If you listen to the radio these days, you can’t go long without hearing an ad from Ring Central, 8X8, Ooma, Vonage, or one of the other pure cloud based telephony providers. Their pitch is similar- Unified Communications without the complexity and cost of owning and managing a telephone system. TRICOM has been selling, supporting, and monitoring the burgeoning cloud telephony market for many years, so we like to periodically share our perspective.
First, financially cloud telephony may or may not provide the best value. Most of the evaluations we do will show a higher long term cost of ownership for cloud telephony. There are some general exceptions- most notably the following:
- Very small businesses
- Multi-site businesses with certain parameters
- Businesses with high end call center requirements
Even if you fit one of the profiles above we highly recommend doing a long term Total Cost of Ownership analysis to be sure you are getting what you want.
The typical perceived benefits of cloud telephony and potential counterpoints are as follows:
| Perceived Benefit | Possible Counterpoints |
| Operating Expense vs Capital Expenditure (keeps telephony expense off the balance sheet) | Can accomplish the same thing with a Fair Market Value lease that will give you the option of buying the equipment at the end of the lease at depreciated cost. Also, you still have to buy phones, Power over Ethernet data switches or power supplies, and have a sufficient firewall/router. |
| Nothing to Maintain | Phones and networking equipment are the most significant hardware components in either a premise or cloud based acquisition. Most premise manufacturers provide replacement of core hardware and/or software support for a very low cost. |
| Outsource Moves Adds and Changes |
|
| Less in house staff required | This can be outsourced just as effectively |
There are also potential negatives to consider with cloud telephony:
- Poor quality/loss of connection is more likely – Unless you are paying for a dedicated circuit, your internet and phone service are sharing a single connection- all your communication eggs are in one basket. Low cost cable circuits are often shared services and are subject to bandwidth fluctuation. There is no end to end “Quality of Service” on most dual purpose (internet and telephony) circuits, meaning that there is no way to guarantee that voice packets that require real time transmission can be prioritized.
- No dedicated local support – for many Cloud telephony options it is either up to the customer to maintain their data network and troubleshoot any problems or the cloud provider will use a contractor with little liability and loose Service Level Agreements- much different than a local business with a stake in your continued satisfaction.
- Immature market – to date, the cloud telephony industry has been dominated by fairly recent startups. Most major manufactures and software giants like Google and Microsoft have entered the market with aggressive strategies.
- Never ending payment – it is important to keep in mind that with cloud telephony you have relatively high ongoing costs, and these costs often creep up if you want to add applications. Premise based systems tend to last 10+ years and todays systems are much easier to keep current than they have been historically
Other considerations:
- Hybrid solutions are starting to be offered from major manufacturers. Perhaps it makes sense to purchase the equipment at a headquarters location but go cloud at remote sites? Perhaps it makes sense to have your advance call center in the cloud but core telephony on premise?
- Should you keep your options open? Perhaps consider a cloud solution that can later be converted to a premise base system.
The Bottom Line
TRICOM can help you evaluate the best option for your business. We represent options from our traditional manufacturers – Shoretel, Avaya, Toshiba, and Digium, as well as pure cloud based options. Regardless of your choice, TRICOM can provide the local engineering support to ensure that you have the best possible experience. We can also help you shop, order, and install the appropriate network services for your solution.