The Small Business Phone System: Options Abound

Despite the proliferation of hosted phone services and their supposed appeal to small businesses, many SMBs continue to prefer on-premise solutions from traditional PBX makers. But that may be changing.

"My colleague Alaa Saayed has released a great market insight on the SMB market for premises-based IP telephony platforms. Interestingly, despite the hype around cloud computing--the oft-repeated belief that it is perhaps most appealing to the SMB market--premises-based systems actually represent the most popular method of delivering voice communications to SMBs.

Indeed, our research shows that the growth potential of the hosted market over the next five to six years is still low when compared to premises-based IP telephony solutions. Most SMBs want local control and prefer the one-time cost of a premises-based system, since the monthly charges associated with hosted services can be high. This is particularly true in the 50-to-100 extensions segment. While hosted telephony services have improved considerably in terms of voice quality and uptime, an on-site system is often less costly to maintain over a longer period of time and can exceed hosted services' uptime rates."