How To: Buy a Hosted PBX Phone System - Page 2

By Gerry Blackwell
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Making the Connection

Some providers can and will support customers either over standard cable or DSL high-speed Internet connections or over dedicated T-1 lines. Others, mainly the bigger companies, will not support customers over Internet connections.

This is important because T-1 lines are expensive, about $500 a month and sometimes as much as $600 to $700. Very small companies or those with small call volumes may not be able to justify that expense, especially if they already have an under-utilized high-speed Internet connection that could be used for voice.

Service providers that don’t allow customers to connect over the Internet argue, rightly, that they cannot guarantee call or connection quality when calls travel over the public Internet. Over a dedicated connection, congestion on the Internet can’t interfere with optimal transmission of voice.

A dedicated connection also reduces the chances that hackers could mount denial of service attacks against your phone system, or hack in and use your system to make long distance calls, Cole said. Some service providers – again, typically the larger, better established players – also won’t provide support to customers if they’re connecting remotely over the Internet.

Connecting remotely – which as we saw, is one of the key benefits of hosted solutions – will always work, Cole stressed. “But if you’re having issues, these companies just won’t provide you with technical support.”

If you need to be able to connect to the phone system over the Net, either from your own facility to save money or when working remotely, find a provider willing to fully support that arrangement. It will probably be one of the smaller operators.

Size is Important

The size and scope of the provider’s operations is an important differentiator for other reasons as well. Smaller operators are generally apt to be more flexible in how much they’re willing to customize the service for clients, Cole said. Bigger companies typically don’t like to deal with exceptions.

If your company is small and local, a small, local provider that offers more personalized and customized service might be a good bet. On the other hand, if you have offices around the country or region, you should probably choose a larger, broader-based provider that can deliver optimal service everywhere, Cole said.

For one thing, smaller, geographically limited operators may not be able to give you telephone numbers with the area codes and exchanges you want in markets where they don’t have a presence. This can be important if your branches in those places are local in focus and you want them to appear local.

Pricing Formulas

How the provider prices the hosted service is another key differentiator. A very few providers – Primus Telecommunications Inc. is one – bundle service and IP phone sets for one monthly, per-seat price. Prices from those vendors are generally at the high end of the range, but they save you having to buy phones at a cost of from $40 to $200 each.

All providers offer free unlimited local calling. And most provide free “on-net” calling – you don’t pay for calls to your other offices on the provider’s network or, in most cases, to the provider’s other customers.

Some also bundle in a long distance package with a certain number of free minutes per month. This is obviously desirable if long distance calling is a big part of your traffic, but you need to carefully compare long distance packages and rates.

Some providers also base pricing on the length of the contract – the longer you commit to using their service, the lower the price. Choosing a long-term contract may seem like a good idea, but not if it locks you in to an unsatisfactory service.

Due Diligence

Outsourcing any vital business service ultimately comes down to establishing a trust relationship, which is why many small businesses find it easier and more reassuring to choose a larger, well-established provider, and consultants often recommend it.

But there are other ways to establish a comfort level with a prospective outsourcer. One big concern with hosted PBX services is reliability. Can you count on the provider’s system always being available?

If the company’s data center goes down, or its connection to the Internet backbone or its connection to your office fails, you lose phone service. Ask what kind of redundancy the provider has in place – backup servers that automatically take over if one fails, alternative network routes. And ask for references.

“When you’re looking at [hosted PBX] providers, especially less recognizable names, doing the due diligence and getting references is vital,” said consultant Jayanth Angl, a senior research analyst at Info-Tech Research Group. “In such a competitive market, they should be able to provide references.”

Contact the references, Cole said, and ask them about call quality, the provider’s up time record – how often, if at all, the system was unavailable – and the company’s responsiveness to trouble calls.

You really want local references because the provider’s service may be different in different markets depending on the quality of its network and infrastructure in each area.

If a company can’t provide local references but you still think it’s the best provider, insist that a bail-out clause be written into the contract that allows you to discontinue the service after 30 or 60 days if you’re not satisfied with service.

Any contract for hosted PBX service should also include a service level agreement (SLA), a kind of guarantee that the service will always be up and running. It should include financial penalties against the provider if the number of minutes of reported outage reaches a certain threshold. This provides a keen incentive for providers to ensure their systems are bullet proof.

Cole cautioned, however, that there are ways service providers can weasel out of penalty clauses, including blaming the larger network providers from which they buy capacity.

Also, no hosted PBX provider will guarantee call quality, and those are the problems customers are most likely to experience – echo on calls, cellular-like drop-outs and noise. Not as damaging as complete outages, but unwanted nevertheless.

This is not to say that hosted PBX services are some kind of wild west show, Cole said. Most are very reliable and call quality problems are rare. You just need to make sure you pick a good provider, and one that’s right for your needs. It’s not rocket science, just a question of doing your homework and asking the right questions.

Based in London, Canada, Gerry Blackwell has been writing about information technology and telecommunications for a variety of print and online publications since the 1980s.

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This article was originally published on October 22, 2008
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