21 Feb In-House PBX+SIP Trunking vs. Hosted Cloud Phone Service: What’s the Smarter Phone System Investment?
When it comes to making wise investments, organizations need to borrow a page from the consumer playbook and “get the most for the least.”
This doesn’t necessarily mean getting the cheapest price. It means that organizations need to assess their needs, conduct marketplace research, evaluate potential solutions, and select the one that delivers the most long-term value.
However, just like consumers, sometimes organizations can mistakenly head in the other direction: getting the least for the most. And since this unfortunate fact doesn’t come to light until after a purchase decision is made, organizations in this situation are forced to absorb the excess costs or purchase a replacement. Either way, it’s costly, time consuming, risky and frustrating.
Here’s what the above has to do with business cloud phone systems. Some organizations are led to believe that they’ll get the most for the least by purchasing a low cost in-house PBX system, and then purchasing relatively inexpensive SIP trunks (these are telephone line trunks delivered over IP using the SIP protocol, and are necessary for an in-house PBX system to function).
Yet, like some ideas that sound good in theory, this is typically NOT a wise money-saving strategy. Here are the key reasons why:
- Deployment Costs
One of the primary cost advantages of a cloud phone system vs. a conventional landline hosted system is that organizations can use a single voice/data network vs. purchase separate networks.
However, this is often not the case when using an on-premise PBX with SIP trunking. To prevent data network degradation— and angry end users — many organizations are obliged to purchase a separate internet connection. This can cost anywhere from hundreds to thousands of dollars a year, depending on the number of users.
- Training Costs
It goes without saying that a cloud phone system will only generate efficiencies and advantages if people use it! However, end user training isn’t included in the on-site PBX+SIP trunking strategy. Organizations must purchase this separately from a consultant or telecommunications firm.
However, this isn’t a cost category with hosted cloud phone systems. Training is included in the package, because a phone system that isn’t being used properly and fully isn’t an asset — it’s a liability.
- Support Costs
Perhaps the only thing worse than having unhappy IT staff, is paying for unhappy IT staff. Yet that’s the scenario that many organizations face with on-site PBX+SIP trunking, because instead of completing the tasks in their job description, IT staff are bogged down and held back by endless support requests, software upgrades, configurations, and so on.
As such, organizations must pay higher labor costs (i.e. their IT staff is less productive and/or they must hire additional IT staff), or they must purchase a pricey maintenance contract.
With a hosted cloud phone system, all support — including handling end user inquiries and performing system upgrades/updates — are covered by the off-site solutions provider. And since hosted cloud phone system deployments use managed routers, many system configurations and changes can be made remotely during off-hours.
- Electricity Costs
On-site PBX systems need greater computing power, both for regular operation and for cooling. They also need larger uninterrupted power supply (UPS) units to run the system in the event of a power outage. This translates into hundreds or thousands of dollars a year in additional electricity costs.
With a hosted cloud phone system, power requirements are minimal. Only Power over Ethernet (PoE) switches and modems/routers need power, along with a relatively smaller network of uninterrupted power supply units.
The Bottom Line
When organizations do the math and add up all of the costs of ownership — both direct and indirect — they typically arrive at a surprising conclusion: the money they expected to save by going with on-site PBX+SIP trunking is not just offset by the added expense, but eliminated. In other words: they would have achieved their goal of “getting more for less” by choosing a hosted cloud phone system with carrier class features and services from day one!
To learn more about your options, and to get a clear and accurate understanding of the REAL costs of on-premise PBX+SIP trunking, contact the Carolina Digital Phone team today at (336) 544-4000. Your consultation with us is free.