PHONE SYSTEM...Analog or VOIP?

Moving law office to a new location. We have 10-12 employees. Reliability is a HUGE concern. We want to avoid down time. Question is whether we should stick to traditional analog system/landlines or switch to VOIP? If so, is hosted better than having system in the office? This has become very frustrating because all vendors want to sell their brand and avoid talking about the cons.

Answer

Andy Hamilton (telecommunications specialist, Focus)
If you're having trouble getting hosted VoIP vendors to be up front about cons, try a different approach. Instead of asking them what their system lacks or what the cons are, find out what the process will be for you if you have a problem with the phones. Who's going to answer when I call your customer service line? You? A rep from your company who's nearby? Somebody in a call center three states away? How soon after making the initial phone call will a service rep show up to fix my problem? Another recommendation I make to businesses this size that are considering a hosted VoIP solution is to consider purchasing your own handsets. This way if you do have a provider you're not happy with you can switch vendors in the matter of a few hours.
7 Additional Answers
Jessica Groopman (Researcher, The Altimeter Group)
Luigi,
You are not the first to experience this frustration! The small business telephony market is a complicated one, not only because there are so many vendors in the market, but also because (as you mentioned) there are a number of platform options as well. To add to the confusion, telephony vendors are hardly quick to provide a true landscape of the market and how their product (and platform!) compare to all your other options.

As far as which option makes more sense for your business, it's hard for me to give you a definitive answer without more details. But here are a few things to consider:

Location:
You're a law office moving to a new location. Depending on how new the building is, this may afford you more flexibility wiring-wise. (You may be able to easily install a T1, piggyback onto/ partner with another business' cabling, for example.) Location also pertains to geography. Although internet connectivity is growing and evolving, not all locations are equal. For instance, if you're in an extremely rural area, it may be harder to configure the proper wiring to handle a VoIP platform with the reliability you're looking for.

Budget:
Assuming Location is a non-issue for you, and you decide to go VoIP, there are platforms out there that are truly quite reliable. However, to ensure 99.99% reliability, you often have to pay extra for the redundancy. In other words, if you go with a hosted VoIP solution for example, some vendors require buyers to install a T1 line regardless of your current infrastructure. This adds to costs. Your TCO is a huge consideration in general when evaluating the market because different vendors have different pricing models. (I'll get back to this in a minute...)

Hosted vs. On-Site VoIP:
This decision must be weighed against a number of variables including your long-term business plans (growth), learning curve, resources available to run the system internally, budget, integration/ interoperability requirements, feature requirements, customization requirements, and the importance of vendor locality (proximity)... among other things. Without going through each of those, the main (and most impactful) differences lie in *costs, *support, *scalability.

1. Costs: with a hosted solution, one typically pays a relatively low up front cost, but continues to pay over time forever (effectively leasing the service). When purchasing a system to own on-site, the up front cost is much higher, but then the system belongs to the business. Other cost considerations lie in infrastructure (can you leverage your existing hardware? existing wiring? etc.) Some businesses offer a full proprietary system (software, hardware, etc); Others offer software only, and the customer is responsible for providing the hardware; Others offer the software and integrate with a number of specific hardware models... Each model has different implications for the expenditure required. Other cost considerations with on-site solutions: upgrades, licensing, feature add-ons, scalability, etc. With hosted: consider costs surrounding monthly fees, feature add-ons, and providing the proper ISP connectivity.

2.) Support: with a hosted solution, the vendor runs and monitors the system at all times. They are also (obviously) to go-to when the system goes down or if the user has any issues. General learning curve is a consideration regardless of which system you choose. With solutions you host yourselves internally, it's typically a good idea to have the personnel in place to manage and monitor the system. (This is another cost consideration). Support is also worth mentioning in the context of your company/ personnel's general experience with running a phone system and/or the propensity for unseen issues to arise. For many SMB buyers, locality of the vendor is critical. Having a local contact 'right around the corner' affords many businesses the peace of mind they look for in a phone system, VoIP or not.

3.) Scalability: With a hosted solution, service is usually easily scalable, but only to a certain point. Although some hosted vendors tout clients in the large enterprise sector, there is often a ceiling in actual application. An example of an enterprise application using a hosted service might be a call center at a single location, or leveraging the ease of hosted by integrating it with another solution. In any case, with an on-site solution, it's easier (and sometimes cheaper) to grow the system long-term. Many on-site buyers view vendors as a business partner in this context, looking to grow the business with the system and the system with the business. Expenditure-wise, this is often the more sensible approach if you're certain your business will be growing substantially in the short/medium-term.

