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Many offices are looking at hosted VoIP as a solution to cut phone equipment and monthly service costs. I think you’ll find though that the reality doesn’t match the marketing hype.
First, lets talk about packages. An interesting aspect of many VoIP services is a lack of a local calling area. So if you’re calling in the same city, on a metered plan you pay the long distance rate. Right off the bat I think its clear Packet8 only makes sense if your office uses a significant quantity of long distance. An unlimited extension costs $59.99/mo with no equipment costs and $39.99 for activation on a 2 year contract.
So for a dozen extensions and an autoattendant over 2 years, you’re looking at a cost of over $18000. Keep in mind this doesn’t include the necessary bandwidth costs or the cost of your time for installation.
But certainly that’s less than buying an “expensive” phone system with professional installation and phone lines, right? Surprisingly no, a Talkswitch 248vs with 12 phones, professional installation, and unlimited VoIP lines costs under $9300 over 24 months. Admittedly the phone system is a larger up front cost, but even with lease financing charges its clearly less expensive to buy a phone system and more convenient to get professional installation.
Keep in mind businesses generally keep phones for more than two years. Packet8 costs about $6000 more each year for service in the following years. Admittedly a phone system failure could pop up and narrow the gap - though the $300-400 extended warranty really covers most risks nicely.
Aside from that, there’s the question of support and service quality. VoIP isn’t trivial to do right - you have to get a good service provider, ample high quality bandwidth, and proper network setup. At CNET the user reviews for Packet8 currently average 4.7/10 - a “mediocre” score. It doesn’t surprise me one bit, I know one Seattle firm and one in Kirkland that have had nothing but problems with Packet8. I couldn’t find a CNET review of Talkswitch, but the readers of Small Business Magazine voted it “Best VoIP System for Small Business.” Not only can you get local professional installation and support for Talkswitch, but the manufacturer offers free phone support for life.
Hosted VoIP seems like a great idea - its the “new” way to free yourself from “expensive” carriers and phone systems. But the reality is some carriers and phone systems vendors have great offerings to challenge and beat the service and pricing of hosted VoIP.
The Author: Kevin Selkowitz
About: Kevin Selkowitz is the founder and lead consultant for Selkowitz Technology, a Seattle-area small business systems consulting company. We focus on the four major technology needs of small businesses - phone systems, phone and internet service, servers/network infrastructure, and business applications.
This entry was posted by Kevin Selkowitz, on Tuesday, August 19th, 2008 at 3:48 pm and is filed under Phone Systems. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response on the right, or trackback from your own site.
