Hosted VoIP Value Proposition

Hosted VoIP provides a significant value in comparison to traditional voice solutions. Table 2, below, summarizes the value offered by each particular voice technology. Delivering voice as a hosted service allows organizations to realize financial savings, provides greater overall reliability, as well as enhanced productivity.

Financial Savings

The primary benefit mentioned, when discussing Hosted VoIP, is the considerable financial savings. Institutions can save on both initial capital expenditures, and ongoing operating expenses. These things make Hosted VoIP particularly attractive to institutions of various sizes. Additionally, Hosted VoIP solutions are customizable to fit current budgets and projected growth requirements, without requiring forklift upgrades. Additional incentives for Hosted VoIP include excellent ROI and cost savings through increased staff efficiencies and technological effectiveness.

There are significant long term financial challenges that present themselves with on-premise systems; staffing requirements, system upgrades and on-going maintenance constitute costly, ongoing expenses. Hosted VoIP eliminates these costs by providing a reduced total cost of ownership to organizations. Traditional telecom expenses, combined with IT infrastructure in a Hosted VoIP solution provides the perfect opportunity for IT directors and facilities (M&O) management staff to focus their efforts on more critical site issues, rather than worrying about telephone system availability.


Given the current economic environment, shrinking IT budgets have businesses more concerned than ever to reduce the financial impact of their communications solutions. Hosted VoIP can frequently deliver the greatest return on investment for telecommunications budgets.

Low Capital Requirements

Hosted VoIP has very low initial capital requirements, especially in the event that a data network already exists. Commonly, IP phones are the single necessary capital expenditures. By comparison, Analog PBX and On-premises IP PBX technologies require large capital outlay for the servers, necessary phones, and costly maintenance and licensing contracts. These costs often can accumulate into the millions of dollars. Therefore, many institutions decide to avoid upfront capital-intensive solutions by utilizing a Hosted VoIP provider.

Standards-Based Equipment

The equipment necessary for Hosted VoIP can be easily reused or redeployed to work with other equipment that supports the same open standards (i.e. standards-based equipment). This also offers flexibility and equipment options from a wider variety of vendors, and typically results in lower cost. On-premises IP or Analog PBX solutions, however, commonly have equipment that is proprietary and can only be used with that particular vendor’s equipment. Proprietary equipment cannot be reused or redeployed in most circumstances, resulting in “vendor lock-in.” Standards-based equipment also results in an inflexible solution, using limited equipment choices and higher hardware costs.

Low Risk of Obsolescence

Given the rapid changes in technology, it is common for equipment to quickly become obsolete. Hosted VoIP limits this risk in many ways. Firstly, because equipment requirements are low, the risks are low. Secondly, because the Hosted VoIP provider owns and manages the voice infrastructure, the risk of obsolescence is shifted to them. Thirdly, Hosted VoIP gives institutions the flexibility to easily increase or decrease the number of lines as the size of their organization changes.

Converged Voice, Data, and Video Lines

Consolidating networks into one converged network reduces maintenance costs and saves on the number of necessary access lines. Often, current voice traffic and data traffic utilize two separate internet access lines: one for voice, and another for data. After merging the two networks into one, one of those access lines can typically be dropped and used solely for backup purposes. They can also be combined to allow for more bandwidth on the single, converged network. In either case, access costs will be lowered, or the available bandwidth will improve. The above is true for all types of data transport service, including: DSL, Cable, T1, DS3, and fiber.

The benefits are especially obvious when Hosted Video is deployed. Rather than purchasing a dedicated ISDN (or similar connection) expressly for video equipment, the converged network can be used to provide connectivity on an as-needed basis. When no video is being utilized, the bandwidth is available to be used for other network purposes.

Utilizing Stranded Capacity

In some cases, converging voice and data can help to eliminate “stranded” capacity. This is capacity that is not being consistently utilized, and is therefore wasted. Adding voice onto an existing internet access line will increase the traffic over the connection and utilize the stranded capacity. This creates a more cost-effective solution for the existing infrastructure.