In (a little more than a nutshell), these are the main considerations to make when considering hosted vs. on-site vs. analogue. There is another question here http://www.focus.com/questions/information-technology/what-are-top-pros-and-cons-hosted-voip-telephony/#38587 you might find helpful. In summary, it's hard to rely on vendors for a transparent and fair comparison, but these are a few considerations you can make with the knowledge you already have of your own business (requirements, roadmap, infrastructure, budget, etc.).

Best of luck!
David Wessell
We're a hosted VOIP vendor, so this is a big topic for us.

VOIP can and should hit the high reliable marks of 99.99%, however no service provider can promise 100% uptime, it's just not feasible. However, neither can a traditional phone system. Phone lines can do down, and hardware on the traditional PBX can die.

The features of VOIP definitely outweigh those of a traditional system, as long as you have good and stable internet (And there a hard metrics by which to judge that).

And most vendors can do on-site or hosted, if they are willing.. The pros of hosted are if your internet at your location is down, then your phone system is still up. So remote employees are unaffected, and voicemail and IVR's are still operational. Hosted is cheaper to start with, as you don't have to supply a server.

The con of a hosted system is that it takes more bandwith (Internal calls are still going out over the internet).

Andy's comments are good. What's the company that your are dealing with? How quick will they respond. All of our customers have my cell phone number, and can reach me personally if they have an emergency. And he's correct again, that you should purchase your own handsets so that you can move to another vendor if you have an issue.

Thanks
David
www.itsgcorp.com
828-393-0900
Luigi Gonzavez
Thank you all for the info. VirtualPBX.com, Ringcentral.com, and Phone.com are the companies we have talked to. VirtualPBX is the only one with plenty redundancy plans in place. They give the 99.999% assurance. They prefer us to use their phones but have indicated that other phones may work as well. They are in Northern california and we are in Southern California. All they say is to make sure we have at least 2up/2down with repsect to internet bandwith/speed. We are looking to grow and have been. Would this be a good fit? Just don't really understand how the cost of hosted VOIP is more than in-house, down the line? Thx again for your insight.
Becky Mcginity (Technology Specialist, The Real PBX)
If you are a growing enterprise then Hosted VOIP is definitely a good option to switch to. You can easily switch vendors if you are not satisfied. Plus, any number of extensions can be added or removed easily, without actually disrupting your phone system. So scalability is more or less a non-issue with a reliable service provider.
Before making your decision consider a few points like:
Are you getting all the features you need and what is the level of scalability.
You don't want to be stuck with a provider who is only fulfilling your present needs and whom you will outgrow 3 or 4 months down the line.
This link might be helpful:
http://www.therealpbx.com/hosted-pbx-provider.html
David Wessell
Luigi,

An in house PBX will be cheaper over time if YOU manage it. However, if your still paying another company to manage it, it runs into the same pricing as hosted PBX's. At least that's how we do our pricing.

Here's the super key part no matter which way you go. Make SURE that whomever does your VOIP does QOS on your network. This is absolutely necessary, and if they state it's not, run away.

I'm more than happy to talk with you and answer questions without trying to sell you anything. Feel free to give us a ring.

Thanks
David
www.itsgcorp.com
Jen Beardsley (Small Business Services Research Specialist, PBXCompare.com)
With the advancements made in VoIP technology, its only big weakness is that VoIP is as reliable as your Internet connection. If you have a reliable Internet connection, VoIP is a good way to go. However, if you are unsure about your Internet’s reliability and are content with your landline or mobile service you have the option of keeping it and getting a virtual PBX system. Virtual PBX works with your current phones, whether they are mobile or analog (faxes can even be sent over them) and makes all of your company and personal phones reachable through one number.

I would highly recommend getting a hosted system for your office because of the time and money, not to mention frustration, such a system saves you. Hosted services are maintained by the provider, meaning you don’t need to troubleshoot issues or spend hundreds to have an IT person fix it.

Finally, if you want to have an inside look at vendors to find out the pros and cons of each service provider, I recommend checking out PBXCompare.com if you choose to go with a virtual PBX provider. If you find VoIP will suit your needs better, business service guide ChooseWhat’s business VoIP reviews are very insightful, also outlining the pros and cons of each service. Here's the link: http://business-voip.choosewhat.com/
Alex K. (Marketing Manager, CommPeak)
A VoIP provider should be able to provide you with Quality Of Service guarantee trying to hit that 365/24/7 99.999%.

It's moved beyond the question of reliability and on to quality of call. We're talking in terms of dropped calls, choppy connection etc being a major factor. Sometimes a VoIP provider is a re-seller, most of the Wholesale VoIP termination services out there provide excellent quality.

You can connect all your mobile and landline phones to VoIP. When a connection cannot be complete via VoIP, it will be transferred to PSTN (the standard telephone network), thus you have a lot of redundancy, with POPs located on all major world communication hubs, allowing to keep constant QoS.
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