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Hosted vs Premise Telephony? It’s like buying vs renting a house.


Much is being written currently about the impending demise of the PBX as market perception becomes one of a shift towards hosted or Hosted v CPE2cloud telephony services. So, has the PBX really had its day or is it all just ‘smoke and mirrors’?

Some see the commercial comparison as a bit like buying versus renting your house. The upfront costs, furnished or unfurnished, fixtures and fittings, getting the landlord to make repairs and of course the value of your investment when you decide to move.

When it comes to the topic of hosted (or cloud) telephony, recently we have seen much press about ‘Skype for Business’, the new buzz phrase quickly replacing MS Lync conversations. Of course we have all been asked those typical questions around Lync: should I include Lync voice, what about RCC, how do I ensure QoS, what are the implications on my current connectivity, what servers do I need? Indeed some of these questions are pertinent be the conversation Lync based or wider around hosted voice solutions in general.

So, why would a customer wish to consider hosted / cloud telephony? There are of course already a wide variety of options available to choose from, with more entrants coming into the market it seems almost weekly. Taking a more generic view some of the more obvious attractions might include: perceived very small capex required to setup, feature rich functionality, location independence and flexibility, various connectivity options, attractive inclusive calling bundles, built in call reporting. In essence a pretty elegant offering at a cost predictive ‘per user per month’ pricing model.

Something not always anticipated by a customer when exploring the hosted solution are the upfront costs required to deploy. These can often be as much as a 4 or 5 figure investment and might include: handsets (although there are some FOC opportunities available for ‘extended / connected terms’), new connectivity, new routers, wiring and PoE, installation engineering, training and support.

Finally, hosted feature sets, albeit fulsome, sometimes fall short in some areas when compared to some premise based alternatives. helloExamples might include: conference calling, call recording (PCI/DSS/FSA compliance), managing mobile calls through the server, management information and application integration.

When comparing the TCO (Total Cost of Ownership) of a hosted solution versus a premise based the breakeven point still seems to typically calculate at between 30/36 months, beyond which the hosted solution will begin to have a negative impact on the operating costs line on the company balance sheet. However, at relatively low set up cost and extremely competitive monthly plans for many hosted is the way forward.

It’s a bit like buying vs renting property really.

Sounds almost too good to be true. And the fact of the matter is that hosted offers for many an attractive and rich proposition that exactly fits and best suits their business needs. However, as with all things in life, one solution does not necessarily work for every possible scenario. Or maybe it does!

We are starting to see conversation around and the emergence of solutions where customers will be able to integrate premise based solutions into cloud options, in a hybrid type of deployment. An interesting article on this can be found in CommsDealer following an insightful interview with Will Morey, Co Founder and Director of the UK exclusive Ericsson-LG distributor Pragma Unified Distribution –   http://commsbusiness.co.uk/features/clouds-hammers-nails-and-the-vitality-of-the-pbx-market/

Indeed in a recent blog on our won website, Mark Deakin, Partner Technology Strategist at Microsoft explores the merits of hybrid thinking when making that cloud versus premise consideration – https://www.evoketelecom.com/blog/have-you-still-got-your-head-in-the-clouds/

So, will it be that in the coming weeks and months we see yet another marketing metashift from hosted to hybrid? Time will tell.

If you would like to know more about premise, hosted or connectivity solutions feel free to contact the Evoke Telecom sales team for free on 0800 840 3688 or mail us on [email protected] where we will be more than pleased to offer our help and support.

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