Craig Herrett, COO at VoIPon Solutions, has been discussing hosted telephony, price vs features, connectivity issues and more.

VoIPon are offering their own Hosted PBX, aimed at small to medium sized businesses.

What is the significance of price in this market or is more about flexibility and features?

“The price is certainly being driven down. The benefit within Hosted and Cloud based telephony is that you will pay for adding certain features to your system, as opposed to paying a higher cost outright if you purchase a more feature rich piece of hardware.

Small businesses in particular, who often do not have the knowledge to run their own communications platform, are often more price sensitive due to budgets. Then there are growing businesses who recognise that communication is a key ingredient into breaking that glass ceiling and supporting rapid growth. These types of companies would be willing to pay a little more for professional IVRs and call listening / whisper etc.

Business and customers will pay more if they see the benefits of the features. For example if they see that certain features would mean there would be less chance of missing a sales call, they would see the extra cost as paying for itself.

I would say there are definitely a few areas in the market that Hosted and Cloud based telephony solutions can satisfy.

  1. Small businesses with 1-3 seats looking for the cheapest alternative.
  2. Small to Medium businesses looking to grow rapidly and happy to invest.
  3. Larger businesses who understand the importance of communication and require certain features for compliance reasons.

Some companies have already taken their stance on these markets and have been advertising to small tradesman like businesses. There are a low number of seats per deployment, but there are a lot of these types of businesses. While they may be lower value per user, there can be an awful lot of these guys who just want a basic telephony service that is good value and just works. They do not need lots of bells and whistles for communication as they do not communicate with a huge amount of people and they just want something that works that they don’t have to do anything with. Then there are the other two types of businesses that will be willing to pay more for the features, or just their realisation that communication is such an important factor within a successful business.”

Has the connectivity issue disappeared?

“Absolutely not. It has reduced but you will notice with quite a few of the hosted providers, they are also offering the connectivity piece alongside their platform. Companies are probably more interested in the connectivity piece than just the Hosted and Cloud based telephony. One of my current customers was working with Virgin Media, and whilst looking at the offer he had been given, it was clear that Virgin Media were actually losing money on the Hosted and Cloud based telephony side, but they were more than making up for it with the connectivity side.

As a customer it is quite a nice proposition that a company will manage all of your communication needs, providing both your connectivity and your Hosted and Cloud based telephony. If something goes wrong you have one place to contact, rather than trying to understand who’s fault it is and where it went wrong. From the reseller again it’s great as you are always fully aware of what is happening on your network, meaning when a customer advises you of a problem it is very simple to diagnose as it is your network or your Hosted and Cloud based telephony solution that is the issue. You do not have to guess what is happening with someone else’s network.

Connectivity has improved as well, everyone is aware of having cables pulled up to the business premises however there are so many ways to get connected now which means it can be a very quick deployment should the reseller start to consider cellular, RF connectivity alongside good old fashioned cable.”

How practical is it for a reseller to partner with two or more providers? For example, Skype, Broadsoft and or Genband. (Just as IP PBX resellers used to have several systems in their portfolio)

“I think at this stage it is a little bit more difficult as the market is still maturing. Lots of products are trying to be all things to all people, and as such it is a little more difficult to find unique selling points between some providers. I have no doubt in the relatively near future this will change, and like we have seen with some of the Hosted and Cloud based telephony providers, they will clearly aim for a market, which will allow their solutions to fit alongside others who will be targeting a different sector.

I think a comparison, although weak at this stage, is the mobile phone shops. They carry many different networks and have a point of difference in pricing and coverage etc. When mobile phones first came out around 1985 (not that long ago!!) there were no resellers holding multiple different carriers, they all picked a side as there were no clear differences. However as time as progressed, it has become easy to find whether the coverage of a certain provider will be better suited to you than another. If you want or need 4G then you might side towards a certain provider, but if you just want value for money then you might look at a different provider. Time will tell but it feels very similar at the moment.”

Reseller Comment

“At VoIPon, we’ve been offering our own hosted platform for the past few months, aimed at consumers. We are finding it to be popular with SMBs, in particular because of the simple and inexpensive setup and ease of adding / managing users. Companies without a dedicated IT department don’t have the time to learn how to setup a PBX themselves. When you consider that the workplace is more mobile than ever, it makes sense to have it all done for you, and managed through a subscription service, accessible anywhere in the world.

With larger companies who need complete control over their phone system, we expect to see them continue to use on-premise equipment, through the likes of Sangoma FreePBX or Digium Switchvox. They might need specific features that don’t come as part of a hosted package, their system could be bespoke, or it just might not be cost effective for them to migrate to the cloud and completely change their system.”

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