To help businesses cope with the fast-paced nature of communications technology, Atlas have decided to use our 30+ years of experience delivering business communication solutions, to put together our guide on how technology can help operational and economic performance within your business.

Part 3 – Rent vs Buy

Business owners are constantly being urged to invest in communications tools and technologies to improve their operations. However, despite the growth in Internet-based communication channels, the telephone is still a key tool. It is direct, fast and very one to one in nature.

Those same advances in Internet access are affecting business telephony options too. The concept of renting a slice of a provider’s telephony system that is located in the Cloud has emerged. Meaning potentially big change for the humble office telephone system & a change in how investment in the technology is being made.

In the past, a phone system was seen as a significant capital investment with a long lifespan. Unlike many other communications technologies, the phone system had longevity, seven plus years compared to the average PC or server at perhaps 5 years. With the advent of renting Cloud based telephony, the investment doesn’t have to be so capital intensive, opening the question of whether renting is a better choice than buying outright.

Buying a Phone System

The stand out advantage for businesses, who still opt to outright purchase, is complete control and ownership. For these organisations, it is clear that they have covered the bulk of their costs upfront and will not be met with any unexpected ongoing costs.

There is also certainty, whilst telecommunications technology changes, a sound purchase in a mature marketspace of providers will equip a business for many years to come. Feature sets available, are no different from Cloud based solutions. If it can be delivered by an in-premise solution, it can be delivered by the Cloud and vice versa.

However, the downside for many businesses, especially when they are at a start-up or growth stage, is that they do not have a lump sum of capital available to purchase assets. Why tie up a large amount of cash when that money could be used to establish or grow the business? You are building an infrastructure & supporting it, which costs time and money.

There is also a fear, that because technology advances so quickly, you risk being left behind with the product you have invested so much in. As vendors keep updating their products with more benefits & features, you could be at a potential disadvantage to your competitors.

Renting a Phone System

Some call it Cloud telephony, others call it VoIP, others Hosted, but they generally mean the same thing. Cloud telephony platforms operate by the user connecting to a central phone system over the Internet, which the customer rents a slice of from the provider. The concept is simple; everything from lines, the telephone system and sometimes even your calls, are all bundled into a straightforward, per user, per month rental.

With renting, the capital costs are reduced & you do not have to worry as much about additional support costs because the provider is responsible for that within your rental payment. If you need to add a few new phones, you simply adjust your monthly bill, adding flexibility and scale to your operations.

Renting rather than buying particular features, such as call recording or entry level call centre features, can also bring large savings over buying in the technology. Making available what otherwise would remain on the feature wish list and giving you an advantage over competitors & often helping towards regulatory compliance.

Yet, though the Cloud telephony market is growing fast, it has some very notable pitfalls.

As telephony platforms tend to have a longer lifespan, when you start to extend the view of costs over a longer timescale, the cost gap closes and often crosses over. Plus, you don’t own the platform and never will, you are on a rental wheel where your phone system & your line rentals, no longer belong to you.

Internet speed is also important, if you don’t have enough, Cloud telephony isn’t going to work. The quality and consistency of the Internet connection is critical too. Many businesses, locked into a contract for three or five years, have found that a massive upgrade in their Internet access & associated running costs, is the only way to truly benefit from their Cloud telephony platform.

Which Option is Best?

Cloud based telephony is not always the best option for every business, it may not be an option at all if the Internet access isn’t up to the job. Some simple rules of thumb may help you decide:

• How much money do you have and how can you spend it?
• If your requirements are relatively static, buying is often better than renting. Where maximum flexibility is needed to grow, renting may prove more accommodating.
• Smaller organisations may find the cost balance is better for Cloud rented solutions but the bigger you go, the faster this gap can close.
• The Internet is critical for the solution to work. Check whether you need to factor in a dedicated connection for access or can use your existing Internet access to manage the call traffic.
• If you have a small number of users requiring special features such as call centre function or softphones for laptops, renting may offer the cost advantage to benefit from this technology.

Remember it is all about your business, so speak with a provider that offers all setups and options to find what will best meet your needs.

If you have, a specific question about Cloud telephony that is not covered in this piece, please contact us on 028 9078 6868 or get in touch for more help.

*This blog post is part of a series focusing on the changing nature of business communications and how technology can help address operational issues.