HOW WE HELP CUSTOMERS DECIDE BETWEEN PREMISE AND HOSTED (CLOUD) PHONE SYSTEMS
Customer who need to upgrade their communications systems often struggle with the decision to go to a cloud-based option versus replacing their old office phone system. At City, we believe in the cloud model so much we’ve built a whole business around it, but that doesn’t mean cloud is the best option for every customer. How can we help people make an educated choice when presented with the two options?
SHOULD CUSTOMERS JUST UPGRADE THEIR OLD PHONE SYSTEM TO THE LATEST VERSION?
There are merits to owning a phone system versus subscribing to business communications as a service (hosted phone systems). Owning the system means you have direct, physical control over it. You can secure it within your IT infrastructure. If you need to move or expand it, you can shop around for the best deal on upgrades and enhancements. And once you spend the money to buy it (lay out the capital expenditure), you should have a lower annual ownership burden.
But the arguments for ditching the physical phone system for its virtual successor are compelling too.
To start with, cloud-delivered/managed phone systems (let’s agree to call them hosted phone systems for the sake of this article) typically include the maintenance and service in the subscription price. Which means that you get all ongoing support and upgrades at no additional charge.
Then there’s the argument that hosted phone systems are more portable. On a premise-based system, vendor help is sometimes needed to make physical changes to your system. If you need to re-locate end-points on your hosted phone system, simply moving the end-point or making a software change gets the job done.
If your communications systems are critical to your business, you need to plan for disasters. Not all premise-based communications systems have redundancy and resiliency (failover and backup) options. Hosted phone systems however, because they are services designed to meet the needs of multiple clients, are built in high-resiliency and fail-resistant data centers. They are also engineered to handle local disasters more robustly (should the Internet connection that runs the service go down, the service should be able to route calls to a new data path, another office, even cell phones if needed to keep you up and running).
Hosted phone systems are more easily scaleable. With a premise-based system, you pay for every expansion and own any excess capacity once it’s bought but no longer needed. In the cloud, expanding and contracting the system to meet your changing business environment is as simple as adding or reducing subscribers, usually with little to no penalty.
Finally, you pay for hosted phone systems as a fixed monthly subscription cost so they appear on your accounts as a simple expense (there are tax benefits to this as well as the benefit of not having to finance what can be an expensive piece of company infrastructure).
Does this all mean that hosted communications systems are a better deal that premise-based phone systems? The way we guide customers to answer that question for themselves is by helping them work up a Total Cost of Ownership Analysis.
HOW TO CALCULATE TOTAL COST OF OWNERSHIP? Based on the progression of communications systems, we feel strongly that the best total cost of ownership time frame to compare is five years. A physical phone system may last beyond five years, but new capabilities, options, and advances in computing power will render it outdated within that time frame.
To build the hosted-side of a Total Cost of Ownership comparison between premise and hosted communications systems, you work from the total monthly costs of the subscriptions you need. Make sure you includes all seat licenses, trunking, e911 services, and application licenses (like unified-communications clients and contact-center seats). Account for up-front installation and setup charges. And if the phones are not included as part of the monthly subscription (they usually are), factor in the expense of buying the desktop equipment you need.
The premise-based side of the comparison is more complex and should include the following:
WE CAN HELP YOU DEVELOP A TCO FOR YOUR CUSTOMERS
When you do this analysis, will premise-based systems be cheaper over the expected life of the system? They might. If they are, then you can focus the decision in on the cost of the benefits to cloud (the costing model, resiliency, scalability, portability, and the value of always having the newest technology available, etc.).
If you have an opportunity that is struggling with how to approach the decision between purchasing their own replacement communications system and moving to a cloud-based solution, we can help you develop a customized Total Cost of Ownership budget to compare the two.
Contact your Channel Manager (or hit me up directly) for help.