MORE SMALL businesses are discovering the benefits and lower costs of voice over Internet protocol (VoIP) systems. According to industry analysts In-Stat/MDR, only 3% of surveyed companies were considering VoIP in 2003; the audience grew to 12% in 2004, and is expected to be at 34% by the end of this year.
VoIP allows users to make telephone calls using a broadband Internet connection rather than regular (or analog) lines. For large organizations with a dedicated staff of IT professionals this is not necessarily a daunting proposition. But for smaller businesses, migrating to VoIP may pose challenges that range from how to select a service provider to purchasing or leasing the proper equipment for maximum benefit. With more than 400 VoIP service providers in the United States, what’s the best methodology for sifting through all the options and making a decision?
TWO WAYS TO GO
Despite all the buzzwords surrounding VoIP, it’s important to understand that there basically are two ways for a small to medium-sized organization to set up a VoIP system. The first is to concentrate on equipment physically located in the firm’s offices. In this case a business must buy, install and manage its own VoIP capital equipment. This approach gives the security of having the equipment close at hand. However, the firm also bears responsibility for all maintenance, support and upgrades, which can become burdensome and expensive.
The second VoIP model is a hosted service method. Here a business doesn’t have to buy, install, manage or upgrade any equipment. The provider has designed the service so most of the equipment is in its network, and as a result the service provider maintains and manages it. While a business doesn’t own any telephone equipment other than the phones and key system already on hand, the hosted approach can offer a lower total cost, accommodate greater work force mobility and avoid the headaches and expense of dealing with equipment purchases and malfunctions.
Industry researchers at Infonetics have predicted that business-hosted VoIP service revenue will exceed that of managed Internet protocol private branch exchange (IP PBX) services by 2006, so companies may increasingly turn to hosted VoIP over the next 12 months. For small businesses this will require focusing on a few key items to boost the likelihood of choosing the right service provider.
Which is the right way for your business to go? Here are some things for small organizations to keep in mind when incorporating VoIP services into their network:
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Rip and replace vs. use of existing equipment. Some VoIP providers require customers to completely remove and replace their existing phone systems. This is perfectly acceptable if an organization’s system is at the end of its life or can no longer scale to meet present and future needs. This also helps a company that doesn’t have a phone system in place and is growing to a point where one is needed.
However, if the current phone system is still serviceable, look for a VoIP provider that offers a line-replacement service. This allows an existing phone system to remain in place and simply exchanges the higher cost phone lines from a standard phone company with a much lower-cost VoIP equivalent. Generally, the only additional gear needed to deploy this solution is a small device called a gateway. It’s used to connect the VoIP provider to the existing phone system.
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Current costs. Most VoIP services provide cost savings in the areas of local, long-distance and international calling, and sometimes toll-free calls as well. By studying recent phone bills and understanding the associated costs for each feature, a business will be better able to calculate a return on investment using current usage patterns. For example, an unlimited long-distance service provider won’t help if most of a firm’s outbound calling is between local offices.
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Phone cost. If an existing phone system is replaced, understanding the cost of the phones is key to calculating the return on investment of a VoIP system. Phones have varying levels of features and sophistication. In some instances, they’re offered free in exchange for term commitments and in others it’s the customer’s responsibility to buy them.
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Doing the math. Some service providers charge per seat (that is, per user or employee) while others charge per line. Generally, services that replace a phone system charge by the seat, but it’s not unusual to see services that replace phone lines and charge per seat as well. It’s important to understand the differences and do the math. One line can generally support about four employees. Depending on prices, a lower per-seat price may actually be more expensive than a higher per-line price. For example, one service may charge $40 per line/per month while another may charge $15 per seat/per month. Since each line supports four employees, the service offered at $40 a line is $20 less expensive per month.
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Appropriate and compatible features. Many VoIP service providers offer a wide range of features bundled with their offerings. For example,
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