The “Financial Sense” of Cloud Phone Systems

In our last article, we discussed thebusiness sense of a cloud phone system. We talked through the business advantages and disadvantages of a hosted phone system, as well as, the different scenarios that will help you determine whether or not a hosted phone system is the right decision for you.

In this article, we want to touch on the “financial sense” of a cloud-based phone system. How you approach your finances will determine which route is best for you. For example, if you are looking for an option with a flat rate monthly expense versus an upfront capital cost, then the cloud may be a better option for you.

Depending on who you ask, some will say that a hosted system is cheaper than an on-premise system. We would suggest that asking which solution is cheaper is not the right question to ask, but rather which one makes more financial sense for your business model?

Financial Advantage of Hosted Phone Systems

  1. Software & Maintenance Convenience
    When it comes to software upgrades and maintenance on a cloud-based phone system, everything is built into the cost of the monthly payment, therefore you have less hassle with additional bills that show up.
  2. Flat Monthly Expense
    With a flat rate fee, you can easily build in a monthly expense into your budget and know that every month your payment will be the same, pending on whether or not you add additional licenses.
  3. Unlimited Long-distance
    Typically, on a full cloud phone system, Long distance is built into the price. This is not always the case, but more often than not long distance is part of the monthly payment.

Financial Disadvantages of a Hosted Phone Systems

  1. Cost of Ownership
    There is no upfront capital cost for a pure hosted phone solution. However, over time, whether it be 3, 5, or even 10 years down the road, the total cost of owning the hosted phone system is exponentially more than an on-premise solution.
  1. Telecom taxes, fees & surcharges
    With a cloud solution, the total bill is subject to a 30-35% telecom tax, fee, and surcharge. What should be a $600 bill is now going to be $850, whereas in other models only the dial-tone is hit with taxes and fees.

Conclusion

What makes the most Financial sense for your company is that your phone system will be financially aligned with the rest of your business in the coming years. If a flat rate monthly expense versus an upfront capital cost is more comparable to how you do business, then a cloud phone system is a viable option. If you want to consult with one of our trusted advisors to help you make the best decision on your business connectivity needs, let’s start a conversation today.

 

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