Hullabaloo Over Hosted VoIP

Hosted VoIP has the ability to polarize a discussion almost as quick as politics and religion. A recent discussion at Channel Partners Network, the LinkedIn group hosted by PHONE+ and the Channel Partners Conference & Expo, bears this out.

The genesis of the discussion was a blog posted at Internet Telephony about the VoIP Surge Theory, which basically asserts that the recession has speed up VoIP adoption. Coincidentally, I just finished reporting on a similar topic for PHONE+. My article, “Hosted VoIP Sales Up In a Down Economy,” cites statistics that indeed first quarter sales of hosted VoIP have gone up. And, anecdotally, hosted VoIP service providers told me that they were experiencing unprecedented growth, which they attributed directly to the economy.

The discussion at LinkedIn, however, quickly reverted to the hosted versus premises VoIP debate irrespective of the state of the economy.

The opponents cited the classic argument of lack of control. Specifically, they said that hosted VoIP does not allow for customization or changes on the customer’s timetable, which could limit productivity. Costwise, they argued that the breakeven point on hosted versus premises-based solutions is around year four.

As in my article, proponents of hosted VoIP cited the advantages of outsourcing – constant updates, included maintenance, built-in disaster recovery, pay-as-you-go pricing, no need for IT staff, etc. Transforming a business from centralized to virtual operationally for both hard cost savings and productivity gains was another argument in favor of hosted.

I will add that in recent interviews with PBX manufacturers, many have mentioned they are exploring their own hosted offers. Samsung BCS and Avaya are two. Additionally, NEC just announced this month a hosted collaboration offer.

These decisions – probably hard-fought internally – would not be coming without significant pressure to do so from the channel or user community. Or it may be that they just see the writing on the wall.

As Jeff Ponts, EVP and founder of DataTel Solutions, wrote in his comments on Channel Partners Network: “I believe when SaaS and cloud computing gets to critical mass and widely accepted at the midmarket and SMB levels, physical PBX vendors of any size will be in trouble, and the majority of voice will be hosted VoIP.”

There is a lot of muscle – Google and Microsoft to name a few – behind this move to a cloud-based model. Once there, as Jeff says, voice will be just one application in the cloud.