For small business owners who are looking to implement a new phone system, or upgrade an existing phone system, there are a couple of options available: hosted VOIP, on-premise PBX (private branch exchange) system, or traditional phone lines. Traditional phone communications systems have been the standard for decades, but with the emergence of cloud-hosted and in-house VOIP systems, there are now cheaper and more effective options for business owners. In this article, we will take a look at the benefits of VOIP versus traditional phone systems.
The truth is, landlines are on their way out. It may not happen any time in the next few years, but plans are already being made to eliminate landlines by many large phone companies. For instance, AT&T plans on eliminating copper landlines by 2020.
Hosted VOIP is the latest and greatest phone system to hit U.S. markets. As many small businesses and large enterprises alike are moving to the cloud, hosted VOIP is not leaving us anytime soon.
For companies that do not wish to move their communications to the cloud, an on-premise PBX system is the answer. For this reason, the on-premise and hybrid systems are a safe bet to be around for years to come as well.
Hosted VOIP is virtually maintenance-free, as any issues or troubleshooting are performed by the hosting company.
With an on-premise system, a qualified on-call or on-site tech can be quickly called up if the system experiences errors or shuts down for any reason, so the issue can be resolved as quickly as possible.
With a traditional phone system, you will also need a qualified tech that can be reached quickly. However, due to the age and hardware requirements of traditional phone system equipment, it can be a costly job to repair or replace the aging equipment. It can also take some time as parts may have to be ordered or shipped.
Time is money, and if your communications system goes down, and you are not prepared, it could end up being very costly.
Businesses grow and expand over time—at least that’s typically the goal of most business owners. As your business gains more customers, your equipment needs will expand as well. If your traditional phone system is too small to handle the influx of calls, you will have to upgrade your entire system frequently in order to efficiently handle the new customers or clients. This can be an expensive option. Then what if your company has some downtime? You will be paying for a huge landline system that is not needed.
A hosted VOIP system is the best choice for businesses on the rise, as additional services can be added on an as-needed basis. This allows businesses to pay only for what they are using, and if the load becomes too big, additional services, features, and bandwidth can typically be added with just a few clicks or a phone call. Conversely, if your business experiences a downward spiral, features and services can be downgraded quickly, something that cannot be done with a traditional phone system.
An on-premise PBX system may not be that scalable either, but if your company implements a hybrid on-premise/cloud-hosted VOIP system, you can have the best of both systems: a scalable cloud-hosted platform combined with the power and control of an in-house system.
Costs are an important factor, especially for new businesses or small businesses that don’t have a large budget. There are two important costs that should be considered when comparing hosted VOIP and in-house PBX systems to traditional phone systems: upfront costs and feature costs.
- Upfront costs
Upfront costs are critical to many new businesses as they are still working with a small budget. A cloud-hosted VOIP system is the most efficient option for these companies, as it offers much lower upfront costs, with a monthly fee for only the service and features being used by the business.
An on-premise PBX system has higher upfront costs, but lower recurring costs.
A traditional phone system will have intermediate upfront costs, but higher monthly costs, and higher maintenance costs as well.
- Feature costs
Adding additional features to your existing service is a necessity as more innovative technologies are created. Conventional phone systems are typically unable to add new features without some type of hardware upgrade, and possibly an upgrade of the entire system.
In-house PBX systems are more compatible with new technologies and features, as the hardware is newer, and more third-party vendors are willing to add compatibility with their products and features.
With a hosted VOIP system, features can be added, removed, and fully-managed through the hosting company, typically without requiring any type of hardware upgrade.
A traditional phone system has higher costs, higher probability of errors and maintenance needs, and has breakdowns in reliability. Compatibility with new technologies is an issue, and any upgrades typically result in the upgrade of the entire system.
An on-premise PBX system has many advantages for companies that wish to maintain control over their features, hardware, and software, as well as companies that are not ready to move to the cloud. A hybrid system can enhance the communications systems for companies by providing cloud scalability and protection, while allowing the company to maintain control of their system. While it may have higher initial costs, the recurring costs are much lower.
A hosted VOIP system offers lower initial costs, as well as lower upgrade costs, a simple upgrading process that can typically be completed online or by phone, is completely scalable for increases or decreases in your business traffic, and is basically maintenance-free.