The Life and Times of Seattle’s Small Business Systems Consultant. Articles and advice on small business phone systems, phone and internet services, VoIP, and all things technology related.
Selkowitz Technology | Seattle’s small business network and telecom consultant
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Hosted VoiP PBX services are very tempting to small businesses as many offer unlimited long distance and minimal startup cost as there’s no PBX to buy. The reality is the dollars usually don’t add up to a winning proposition.
Take for example a mortgage company I recently talked with. They’re growing and at their next stage of growth they’re looking at needing a phone system with 30 phones and 14,000 minutes of long distance. Given their current long distance bill and concern over paying $10000-20000 for a phone system, they looked VoiP and found they could get all that for $1300/mo.
And at first glance $1300 seems like a bargain, but its not. They were paying too much for long distance, we could deliver the 14,000 minutes for $410/mo ($.0293/min) and a dynamic integrated T1 for $549. I got a quote for a refurbished Toshiba PBX for $10,000 installed.
Still, these numbers look bad, but just do the math:
(phone system cost - VoiP equipment cost)/(VoiP monthly cost - (T1 + LD costs)) = months to break even
In this case assuming no VoiP equipment cost (there probably is some, we just don’t know how much)
(10,000 - 0)/(1300 - (549 + 410) = 29.33 months
In other terms in 2.4 years the traditional system cost breaks even with VoiP even after paying for all that equipment and long distance! Of course every month after that you save money by not having 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, February 20th, 2007 at 12:23 am 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.