Internal Cable Infrastructure

Existing voice and data networks are separate in many districts. Voice is transported over traditional Cat 3, while data is on an IP network. Many organizations are seeking to consolidate and transmit both voice and data over a single physical network in order to decrease costs and to increase their options. Voice, video and data consolidation on a single, physical network provides many benefits to support staff. This is done by reducing operational costs, maximizing the efficient use of network resources and by providing a flexible platform. These capabilities are critical when adapting to a constantly evolving, and increasingly competitive communications landscape.

Simplified Support

Hosted VoIP allows institutions to receive both voice and data service from one service provider, and only one number to call for both questions and support. This helps to simplify the support process and to help minimize the size of the support staff.

Simplified Moves, Adds and Changes

Organizations incur some of the largest telecommunications expenses as a result of moves, adds and changes (MACs) to their existing phone systems. Traditional phone systems require intensive effort whenever an employee moves offices or locations; often by third-parties that charge hourly or per-visit fees. Thanks to Hosted VoIP , these changes can be quickly and easily performed by the enterprise administrator through a point-and-click web-based interface. Many changes can even be handled by end-users, themselves. In a Hosted VoIP environment, MACs can be managed in mere seconds, are completed in real-time, and do not require any budget expenditure.

No Payment Until Service Is On

With Hosted VoIP, monthly service charges are typically not billed until the service is turned on and fully functional. This provides additional flexibility to the organization with regard to the start-of-service date, and reduces wasted spending due to duplicate services.

Predictable Monthly Expenses

Hosted VoIP allows organizations to know exactly what their telecommunications costs will be each month. There are no unexpected costs associated with software upgrades, licensing, or hardware maintenance. In addition, local and long-distance calling are typically included with the service, without any per-minute charges. This makes monthly budgeting predictable and easy.

Flexible to Organizational Changes

Today’s workforces are constantly growing and shrinking—creating problems when using traditional phone systems. Legacy solutions may not easily expand or contract if the workforce changes over time. Hosted VoIP services allow institutions to buy only what they need, with the ability to add or remove lines as necessary. Organizations only pay for the number of lines needed at any given time. Associated configuration changes are also provided at no charge.

Greater Reliability

The ability to communicate is a critical element of success. For this reason, voice reliability cannot be compromised. Hosted VoIP has been engineered with this in mind. In fact, Hosted VoIP has distinct reliability advantages over both traditional voice and on-premises IP PBX services.

Professionally Hosted Voice Infrastructure

Few organizations would consider themselves expert data center operators. But On-premises PBX solutions require organizations to do just that—host their own phone system at their own location, and at their own expense. If something goes wrong, the organization is responsible for correcting the error. Given the importance of communication, this creates a large burden on the institution to be prepared for the unexpected.

In contrast, Hosted VoIP relieves the institution of this responsibility. Since the phone service provider owns and manages the server equipment, it is responsible for its upkeep. It is much more cost-effective for the service provider to hire experienced IT managers and data center operators because they can spread the expense across a much larger user base than any one customer could.

Managed Class-of-Service Internet Access

A select group of Hosted VoIP providers offer managed class-of service internet access. This access refers to the active prioritization of voice and video over other types of network traffic. When this type of internet access is offered by the provider as part of the service package, the institution can be confident that voice quality will be maintained even during periods of network congestion.

Disaster Recovery

Users of Hosted VoIP have a variety of disaster recovery options. In the event of fire, earthquake, severe weather, or even a simple failure of their internet access lines, users have the ability to reroute all calls to wireless numbers, a home phone or a third party answering service. Many hosted VoIP solutions can be set up to automatically make these changes for users in the case of a disaster. IP phones can also be taken off site, where they can be used with any high-speed internet connection and continue to function as part of the Hosted VoIP system.

The location of the servers in a Hosted VoIP solution is another critical feature. Service provider points of presence (POPs) are secure facilities built to withstand more than traditional office buildings. For this reason, servers in a POP have a higher chance of surviving a disaster and maintaining service than a PBX sitting in a business’s office complex. Even if a customer’s location is destroyed by a disaster, users will have phone service or the flexibility to obtain phone service. In practice this means that callers’ ability to access menus, voice mail, etc will be preserved, even if the organization’s on-site communications are completely severed.

