Jan 30, 2020
June 26, 2019
Is Cloud Telephony worth the hype?
With the promise of powerful functionality and lower overall costs, the popularity of cloud-based telephony, sometimes referred to as hosted telephony, has increased significantly in recent years. Like most emerging technologies this cloud-based solution is not without its drawbacks and sometimes it is hard to know if it will work for your business.
What we have found is that our customers only truly gain the benefits if the technology makes sense for their company. That’s why we have put together this blog to help you recognise what you should be looking out for if you’re considering cloud telephony for your business.
Understanding your needs
In terms of basics, hosted and on premise platforms should be able to do the same things: take a call, make a call, voicemail and have call routing to ring multiple phones and so on.
Where hosted solutions perform well however is in certain specialist functions that not all your users need, such as call recording, instead of having to go all in with an on premise system.
On the downside, a hosted platform is never quite tailored to your needs as it is not yours, and it’s shared with many other users & customers. Therefore, it’s important to decide what functions you need to determine which solution will be the right fit for your business.
Costs over time
One of the major selling points for hosted providers is cost, promoting an Opex model that simplifies and spreads out payment in a straightforward per user rental bundle. This often seems attractive compared to purchasing your own telephony system where the initial up front cost can affect your budget and cash flow.
However, telephony platforms tend to have a longer lifespan and when you start to extend the view of total costs over a longer timescale, the cost gap closes and often crosses over. For those who bought into what appeared to be convenience and apparent cost gains, after two to three years the picture starts to look a little different.
The main consideration for businesses should be the total cost of ownership of the solution across its expected life cycle, which for an in premise platform could easily be seven years plus.
Costs to consider are capital costs of a phone system, capital costs of the handsets (which are often sold and not rented in the hosted model) and ongoing rental costs versus system maintenance costs.
Another important cost consideration that often gets lost is the popularity of the hosted telephony ‘all in bundle’. This is where you get a bundle of calls as well as line access all in a single per user fee. The advantage of predictability of cost will need to be offset against the actual usage of calls. Does every user need an add-on call bundle?
A final consideration is how you as an organisation budget and spend your money and how much money you have to spend when a new telephony platforms is required.
Would it be more cost effective for your organisation to buy outright or to pay a monthly rental charge for the number of years that you would expect to use your new system? We have found that some of our customers prefer to lease an on premise system, which they will eventually own but does not impact their cash flow as much.
The cost angle is a major pitch of hosted telephony but it’s not a gold plated guarantee. Sometimes hosted telephony may save you money but often it doesn’t over time. Sometimes a new in-premise platform can save you money over time when paired with SIP lines instead of regular business ISDN lines, but again sometimes it just doesn’t, so cost is definitely not everything.
It’s also important to look for a supplier who will provide you with bigger picture costs and not just the headline per month rental price. Committing to paying monthly for a term typically three years in length means that pricing oversights can have a major impact on the long-term cost of the solution, eliminating the low cost USP that cloud telephony is largely sold upon.
One issue that we see arising repeatedly is the importance of having your office data network prepped to accept hosted telephony. The phones need data cabling, which needs data switching and all of this costs additional capital money.
Sadly, however, we have seen plenty of examples where an organisation has signed a contract with a supplier and only after does the issue of having the office prepared arise. Organisations are left with an unexpected bill that can run into thousands. Poor or just deliberately vague sales techniques when selling cloud telephony is not uncommon.
Do not make the switch to cloud telephony unless you’re prepared to invest in making sure your internet is fast enough to support the system. Inadequate bandwidth can cause serious call quality problems as can mixing your day-to-day Internet traffic and voice traffic through the same broadband.
Some of our customers even opt to have dedicated voice assured broadband that prioritises their voice data over other internet traffic.
Sadly, however, this critical pre requisite is barely mentioned in the sales pitch and becomes a ’not our problem’ convenient excuse on the part of the hosted telephony provider. An end to end supplier who also specialises in business networks should be able to advise on both aspects for you.
What service are you actually getting for your money and who is really supplying your service? Reselling of hosted telephony is extremely common so you may find the company you are paying the bill to, in reality actually has limited ability to assist you if there is a problem.
Make sure to ask about customer support policies, response times and who is responsible if something goes wrong, particularly if the supplier is re-selling the service.
One of the main concerns businesses have with moving to a hosted phone service is a loss of control. The hosted system is not yours, it’s not an asset. For some businesses, this works well but for others it’s a problem as they can’t truly manage and configure a hosted platform in the same way that they can manage their own in premise system
On the other hand, it suits many businesses to hand over control to their hosted provider who then manages any necessary system updates, maintenance repairs etc. or for those businesses who need to upgrade their phone system but don’t have the capital to cover an outright purchase.
One of the greatest advantages of the hosted OPEX model is the ability to easily expand or contract users. Simply buy the handset, add another monthly subscription and its done.
For users with multiple small locations, a cloud platform tying all the offices together as a single system can make management much easier than multiple in premise platforms. On the counter, the oft advertised idea of hosted as easy ramp up isn’t always matched with easy pare down if required. Contract terms and conditions need to be carefully read.
So, what does this all mean for your business?
The biggest problem we have found that organisations have is separating the reality from the sales pitch. As this article has mentioned the hosted telephony market has an uncomfortably high amount of menu driven selling, a tick-box approach with an ‘everything is as simple as ABC’ attitude. However, technology of any kind is not always so, and hosted telephony is no exception. Whatever option you take has costs and often the sales pitch fails to take into account the lifespan costs or hidden costs due to poor specification or just plain omission.
As a service provider, we supply both on premise solutions and our own Cloud telephony platform VoiceOne and both work equally well when implemented in the right environment. Remember Cloud telephony will only provide benefits if it makes sense for your company and you are ready for it. Take time to review your environment and determine exactly what it is you need from your telephony system, in terms of both functionality and cost.
Our team would be happy to discuss your different options and take you through our Cloud telephony checklist if you think it’s something that your business would be interested in. To request a call back from a member of our team click here or call 028 9078 6868.