Finding the Right Partner for Hosted VoIP

Finding the Right Partner for Hosted VoIP

There are three distinct decisions SMBs need to make when it comes to hosted VoIP, and I’ve covered two so far in this series.

 First is the decision to adopt VoIP, as the transition away from tried-and-true TDM can be a big one. Cost savings are usually the driver, but if your legacy phone system is still working well, you need to be confident that VoIP technology will do the job.

That confidence is discovered pretty early in the deployment phase, and once established, the next decision point comes with the cloud. The pros and cons of the cloud have been extensively covered in recent posts, and once you’ve decided that hosted is the right deployment model for your business, it’s time for the third decision point – who to partner with?

At face value this seems like an easy question, but with hosted VoIP, there are two pieces to the puzzle – IP phones and the VoIP service itself. Going to the cloud means moving away from the hardware associated with premise-based telephony, but you still need basic components, namely the phones and media gateways. Today, VoIP is as much as a service as a product, and with hosted, both are part of the investment.

This means the range of partners for hosted VoIP is quite broad – probably more than expected. To address that third decision and help you select the right partner, I’m going to examine the landscape over the next few posts. To begin, the balance of this post will briefly outline the five basic types of partners you could go with. In subsequent posts, I will review the pros and cons of each one to give you a better idea as to which partner type best matches up with your specific needs.

Partner #1 - Incumbents

These are the carriers you know best - Verizon, AT&T, CenturyLink – and they have long been the dominant providers for telephony. They also tend to be dominant broadband providers, making them ideal candidates to offer hosted VoIP. Prior to VoIP they were the only option for telephony, so the longer your company has been around, the longer the history with your incumbent. Of course, this cuts both ways in terms of your choice of partner. If it’s been good, you may well end up staying with them - otherwise, it’s time to move down this list.

Partner #2 – CLECs

This is the first wave of competition that came when AT&T was broken up back in 1984, and remains a strong force, especially among SMBs. Familiar players include Birch, Broadvox, Calltower and West IP, and many of you have been with a CLEC for a long time. As such, you’ll have a history with them for VoIP, making the transition to their hosted offering easy. That presumes, however, that the history here has been good – but also, you need to determine their cloud capabilities. Most CLECs are small and may not be able to compete with larger players on this front.

Partner #3 - OTTs

Over-the-top players are completely a product of the cloud, as they have little or no network infrastructure. Their business model is based on being a low cost provider, riding over the public Internet, serving customers in any geography. All have started from scratch, but the economics have allowed them to rapidly build up a customer base, usually at the expense of incumbents. The best-known would be Vonage, 8x8, RingCentral, and Phone.com. As a category, OTTs need deeper research as there are a few variations to consider, but all offer hosted VoIP that is well-suited for SMBs.

Partner #4 – Cablecos

Being a Greenfield opportunity, the business market has always been attractive to cable operators, and VoIP is the perfect entrée, especially for SMBs. Cablecos have become very successful with residential VoIP, and are also strong players with SMBs. The majors dominate - Comcast, Charter, Cox, TWC – but there are hundreds of regional cablecos that can be a great fit for SMBs. Like incumbents, the larger cablecos can leverage the cloud to provide business-grade quality over their network at a competitive price point.

Partner #5 - Telecom vendors

This category is presented last to show how much telephony is being impacted by the cloud. When business telephony was almost all premise-based, the telecom vendors were totally dominant. The majority of phone systems were either Avaya or Nortel, and later, Cisco. Filtering down to the SMB market, vendors like Mitel, ShoreTel and NEC have long been key players.  All these vendors are migrating telephony to the cloud, but as VoIP becomes increasingly Web-based, they are losing market power to the other categories in this post. They are still bona fide choices for hosted VoIP, but are hardly the only game in town.