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Business Telephone System vs. Hosted Applications

Posted by Gregg Haughton on Apr 26, 2011 4:24:00 PM

Frequently, we are in a competition not with another business telephone system company, but with companies selling hosted solutions. For years, pundits have been touting a new era in telephony - the end of the installed business telephone system.

Remember Centrex in the 80's -

Don't get me wrong, there are applications where a hosted solution is a viable solution. However, the two biggest attractions of a hosted business telephone system, low cost and easy of configuration changes, is most often elusive.

Let's look at an expample. We recently replaced a hosted solution which had been installed at a real estate company's four offices. The office had between 30 and 50 phones. They were paying an average of $2200 per site per month for phones and traffic for the agents. That translates to $105,600 per year. Over three years the cost is $316,800.

Our installed IP solution was a one time cost of $98,000 and monthly cost of $600 per site for PRI services and a toll calling plan. Add a support plan that allows unlimited program changes, software upgrades, and a parts and labor hardware warranty for $780 per month and the cost over three years is $212,480.

That's over $100K less. Over 5 years the savings is $239K or enought to buy the system over 2.4 times.

The lesson is that although the idea might seem attractive - no up front costs, no maintenance costs, easy changes - make sure you compare the costs over the time you expect to use the system. It might be surprising...



Topics: Business Phone System, VoIP Phone System, Hosted Phone System

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