In this current economic environment where companies are looking to reduce costs it is no wonder that many firms are considering the possibility of purchasing a hosted telephony solution. On the surface it sounds very attractive, however is it really all it is cut out to be?
The simple answer is that for some clients it is the perfect solution and for others it is simply a false economy. Although a hosted solution is cheaper to procure short term, over time it is very expensive and essential companies are throwing money away for a solution that the firm does not own and ultimately doesn’t have any control over.
Why Go Hosted
- Keep costs to a minimum (perfect for a new business start-up)
- Monthly rental
- Can add features at any time and on a per user basis
- Takes up no expensive office space as it’s hosted offsite
- Financial figures are shown against profit and loss accounts
Why Avoid Hosted
- The system is under the control and ownership of other parties – if any of the parties involved in the hosting go out of business the hosting will no longer be available
- With hosted the brain of the system is stored offsite. Therefore if you lose connection to a host site you lose your communications
- Unlike traditional telephony, with hosted you need to consider bandwidth and internet connection. If the service is slow it is highly likely the system will be too and the voice quality will be poor
- If the call quality is poor it is very difficult to correct the problem with a hosted system. At this point you may then need to bring the service in-house using localised lines and an on premise system. This will result in the company paying penalty fees for ending the hosting contract and the possibility of losing any telephone numbers plus the cost of a new on premise system
- Call charges are dictated by the Hosted provider so companies don’t have the ability to shop around to find the best price for calls
- The phone numbers belong to the hosting company so if the firm choose to change systems the host company may refuse to provide the telephone numbers or charge a premium release fee
- With hosted solutions the provider will charge line rental from their site, plus there will be an additional rental costs of at least one ADSL and analogue line service
- Contracts are often long with complicated terms
- Hosted is usually 2-5 times the expense of a monthly rental over a 7-year period (anticipated life of a phone system)
What Are The Other Options?
- If capital expense is an issue then leasing the solution maybe an option
- If lack of IT expertise is the issue then look at a managed service whereby the company supplying the telephony solution takes care of the system for you
… penned by Joe Noble, Telefonix