Local Survivability via the PSTN

In the event of a local internet access line failure, options for emergency dialing from a local gateway are available with Hosted VoIP. This preserves an important safety element by allowing continued access to 911/emergency services via the PSTN, even if the internet access line used to connect to the Hosted VoIP service is temporarily unavailable.

Enhanced Productivity

Hosted VoIP enables many features, functionality and enhanced applications that are not possible with traditional solutions. Although financial savings and service reliability are critical considerations when moving to Hosted VoIP, these productivity-enhancing items are what organizations learn to leverage, appreciate, and eventually depend upon for daily operations.

Cohesive Services for Distributed Workforces

Hosted VoIP services break down the boundaries associated with traditional telephone service. Since traffic can be routed to any location connected to the network, functions that use to be tied to a particular location can now be moved anywhere or even distributed to multiple locations. For instance, a call center can be centrally managed while supporting geographically-dispersed agents and multiple locations. This allows call center agents to work from anywhere—even from home.

Similarly, a single voice mail system can serve a geographically dispersed group of users. This not only saves money by having just one voice mail system but also allows all users to access their voice mail from anywhere.
Likewise, functional groups can office in various locations and use extension dialing—saving the institution money previously spent on inter-office communications while still ensuring emergency and local dialing plans remain intact.

Support for Remote Users

More and more employees want the ability to work effectively from home or while traveling. At the same time, institutions gain from remote employees by reducing required real estate and increasing employee satisfaction.

Hosted VoIP enables remote users in a variety of ways:

  • Users with a home broadband connection can plug in their phone and access the same features available in the office.
  • Users who travel frequently can carry their desk phone with them and operate as if they were still in the office.
  • Users can access a web portal for their corporate directory, to view call logs, and to setup find me services.

These features provide the means for remote users to effectively work while at home or traveling.

Easy Rollout of New Features

As new features become available on a Hosted VoIP platform, the provider can automatically make them available to institutions and end-users. This is done without performing any truck rolls or installing additional equipment at the customer premises. By contrast, On-premises IP or Analog PBX solutions often require an expensive software upgrade by the customer to access the new feature. The customer must also implement the feature throughout the organization themselves or pay a third party for this service. Again, the burden is placed on the customer to perform these maintenance tasks.

Mobile Phone Integration and Desktop Applications

Even though enterprises are increasing the number of company-paid mobile and smart phones, few phone systems today allow integration with desktop and mobile productivity tools. Hosted VoIP applications allow employees with a browser-enabled smart-phone to access their end user portals. Employees are readily accessible to clients and co-workers and can enable/ disable call routing functions and features for their extension. Employees with traditional mobile phones can also use simultaneous ring services to send incoming calls to both their desk and mobile phones at the same time.

End User Productivity Features

Hosted VoIP technology offers end users and institutions significant new features that can greatly enhance their productivity and streamline business processes. Some enhanced features enabled by IP-based voice solutions include the following:

Unified messaging. Hosted VoIP allows users to have their voice mail messages sent to their email inbox.
This allows a user to listen and then file the voice mail or forward it to another user.

Find-me Follow-me. Users set up a profile of where they will be throughout the day, and their calls are automatically forward to the correct phone and location. This helps ensure that users never miss an important call.

Dial-In Conferencing. Users may be invited to join a dial-in conference line to increase productivity for a project. Some enterprises pay large monthly expenses to third party vendors for this feature, which is often included at no additional charge with Hosted VoIP.

Auto-attendant. An organization using a Hosted VoIP system can set up automated answering on any incoming number without purchasing any additional hardware. This feature can reduce the need for a human receptionist and enable the organization to provide after-hours service or information in an economical way.

Unified Communications (Email, E-Fax, EMS)

Hosted VoIP providers offer organizations the opportunity to unify their communication tools and mediums. For example, all system voice mail messages can be forwarded to one or more users via email. Additionally, E-Fax services can be integrated with the Hosted VoIP system, eliminating the need for analog, paper-based fax machines.

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