020, only two years from the time of this writing.
In this article, we address three advantages that hosted VoIP offers over an on-premise solution specific to larger businesses who are accustomed to owning and operating an on-site PBX.
Lower Financial Risk With a Hosted Solution
For those who are starting a new business venture and haven’t had to deal with phone systems as they most commonly used to be, such as managed on-premise, may not appreciate the financial implications as much as one who comes from the on-premise environment.
While hosted solutions seem to get much of the marketing buzz, the reality is sometimes it is worth it for a business to stay with an on-premise solution. However, with the purchase or upgrade, an on-site system comes additional financial costs.
To name a few:
- License fees
- PBX equipment
- Switches
- Appliances
- IT Manpower (either internally or externally)
Add that up and depending on the size of the business can snowball into tens of thousands of dollars without blinking an eye. This is a large investment with the ultimate goal of achieving a healthy ROI as time moves forward.
But what if the business doesn’t move forward?
Sometimes an on-site PBX is worth this type of risk
With on-site PBX solutions, a business needs to have a firm grasp on the future of the business in regards to stability taking into account both financial and economic conditions, as well as organizational planning such as changes in organizational structuring whether consolidations or expansions.
What if you purchase licenses to handle 500 users and the following year there’s a 30% reduction in staff? Or perhaps the business simply doesn’t produce the profits forecasted thereby indicating a higher debt to equity ratio.
With on-site solutions, the costs are upfront. It’s an investment, and for many businesses, it is still appropriate to make that upfront investment, despite the risks. Ownership and full control of an on-site system is forfeited when going to a hosted solution, so businesses really need to weight their options and priorities.
A cloud solution does not have these upfront financial costs and thereby enables businesses to avoid this type of financial risk.
With that said, there are still upfront costs when working with a cloud solution. However they are the same costs any business would most likely incur, such as internet access and phones. Even these expenses can be alleviated through the use of softphones which can be installed on a computer, or mobile apps that can turn a smartphone into an office phone.
Configuring End User Accounts is Faster and Easier
If you’re an established business used to owning and operating an on-premise system, then you’re fully aware there is a certain level of expertise and aptitude necessary to set up and configure various collaboration tools for your organization to use.
Often this involves purchasing additional licenses and keys, configuring accounts, testing, and ongoing maintenance when things don’t behave as expected, such as faulty hard drives, switches, backups, and more.
Easier incorporation and pricing of UC and collaboration tools
However, hosted VoIP solutions make it much easier for businesses (of any size) to easily and effortlessly add or incorporate UC and collaboration tools for their end users, in a simplified deployment process.
For example, most hosted VoIP providers offer specific features and tools bundled into a monthly price. Whether virtual meetings, video conferencing, conference bridges, IM and presence, etc. the features are already there waiting to be activated through the bundle purchased, or even selected as an add-on feature.
This is a much simpler process for setting up end users with the applications and tools they need. This saves your IT team (or you) valuable time, and as the saying goes, “time is money.”
Would you want your IT team to be spending their time with routine manual processes and configurations, or plugging in the user information and having the hosted platform automate the activations and configurations in a fraction of the time?
No-Hassle Redundancy and Disaster Recovery
As a Platinum ShoreTel and Mitel Partner, we work with plenty of businesses which use on-premise solutions. Most often we provide support services for their ShoreTel phone systems, so, for example, when they have service issues, they enlist our help to figure out the source of the issue and get it resolved. They submit a ticket which gets assigned to an agent who quickly starts the investigating the issue.
Sometimes it’s a carrier issue, sometimes it’s a NOC issue, and sometimes it’s a local issue, such as their network or a configuration change that they made, and we help fix it. While on-site PBX systems can be configured to fail-over to alternate end-points when there is such an issue, these are problems that usually don’t happen in a hosted cloud environment.
The reason why they don’t usually happen is that reliable hosted providers use multiple servers in secure data centers across geographical areas such as the west coast, east coast, Midwest, etc.
This is called geo-redundancy.
Hosted providers "should" have geo-redundancy built into their infrastructure
If one site goes down, an alternate backup system is available so that the customer experiences little to no downtime. Even if there is a carrier issue, the provider should have alternate carriers for backup routing. If it’s a NOC issue, there should be alternate data centers that have your account configurations and settings so that service isn’t interrupted.
For example, 8x8, one of the leading hosted providers has a 99.9983% up-time, claiming there is “no single point of failure.” According to 8x8, “These data centers are SSAE 16 audited and provide automatic and transparent failover to prevent disruptions in service.” See the image below to see their global network of data centers.
If this is not the case with your hosted provider, you need to find a new provider right away!
In this post, we’ve covered three advantages that large businesses experience when using the hosted VoIP model.
Less financial risk by avoiding upfront investment costs, easier deployment of UC and collaboration tools to your users, and the peace of mind knowing your phone system is secure and geo-redundant at a global scale are strong motivators for businesses looking to migrate away from an on-premise solution.
Looking for an Experienced UC & Phone Consultant for Your Business?
As UC and phone consultants, we can help you and your team determine whether a cloud-based or on-site approach or even a combination of the two makes the most sense for your business goals and aspirations.
We step you through the evaluation and analysis process making certain there are no gaps or overlooked areas. If you would like to speak with us about the challenges you are facing, please contact us today.