Hosted VoIP Systems — A Small-Business Case Study. . . What’s the true cost of a hosted VoIP solution?

You may be surprised to find out why one small business posits that on-site VoIP systems are a “no-brainer” for getting better features and savings.

Pixel Productions Inc. is a small, boutique, brand development agency located in Southern Oregon. Like many small to mid-sized businesses, Pixel was faced with a decision on what type of business phone system to purchase. Typically, the three main factors regarding business phone systems are: price, quality, and reliability. Most businesses shop price comparisons and end up choosing cheaper, hosted VoIP phone service providers such as Vonage or Nextiva with the hopes of saving money. That’s what Pixel did at first, and like many other small businesses, they discovered there are often hidden pitfalls associated with hosted VoIP phone service providers.

What’s the difference between hosted VoIP and an on-site VoIP phone system?

A hosted solution is just that—the service provider hosts the service pack (usually cloud based) as opposed to the business owner having all of the equipment at their location, including the IP PBX, cables, routers, and other network devices.

What is the real cost difference between hosted and on-site VoIP?

VoIP costs can be deceptive to the average, inexperienced business owner shopping around for services. Hosted solutions such as Nextiva are attractive to shoppers because they tend to bundle equipment and services, giving the appearance of a lower overall cost. There is a substantial up-front cost associated with buying your own equipment when setting up an on-site VoIP system, and smaller businesses tend to shy away from spending $5-8,000 on an initial equipment purchase.

Pixel ran into this same dilemma. When they first made the switch from analog to VoIP, they moved to Vonage due to low initial equipment costs and a competitive monthly rate. They quickly realized that for their business, this service was lacking many features and capabilities. Chris London of Pixel noted that, “Call quality never seemed up to par. We experienced dropped calls frequently, and when someone was on a call and a new call rang in, it interrupted the existing call. As a business, we found it unacceptable to be on a client call and repeating every-other word when another call was ringing in.”

This problem is what led Pixel to switch from Vonage to Nextiva. Nextiva is another hosted phone service provider for businesses and their service was able to address the problem of call interruption. To join Nextiva, Pixel had to purchase all new equipment, which they did through Nextiva in order to eliminate the possibility of technical and compatibility issues.

When the equipment arrived, Pixel realized that without local support, they would be forced to set up and configure the system on their own. After they installed the equipment, the system initially seemed to be working properly. Over the next several months, however, call quality progressively worsened: calls began dropping and the phone system began to randomly go offline. Reliability once again became a very serious issue, as did tech support. Hosted solutions are unable to assist on-site and can only troubleshoot equipment remotely. This, unfortunately, does not always provide a clear picture of the problem.

After several months of phone calls back and fourth with tech support, along with equipment being replacement and more troubleshooting, the problems still weren’t resolved. Fed up with remote servicing, Paul Quinn of Pixel Productions then reached out to Adept Networks, a local business phone provider to assess the problem on-site. Paul plainly explained, “Our current system isn’t working and we can’t get the help we need. Our business is suffering due to our communication system.” Frustrated, he added, “I don’t care what it costs—I just need it to work. Can you help?”

Adept assessed the equipment, network, cabling, bandwidth, and internet provider to understand what was happening and how to fix the issues. Adept was able to determine that the equipment sent to Pixel was never capable of handling the number of phones and computers on their network. The switch and the router were bottlenecking, causing equipment and service failure. Adept Networks presented their findings and recommended certain solutions.

Did Pixel have to buy new equipment again? Yes, and the following is what Adept recommended for their needs. This equipment is perfect for small to mid-sized businesses. The Allworx phone solution chosen for Pixel allows for robust business communication features that expand with the business as it grows. Hosted solutions do not have the same growth potential and instead, end up piecemealing new equipment and new service bundles together at higher monthly fees.

The Allworx 6x system is an all-in-one communication system integrating a feature-rich phone system, advanced IP phones and powerful software features that substantially improve your company’s productivity while saving you on-going monthly costs.

