Last week we reviewed the benefits of buying a cloud-based system. But before you can make a purchase, you need to understand all of your options and what phone system is truly the best for your company and needs. Read part 2 of the Choosing a Cloud-Based Communications Solution article to learn about premise-based systems.
Invest In a New Premise-Based System
Premise-based solutions have their own advantages to consider. While cloud communications are growing, the overwhelming majority of the market still uses premise-based phones and applications. The premise-based phone system is very different today from 20 years ago. Today’s systems look like cloud solutions; the difference is that they are owned by the customer. A premise-based solution can be completely virtualized and reside in a data center, not in a phone closet. The premise solution can have all of the same Unified Communications (UC) and other features that a cloud solution offers. There are good reasons to choose a premise-based system. Here are a few key reasons to consider.
1. You want the best deal.
Cloud solutions are great if you want to just pay monthly. However, investing in a premise system is guaranteed to be cheaper over time. With cloud, you are paying for convenience and not having to invest capital.
Consider these numbers. The average phone system ends up costing the customer around $500-$1000/user. This includes phone, licensing, software, etc. Compare that to a cloud-based system, which might cost your $20-40/user/month. At that rate, the premise-system becomes more cost-effective right around month 25. At that point, you continue to pay the full charge for the cloud solution, but you’ve recouped most of your costs on the premise system.
The premise system may continue to cost 10-20% of the original price in service feeds, but that’s $5-$20 per user per YEAR compared to the $240-480 per year you pay for the cloud service. Even if you get a smoking deal on the cloud service, say $12/user/month, the cloud service will continue to charge you much more over the long-term.
If your buying decision is primarily price-driven, then the premise solution is the best for you. Other financial considerations like availability of capital and desire to move the cost to an operating expense actually shouldn’t influence your decision. The premise-solution can be leased at very affordable rates and deliver the same benefits as a cloud service.
2. Reusing your investment in phones.Another way that premise solutions can deliver the best deal is by letting you reuse your existing phones. If you are an existing business then you’ve already invested in a great deal of telephone hardware. Premise-based solutions are generally much better at allowing you to reuse that hardware. Most older phones require different wiring than cloud services use and must be plugged in to local equipment of a specific type. This means that a cloud solution can’t reuse those phones.
To reuse a phone on cloud, you must already be using an IP phone and that IP phone must use a specific technology called SIP. Many Voice Over IP providers didn’t use SIP for their phones until very recently. They used a proprietary protocol that would make it hard for any other service to use them again. Further, many cloud vendors only support a limited set of phones to ensure a high-quality offering. It makes sure that they can offer a consistent product. If your phone isn’t on that list, even if it’s a SIP IP phone, then you can’t use it with their service.
A premise-based solution can often let you reuse the existing phones you have while providing newer capabilities and applications. This can save you thousands of dollars. For example, Vertical offers solutions that support phones from older products like Vodavi, Comdial, Intertel, and Mitel. If you have any of those brands on your phones today, there’s a good chance that Vertical can offer you a new solution while not having to replace every phone.
3. The location doesn’t have reliable internet service.The Brookings Institute reported that 22 million Americans still don’t have access to broadband service (defined as 25 Mbps). The average phone call takes up 100 Kbps of data. Video and collaboration calls take significantly more. Without access to quality broadband service, businesses can find that their communications are in competition with all of the other internet traffic the business generates (cloud applications, e-mail, browsing, file transfer, etc.) These other services can handle limited bandwidth (it may take a couple of more seconds to get that e-mail), but voice and video communications cannot. These are real-time communications technologies and delays as small as 100 milliseconds can start to seriously degrade a phone call. If your business location doesn’t have access to broadband, then you need to invest in a premise-based system which can guarantee call quality using older technologies.
An even bigger problem is the reliability of internet connections. Your service may have enough bandwidth, but the connection may not provide reliable service for your real-time communications. If your location has constant outages, or you can’t reliably stream video today, then a cloud solution may not work well at all.
Vertical offers a network assessment that can determine if your broadband solution is ready for the challenge of Voice Over IP and video. Our testing runs for several days to discover hidden problems that may occur only sporadically. This assessment can help you determine if you really need to put a premise-solution in instead of a cloud service. Ready to get started? Sign up for your Network Assessment now.
4. Internal communications are critical to your operations.Many companies just focus on their external customers when planning for a business communications solution. While the customer is always critical to the success of your business, often companies forget how important internal communications are.
If your business has a large number of employees at a single location, or there is significant internal communication, then a premise solution might be the best bet. Cloud phone service requires a connection to the internet to be functional at all. If the internet connection is down, then no one can communicate internally. Take a minute to consider how detrimental that would be to your company’s business.
The cost of the lost productivity in an outage can be staggering. The Ponemon Institute estimates outages can cost companies $7,900/minute! With 91% of business reporting a substantial outage in the last 24 months. The hospitality, public, transport, and media sectors were particularly vulnerable to these problems. If your business is dependent on internal communications, then consider opting for a premise-solution to allow internal business to continue. And consider discussing disaster planning with a Vertical Communications solution engineer.
5. You need extremely powerful or specific applications.Cloud solutions offer many standard features and really excel at mobile communications, video, and contact center. However, premise-solutions still offer more complex and deeper voice applications than the cloud does. If you have need of extremely specific or complex solutions, then a premise-solution may offer the only option.
For example, Vertical delivers one of the nation’s leading pharmacy refill applications in over 9,600 name brand pharmacies nationwide. This solution allows customers to call in and quickly order a refill on their recurring prescription. It is only available on a premise system today.
Premise systems also offer a much deeper array of specific features on the phone themselves. If your business depends on these features, then a premise solution is your best choice.To learn more about choosing a cloud-based Communications Solution, click here to read part 3 of the series.