The Growing Scale of Cloud-based Phone Systems

By Brian Ferguson
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business communicationsFor the decade or so that Cloud-based or hosted phone systems have been available, they’ve been mostly known as a small business solution.  From inception of the hosted PBX, the networks that cloud-based phone systems were built on could not deliver the bandwidth or reliability needed to support companies with large call volume and strict service level requirements.  In addition, the cost of a hosted phone system didn’t usually scale favorably for larger companies. It has almost always been cheaper, in the long run, for larger businesses to buy a premises-based system upfront with CapEx dollars rather than subscribe to a monthly, hosted service.

Over the past couple of years the market has seen a shift. More medium-sized businesses and enterprise companies are moving their communications to the Cloud.  With the pricing models still not scaling well to larger organizations, how can that be?  Why the change?

The answer lies in a combination of the evolution of organizational priorities of larger businesses and the technological advancements in infrastructure and phone systems features.

IT Priority

IT organizations have evolved over the last several years from being comprised of system administrators to true revenue generators.  IT is no longer just the group that manages the technology infrastructure, sets up a computer for the new employee and updates everyone’s anti-virus software.  IT has expanded into playing a key role in helping generate revenue for the company by developing customer experience tools and portals, more impactful website experiences, integrations connecting key systems together, to name a few of those revenue-generating contributions.  With this change of focus, day-to-day system management needs to be offloaded and that’s where Cloud plays a key role.  Hosted phone systems require little or no maintenance making it the perfect option for larger businesses and enterprise companies that want to use their in-house technological expertise as a competitive advantage and money maker, instead of a sunk cost.

Network Advancements

When hosted phone systems were first available around 2003, the landscape of network infrastructure, speed, and reliability looked very different than it does today.  In fact, in 2003, 32.1% of employees had Internet connections of 56K or less. The lucky 67.9% of people that could get a broadband connection topped out at 1.5MB per/sec download speeds!  To put that into perspective, the average phone call uses roughly 100kb/sec of bandwidth, meaning that a company in 2003 could only take and receive a total of 15 calls at a time assuming that NOTHING ELSE WAS HAPPENING on the network.  That number may be sufficient for a very small business with very low call volumes, maybe like a small hardware store; but it’s not likely to be suitable for a large financial institution or a school, for example. (If you’re interested in more stats, like the ones I’ve mentioned in this article on how communications has changed through the years, check out this resource from NCTA.com

Of course, today is a much different story when it comes to bandwidth – with speeds of more than a Gigabit-per-second becoming commonplace.  Not to mention advancements in QoS (Quality of Service), network equipment and security.  The networks that are the backbone of today’s hosted phone system providers are more than capable of handling the volume and support demands of enterprise customers.

Feature Maturity

One of the major historical knocks against hosted systems has been the supposition of needing to sacrifice features to have a Cloud-based system.  Hosted systems were available with basic call functionality, but never had advanced features for call centers, mobile teams, or collaboration. And if they did, they were extremely expensive.  That has all changed, and Digium’s Switchvox Cloud is a great example of an advanced phone system in the Cloud.  When Switchvox Cloud was first released in 2013, it was one of the only hosted phone systems with the exact same feature set as its on-premises version, and that is still true today.  The market is beginning to see more and more Cloud-based call center solutions, but they are still very expensive.  These solutions are upwards of $99 per user per month, purely for the call center functionality.  That really makes Switchvox stand out as its robust call center features are 100% included in the price of Switchvox Cloud.

Cloud phone systems, like Switchvox Cloud, are no longer just small business solutions.  The strength of Cloud networks and the advanced features now available are supporting the desire of medium-sized business and the enterprise organization to use their IT group to generate revenue, not manage phone systems.

To experience Switchvox Cloud for yourself and see how it can solve the communication problems of all types of companies, sign up for our no-obligation weekly demo!

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About the Author

Brian Ferguson

Brian Ferguson is the Product Marketing Manager for Switchvox. Since becoming part of the Digium team in 2010, Brian has worked in multiple sales and marketing roles supporting Diguim’s reseller channel and helping SMB customers use Digium solutions to solve their business telephony challenges. With an additional 10 years of sales management experience in a retail environment, Brian has extensive experience working with a diverse range of technical products and brings a unique perspective in helping problem solve for customers. He graduated with honors with a BS in Business Management from the University of Alabama at Huntsville. He enjoys numerous, short walks on the beach (as opposed to long ones) and loves to travel.

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