Allworx 6x system

Allworx-6x1-300x112 6x is an excellent choice if you’re evaluating new phone and PC network systems for any of the following reasons:

• Your business is moving or your needs are changing and growing

• You’re upgrading an outdated phone system

• Your current system is not meeting your needs

• You’re looking to save 30-50% on your telephone and operational costs in the long-term

Key features of the 6x:

Designed for companies of up to 60 employees per site
Supports VoIP (SIP) trunks and six traditional phone lines
Fully supports every Allworx IP phone and two traditional phone handsets
Built-in, 8-port voicemail with Unified Communication
Optional eight-seat conference bridge
Compact flash for high reliability
Energy Efficient design for maximum energy cost savings

Allworx 9212L IP PhoneAllworx 9212 and 9212L IP Phones:
Allworx 9212L IP Phone

These phones come with 12 programmable function keys and support up to 12 line appearances; both the 9212 and 9212L are powerhouse communications tools. These phones can be programmed for any combination of PBX call appearance, key system line appearance, queue appearance, speed dialing, direct station dialing, and busy lamp field.

The 9212 is a sophisticated and flexible state-of-the-art IP phone designed for the business user who needs rich features, a friendly user interface, and superb voice quality. The Allworx 9212L is the newest extension to the complete family of backlit phones. The vibrant, high-resolution full backlit display is at the heart of the Allworx 9212L

Key Features of the Allworx 9212 and 9212L IP Phones:

• Huge and easy-to-read 192 x 64 graphical display

• 9212L has a high-resolution full backlit display with adjustable brightness

• 12 programmable function keys

• Supports up to 12 line appearances

• 4 Soft Keys

• High-Fidelity Voice Handset

• Reversible handset hook

• Dedicated Park and Hold feature keys

• RJ-11 headset port

• Navigation keys

• Power over Ethernet (PoE)

• Visual Ring Indicator

• 10/100 Ethernet switch

• Hearing aid compatible

• Speakerphone

• Dedicated presence button

• Adjustable stand/wall mountable

• 9212L is supported with System Software 7.3 and beyond

Netgear 16-Port Switch

This 16-port switch is one of the key components that eliminate network bottlenecking. Most hosted solutions will only provide a basic 4-port switch, which is not going to be enough to handle your computers or other network devices in addition to phones.

Netgear FS116E 16-Port Ethernet
Key Features of the Netgear 16-Port Switch:

• Use as a Plug-and-Play switch or use the configuration utility for simple setup

• 16 ports deliver up to 200 Mbps bi-directional bandwidth on each port

• Quality of Service (QoS) for prioritizing network traffic

• Virtual LAN (VLAN) support for network segmentation and security

• Troubleshoot connection problems via cable test

• Bandwidth management to avoid network congestions

• Network traffic monitoring

• Port mirroring

• Broadcast storm control

An on-site VoIP solution:

When asked if Pixel could be used as a case study Chris responded, “Definitely! I would like to prevent other businesses from going through what we just went through. Going with a local provider to assess and install your equipment is the way to go. It would have saved us thousands had we done it right to begin with, especially with all of the network cabling that had to be installed in multiple offices.”

Going back to the initial cost of purchasing on-site equipment, most businesses don’t realize that local business phone providers such as Adept Networks amortize the up-front cost over the first year. The monthly phone service fee is just as competitive as Nextiva, and by the end of the first year, Pixel had reached the break-even point with their on-site set up. From that point on, Pixel was able to start enjoying cost savings in their VoIP phone system.

When asked to review the services that Adept Networks provided to Pixel, Paul Quinn stated, “Aside from a system that actually works and grows with our business the way it should, there is the added benefit that when I have a question, or if there were to be a problem, Adept sends a tech right over, providing on-site managed support when I need it. I regret that we have made so many mistakes with our communications system, but am thankful that we found Adept and don’t have to worry about our business telephone anymore.”

Author: Chris London is the art director for Pixel Productions Inc., a strategic graphic and web design company where his focus is to continually find creative and innovative strategies to implement with businesses who need brand design and marketing with impact.