 |
||
|
Questions to consider before signing a long term contract with a Hosted VoIP Provider... For the small business market, the smaller your business, the more likely that a hosted solution is right for you, but there are exceptions. A business that needs tight control and flexibility and for whom an integrated telephony solution is a mission critical business application is going to want to have a solution they own and operate on their premises in order to truly deliver for its employees and customers. Let's face reality - your service provider has the actual control - you don't.
Hosted services have considerable drawbacks. The monthly charges can add up, especially when they involve paying full rate for little-used but necessary extensions. And unlike equipment purchases, hosted PBX payments don’t end until you cancel the service, and upon termination of service the business is left with no associated asset. Security is another concern, since voice mail messages and call records reside on the service provider’s servers, not you servers. Call quality and service reliability can also be significant worries, since both are totally dependent on your Internet connections. Who provides the
WAN (wide area network) Router for your VoIP Solution? - Latency Also, will they help you resolve these issues with your current data services provider? Does your current computer network use the special type of network switch that has QoS capabilities and is required for their offering? If not, will they pay to change your current switch to the type their service requires? Will the vendor install and support a POE switch to support the VoIP phones or will you have to buy this device and manage it yourself? Who provides the support for the on-site IP phones you purchase? Is this a local service or will you have to deal with a 1-800-supplier? How many customers do they currently have utilizing this service? Can they provide you with references? How long have they been supporting the hosted VoIP offering to customers? Is the vendor you are working with providing this service or are they purchasing it from another provider and then reselling it to you? What is the length of contract you are required to sign in order to receive this service? Is there any clause in the contract that reduced your monthly costs after you have met the commitment of your contract term or do you just keep paying forever? If the service does not work as promised is there relief to get out of the contract? If so, what do you feel is the cost to you for the operational impact on your staff after changing to a new way of operation, then having to put in another new technology? In addition, there are some regulatory requirements like HIPAA (Health Insurance Portability and Accountability Act) that are harder to comply with when using a hosted PBX solution. The hosted service proposed to you is on a shared system back at the phone company. Can the company offering you the service provide any HIPPA certification or any written assurance from an executive of the manufacturer that their system meets HIPPA requirements? |
||
|
Weaknesses of Hosted IP
1) They never actually own the phone system, the perceived savings are often smoke and mirrors- you have a monthly payment forever. When was paying for something forever a good investment. 2) This has been around competitively for about three years now. However, most hosted solutions are still for 15 phones and less. 3) Most companies offering hosting can not provide good references especially over 15 phones. 4) Any company interested in privacy and security should never consider hosting. Your phone system does not reside at your location. Every call coming in or going out must pass through their server at their location. Even if you call the office next to yours (at your building) - that call still has to leave your building and then come back in. If somebody wanted to listen to your calls, they could easily. 5) You are locked into a contract with a hosted solution. If you are unhappy with the hosted provider, to bad you’re stuck. You can not simply call another dealer in town to service your system. 6) If there are problems with a hosted system everyone has the same problem at the same time.. Good luck trying to get the help you need when you call in. Unhappy with their service- to bad you’re under contract. 7) Often times you need to increase your bandwidth or pipe coming in to support a hosted solution. This will increase your monthly bill and therefore negate some of the cost savings a hosted solution was supposed to bring. 8) What happens if the company doing the hosting goes out of business? We are in a recession. The end user ends up with a bunch of SIP phones that are useless. Also, in many cases the company providing the hosted solution owns the phone numbers. If they go out of business- they take your numbers with them. 9) Many companies offering hosting do not have true tenanting on their switch. One way to find out is to ask them if you can have any extension number that you want. If the answer is no, true tenanting is not supported. Therefore you could essentially transfer your customer to another company altogether. 10) Hosted companies have a very limited feature set compared with a system like ESI. No (PM, Time and ATT, Media Manager, Call Logger, Cameras, Cell Mgmt, etc) 11) Voice quality can be a serious issue- Exp: your phone system is working fine and out of nowhere you experience an issue. One of these many topics could be the culprit:
Broadband Services: You’re Network Router Demands on your Computer Network Voice Quality Management (QoS) Keeping your Computer Network in Balance Power Management of individual Phones Computer Network Changes Network Provider Switch Maintenance Components within the system
|
||
|
An Important Decision Customer-Owned vs Renting Hosted Services The traditional purchase or leasing of your phone system is by far the prevalent means by which customers replace their older phone systems. However, in the past year telephone companies and smaller independent companies have begun to offer a service that presents an alternative approach that is very similar to the Centrex method used in the 1970’s, but offering updated features.
TELX can offer either type of solution to you. However, for your particular requirements we believe the premise-based solution offers the easiest way to operate your phone, the best set of features you will “actually use”, and when you consider the total cost of ownership over the term you will use the system, it is the best financial solution also. Please consider the following information:
A very important question to ask is, “at the time you install your new phone system how long to do expect it to serve you before you go through another major replacement of your system?” This will set the stage to measure the period in which you consider the overall “cost of ownership”.
Here is a brief comparison.
1. Do you want to build equity in your investment or do you want to rent your system indefinitely?
Premise-Based System: You purchase the system up front or you may choose to lease the system over a term of your choosing. Factor in the consideration of depreciation, and if you lease consider that your monthly payments are gone at the end of the lease period and you own the system and phones.
