Hosted VoIP's Recent History

Getting from there to here has been quite the adventure in technology adoption. It was ten years ago when Sylantro, a small developer of soft-switch technology, launched their first commercial deployment with start-up service provider GoBeam Communications in Sunnyvale, CA. Sylantro and GoBeam shared a big idea; to alleviate the need for a SMB customer to ever buy a PBX again. How? By moving the “switching intelligence” that would normally reside in a premise-based phone system, into the cloud, and leveraging the ubiquity of IP networks for transport, and IP handsets at the edge. The idea had tremendous promise, but also had predictable challenges that slowed adoption.

Early Challenges of Hosted VoIP
Software immaturity resulted in service reliability issues.  I’ve always said that dial-tone is a human right in this country.  Slow down someone’s Internet, drop a call on a cell phone, have a computer crash…most people will tolerate technology failures from time to time.  However, take away basic dial-tone and they will storm your castle with pitch forks and torches blazing.  As with any software development effort, there were bugs that needed time to be worked out.  Unfortunately, early on, Hosted VoIP gained a reputation of cheap & unreliable.  That stigma remains today and often times stalls a company from deploying a Hosted VoIP solution.

Early Service Providers were venture-backed and bleeding cash.  As with all new technologies, the trail-blazers were small, nimble, venture-backed companies with big ideas.  Many businesses were understandably hesitant in trusting their mission-critical voice services to start-ups with questionable staying power.

Hosted VoIP pricing models didn’t pencil for certain verticals and mid-sized businesses.  With monthly per-seat pricing hovering somewhere above $50, only small businesses under 30 users would typically see a cost benefit for moving to Hosted VoIP.  However, any business with lots of phone and very little usage per phone, found costs go way up.  And if your calling patterns were all local, i.e., car dealerships, local retail, churches, then there wasn’t enough savings to justify the investment.

But as with any great idea, after time, with enough mistakes and tough lessons, the industry evolved and began to seriously address these early challenges.  The Hosted VoIP industry today is far smarter and has adjusted to the varied needs of businesses of all sizes.  Today, small businesses to large distributed enterprises are enjoying the economic benefits of moving to cloud-based solutions.

Total Cost of Ownership (TCO) savings aside, which can be significant, there are fundamental advantages to the cloud.  These advantages are so compelling, a legitimate argument could be made that premise-based solutions will soon go the way of the dodo.  Here are the most obvious benefits.

• Disaster Recovery – Moving the core system intelligence to the cloud results in huge improvements in Disaster Recovery.  Regardless of how advanced your premise-based technology may be, if you lose connectivity to that site, you lose communication with the world.  With a properly designed cloud communication platform, your callers can always reach you.  Calls can be rerouted instantly around outages, voicemail & call center applications can always be reached, and your business can continue to function.  Designing an equivalent level of DR into a premise-based system is cost-prohibitive and impractical.
• Scaleability – If there is one thing business owners can predict over the next few years, it is that their businesses will be unpredictable.  In order to responsibly invest in a premise-based system, you have to be a pretty good profit today.  How big or small will you be in 6 months or 18 months or 5 years?  How will your application needs evolve?  Hosted solutions allow you to only pay for what you use and to increase or decrease your costs as your business needs change.  I like to say that Hosted VoIP is breathable, which is a far better alternative to suffocating under the weight of bad, premise-based decision.
• Manageability & Control – Perhaps one of the most common objections to moving to the cloud is a perception that one will lose control over their environment.  I need to be able touch it, make changes to it…I can’t trust a 3rd party to do that for me.  Ironically, these same customers pay exorbitant contracts to 3rd parties to maintain and upgrade their systems.  Cloud-based solutions actually provide more control, manageability and visibility to IT managers and business owners that can ever be provided by premise-based alternatives.  One IT manager said it perfectly to me when he described his Hosted VoIP platform as the perfect attainment of his lifelong goal….”Cabana Management”.  “With an internet-connected laptop, I can now manage my entire telephony infrastructure from the comfort of a cabana on the beach.”

There are countless other advantages to move to a cloud solution.  Lower CAPEX, lower OPEX, protection from technology obsolescence, ease of deployment, flexibility for mobile workers, just to name a few.  But with as many compelling advantages, there are as many different cloud solution providers.  How does one choose?  Who is the best fit for your business?

Terrapin Solutions focuses on solving exactly this problem.  Terrapin Solutions brings to the table, what we consider to be, the best cloud solution providers in the industry.  Not every provider is a perfect fit for every customer.  We ask lots of questions and analyze lots of data before settling on what we know to be the best solution fit for your unique needs.

We’ve been “playing in the clouds” for the past 10 years. Give us a call and let us help you clear up any confusion.  Moving to the cloud can be daunting, but can also be a game-changer for your business.