Why bother offering hosted PBX?
Traditional PBXs work well, businesses are used to them, and service providers can make good money on the equipment sale. So why change?
In this short article we’ll look at 8 reasons that more and more service providers are switching to focus on the hosted model.
1. PBXs are expensive
On the plus side, this means that you can collect a good commission or mark-up on the initial sale, but it also means that the sales process is slow and many smaller businesses are going to be reluctant to sink that much capital into a phone system.
2. PBXs really need an administrator
A PBX is a fairly complicated server, running at the customer premise. If they have an IT department, then this fits nicely within their skill set, but smaller companies that don’t have an IT department find it hard to make changes to the PBX configuration. Owning a PBX requires a skill-set they don’t have, and so the business would much prefer to outsource “running the phone system” to the experts. (That’s you.)
3. It’s easy to roll-out new features with hosted PBX
As you grow your network and invest in new functionality (e.g. instant messaging through AMS, or Accession Meeting) you can roll-out these new features to your existing subscribers with a couple of clicks of your mouse – making it very easy to up-sell new products to your subscriber base. This allows you to easily grow revenue, and means your customers continually have access to the latest technology.
4. Workers are becoming more mobile
These days it’s very common to hear of people working from home one day a week, or for companies to hire people who always work remotely. With hosted PBX and Accession clients these remote workers can have a phone line as part of the same business group as everyone else, with all the same features they’d have if they were sitting at a desk in the main office. With an on-prem PBX… not so easy.
5. Hosted PBX supports multi-location businesses better
Along the same lines, if a business has multiple locations – or perhaps one main office and a couple of satellite offices – this can easily be handled with hosted PBX. Regardless of the phone line’s location we can share presence information (line state monitoring), park orbits and hunt groups across sites just as easily as if everyone was in one location.
6. Better handling of outages
With a traditional PBX, if there was a problem with the PRI you were in big trouble. Perhaps it would be possible to contact the phone company and ask for the main number to be forwarded somewhere, but beyond that the business couldn’t do much.
However, with a hosted PBX, users may have an Accession Mobile client on their cell phones, or they can use the CommPortal web interface to make changes to how incoming calls are handled – and of course any IVRs are hosted in the cloud, so are unaffected by the outage.
Personally, I’d rather avoid the outage in the first place, but if it happens, it’s better to be able to do something about it.
7. Service providers (eventually) make more money
With the traditional model, a business was spending a big chunk of capital on a PBX up-front, and then paid the service provider a fairly small monthly fee for a PRI to the PBX. But with hosted PBX you don’t have to split the income with the PBX vendor. There are still phone handsets that need to be purchased (true in both cases), but beyond that all the revenue comes to you, and your monthly fees will be much higher that what you earned before.
8. A hosted PBX is great for SMBs with 5-20 lines
This is really a consequence of reasons 1 and 2, but the market for traditional PBXs was restricted to fairly large businesses, but there’s a huge untapped market of smaller businesses, with maybe 5-20 lines that are very open to a hosted phone system. They’re much more able and willing to pay a monthly fee per-line than they were willing to spend thousands of dollars on a local PBX that they’d need to manage themselves.
So it’s not surprising that most of the growth in hosted PBX has come from this segment of the market – and now as the technology is becoming more proven it’s increasingly moving upstream to larger businesses.
There’s a reason that many traditional PBX companies are struggling and UCaaS is one of the fastest growing areas of the telecoms industry. I won’t try to tell you that it’s easy to make the transition – it requires a significant mindset shift throughout your company, and significant technical investment to prepare to offer the service – but in the long term the rewards are definitely worth it.