Renting Hosted Services: You pay for the installation and purchase of your on-site phones, QoS equipped router, your data network switched should be changed to the type that provides power to the phones, and it should be programmed to fit into your specific network. These are all changes that you typically pay for up front. You may also choose to lease these components and that will need to be factored into the total cost. After you address the upfront changes needed in your computer network as well as the phone purchases you will need to consider the following monthly recurring charges for each phone, voicemail-related services and other capabilities you may require. Remember, every phone you add and every feature you need is an on-going and never ending monthly cost to you.
Comment: Back in the early 1970’s customers had very few choices. They could only rent their services from the phone company and the money they were spending never ended. When competition came into the industry customers had a choice to own their telephone system which substantially reduced future costs and allowed them to depreciate the system. This was such a powerful trend that the old Bell System was forced to do the same. This principle holds true today with the introduction of “hosted services”, and when you consider the way in which hosted services are delivered, there are many more technological requirements that all have to work right and stay working right for the service to reflect a quality image of your company.
Advisory: We suggest you first ask yourself, “if I’m going to have my employees learn a whole new way to operate their phones, how long do I expect to use the new phone system before I make another major change”. Most customers respond with 7 – 10 years. What do you feel? Next, do a careful financial analysis that looks at the perceived cost over that time and be sure to factor in the potential cost of maintaining all the new dependencies of hosted services. What does it really cost? Customer-Owned vs Renting Hosted Services
2. When we talk about new dependencies with Hosted Services what do we really mean? How does that compare to using a premise-based system?
Premise-Based System: With the premise-based system TELX is proposing your system sits in your business and uses the traditional cabling your current phones use. Because your environment is protected from weather and other outside influences, the connection between your phones and the system is stable and within your control. The connecting from the phone system to each phone is direct on a dedicated cable pair. There is no other technology in between that may cause a problem and result in future unanticipated costs that are not currently identified.
Renting Hosted Services: With hosted services the telephone system’s connection to each phone depends on a lot more things to work properly. This technological fact significantly increases the probability that you will incur future costs to restore your service to the quality you demand.
What does this really mean? Let’s look at some of the differences between your two choices.
3. Call Processing Methods – the difference between Premise-Based systems and Hosted Services.
Calls to and from phones within your business:
TELX ’s Premise-Based System: Calls from phone-to-phone simply stay within your building and do not depend on outside lines to speak between your phones. This means that in the event your outside lines may be having problems, and they do at times, your on-site communications is not affected and functions normally.
Hosted Services: This service can not use traditional methods that offer a more stable guaranty of quality, but can only use the broadband method. This means that all communications from one phone to another are no longer “intercom” calls, but go out into the network, connect to the network-based system, then come back down the circuit to the other phone on your site. This is true even when the phone you want to speak with is in the next office from you. This creates a “total” dependency on the outside line services working well even for your on-site communications.
Calls with outside parties to and from your office:
TELX ’s Premise-Based System: We can use both traditional methods as well as new broadband methods to deliver calls. The traditional methods offer a more stable guaranty of quality, but the broadband method may cost less because your voice and data is shared on a single facility. This also means your voice and data communications compete for available bandwidth at any time.
Hosted Services: This service only uses the broadband method and can not use traditional methods that offer a more stable guaranty of quality. This can be a cost savings as it offsets your monthly line costs. However this is only one element of the total cost of ownership and the other costs needs to factored in as well as the risk of call quality. Customer-Owned vs Renting Hosted Services
4. Technology Interdependencies – Critical differences you need to know between Premise-Based systems and Hosted Services.
Hosted services use a completely different way to deliver your telephone services than we are used to. Although the basic concept is very similar to the concepts used in the 1970s by the phone company, the technologies used to make this happen today have become much more complicated. We fell it is important for you to be aware of this so you can consider these when making your final decision. The following is a brief outline to illustrate the interdependencies required to make the two methods work.
Technology Interdependency Premise-Based System Hosted Services
Traditional Phone Lines: X Broadband Services: X Your Network Router X Demands on your Computer Network X Voice Quality Management (QoS) X Keeping your Computer Network in Balance X Loss of Power at Your Location X X Power Management of individual Phones X Computer Network Changes X Network Provider Switch Maintenance X Components within the system X X Phones made by the same manufacturer X
Conclusion: The choice of changing your telephone system is a very important choice for your business, your employees and your customers. Although during the evaluation process things may be said that sound great, some of those things may come at a significant risk because of their dependency on many other technologies.
When considering cost we believe it is critical to measure this over the perceived life of the system you will use. Consider whether it is important for your costs to go on forever, or whether you want to build equity in your system so the system costs go away after a few years. Consider leasing to own as an option when looking at your choices. See if those offering hosted services will put in writing that they will reduce your costs after the initial agreement period they are asking you to commit to. If they won’t you are not building equity and the money you pay is not helping to pay down your future costs. This was an important reason that customers demanded the opportunity to own their phone system instead of renting forever.
We respect this is your decision, and although we can also offer a hosted services option to you, for these reasons we chose to offer the premise-based system that we believe will save you money over the time you will use the system.
|
||