In the converged world, it may make more sense to rent rather than buy.

This article will examine the key factors involved in the decision to migrate to IP telephony and compare their effects on hosted and premises-based solutions.

Some companies believe that purchasing a premises system provides more control than a hosted service. This is true, but along with control comes responsibility and cost. The real question is, “How much control is necessary, and how valuable is it?” This can only be determined by examining the specific elements of control, covered in the discussion below.

Implementation

Hosted services are less likely to have post-installation problems. Most hosted providers include the station review as part of their service and, therefore, station reviews are conducted by experienced personnel, which may not be the case if companies do it themselves. Between the time the station review is completed and the data entered into the system (2–3 weeks), changes take place, and that’s usually where trouble occurs. In hosted solutions, dial tone is unlimited, so there is no penalty for not planning growth, and changes can be made easily. Hosted providers also have application subject matter experts readily available at their centralized sites if there is a problem immediately following cutover.
Installation of telephony equipment in a hosted environment is less complicated, which should lead to better first-time accuracy. The process involves fewer steps; less equipment needs to be shipped to the customer site, new hardware does not need to be burned in, there is no need to assemble racks at the customer site, there is no installing and testing of software, etc. The hosted provider mainly needs to manage the station installation and cutover.
There is also less need for enterprise participation (such as station reviews, directories and detailed network planning). This means the process is less subject to “customer-not-ready” issues, and the hosted service provider can set an implementation schedule with a high degree of confidence.
Also, hosted solutions can be implemented on a line-by-line basis and can co-exist with the customer premises equipment (CPE) supporting other users. Customers don’t need to cut over completely to the new system at one point in time, as is generally the case with CPE solutions. Hosted services can run side by side with premises systems as needed to handle any issues. This reduces the criticality of having a totally clean cutover for every user on Day 1. Cutover can be department by department and is much more flexible at meeting user schedules.
Finally, hosted solutions’ implementation charges are much less than CPE system charges—but customers still need to compare costs on a multi-year total cost of ownership (TCO) basis to see if this is really a savings.