How to buy a business phone system

www.unityconnected.com © Unity Connected Solutions

+ Applications,
features and
business needs<
25 Stations
+ Cloud based
Applications
+ Premise based
Applications
+ Key Applications
Explained
+ Connections and
Devices
+ Cloud Based
Connectivity
+ Cloud Connection
Considerations
+ Premise Based
Decisions – TDM
vs VoIP
+ Premise Based
Decisions - Lines
+ Pricing
Considerations
+ Cloud Pricing
+ Premise Pricing
+ Pricing
Comparison
Summary
+ Final Thoughts
TABLE OF CONTENTS
+ Cloud or Premise
+ Explaining Terms
+ Cloud Systems
High Level
+ Premise Based
Systems High
Level
Cloud or
Premise?
Applications Connections &
Devices
Comparing &
Summary
01 02 03 04INTRO
Pages 20-25Pages 14-19Pages 9-13Pages 5–8Page 3-4
+ High Level Process

DIFFICULT DECISIONS AHEAD
For most of us, major IT buying decisions
come along perhaps once or twice in a
lifetime. We may not have the practiced
skills in decision-making itself, and the
rate technology continues to change at
can make the task even more daunting
and confusing.
Telephone systems are no different. They
could, in fact, be more daunting as the
system being replaced likely ran for years
and years and no one has really had to
think about what all the changes might
mean. Until now!
It is more likely we have upgraded our
computers and changed our mobile
phones several times since the last time
we looked at our phone system. With new
terms like Cloud, SIP, PRI and VoIP to
contend with it may very well become
overwhelming.
Having a roadmap can
prevent us running into
roadblocks later…
But there is a logical approach to the
process. In walking you through that
approach, we will also educate you on the
key terms as you need to know about
them.
We start with determining the core
platform or model – Cloud or Premise –
and then walk through Applications,
Devices, Connectivity and Support.
We would love to get your feedback on
whether this helped or not at:
bmiller@unityconnected.com
www.unityconnected.com

4© Duarte, Inc. 2014
HIGH LEVEL PROCESS
Make sure the
TDM system can
support you for
at least 5 years
Premise
Business
Needs
Cloud
Or
Premise
TDM
Or
VoIP
Simple
Or
Advanced
PRI
Analog or
SIP lines
Check your Data
Network. It may
need to be
upgraded to
support VoIP
Worth checking
SIP Trunks out.
Could save you
30% to 60%
Check that a
VoIP system can
support Analog
trunks - cheaply
Most manufacturers
are not making TDM
only systems
anymore.
Under 8 to 12 lines,
analog may still make
sense. PRI better for
12 or more lines
Not all IP phones
are SIP. Not all
SIP are standard.
Cloud uses SIP
Digital sets will
be proprietary to
one vendor and
possibly one
system
Check if people
prefer a soft phone
for their PC or Smart
Phone. Could save $
IP
Digital or
Soft Phones
At least make
sure the phones
are compatible –
if you decide to
go advanced later
Make sure it isn’t
feature it is and
you are paying
for more than
you need
With a CAPEX
premise buy – you
tend to know your
costs. With OPEX be
careful not to go over
Make sure you take into
account things like door
phones and other
attachments you like or use –
ask if you can get with Cloud
Cloud often
includes LD
calling, saving
you more money
LinesCloud
Cloud simplifies the
line question, but
ensure you have
enough Internet
bandwidth & Speed
Check # line,s &
if LD is provided.
Mileage varies by
vendor.
Most will require
you buy your own
phones. The only
CAPEX part
Self install is not
always easy.
Check if vendor
will install &
support
SIP or
Soft Phones
SIP is the standard
for Cloud. But SIP is
not always standard.
So check carefully
Don’t assume Cloud is less
secure. Often Cloud Data
Centres are more secure than
your office, especially from
disasters.
Check payment terms.
Are you locked in for one
year, 3 years, etc
What install and service
options are available. OR is
it completely do it yourself?
Check Service Provider
ability to deliver any new
services on time
Take a look at leasing. Most
vendors offer attractive
lease rates to make a
CAPEX buy look like OPEX

Cloud or Premise?
01
+ Cloud or Premise
+ Explaining Terms
+ Cloud Systems High Level
+ Premise Based Systems High Level

CLOUD OR PREMISE?
Everyone is searching for new
ways to ‘consume’ technology
and many are familiar with
cloud apps already.
Cloud telephony is here now
and is a viable option for
consideration.
Cambells brought us the famous fork or
spoon commercial, to show off their new
chunky soups. The bottom line was that
you could use either a fork or a spoon
and the soup would taste just as good.
Similarly with telephone systems, you now
have two ways to ‘consume’ your
telephone needs – a Cloud based system
OR a Premises based system. Both will do
the same thing but one of them may better
suit your business.
It makes sense to start with the Cloud or
Premise question as it impacts all the
other decisions you will need to make.
Care must be taken not to jump to the
conclusion that one will be less expensive
than the other just because it is Cloud or
Premise. We will talk about comparing
price at the end, because it should be
about fitting your business first.
. We’ve actually been here before. Years
ago Carriers offered CENTREX, from
their Central Offices (Co). It provided
limited PBX functionality and could be
offered across cities. You paid monthly
with varying charges by type of phone,
how many buttons on the phone and
other features. Large Banks and
Government organizations used it as
they preferred the monthly fee model.
But PBXs offered more advanced
functionality, like powerful ACDs, Unified
Messaging and more and it became
difficult for Centrex to compete.
Cloud is the next generation Centrex, if
you like, offering the same benefits but
with more advanced capabilities.
Have we been here before?

EXPLAINING TERMS
With Cloud based Telephone Systems the
control equipment is located in a Data
Centre managed by the service provider
while telephone sets will be on your
premises.
The server controlling everything, the
applications and the carrier network
connections are all in your service
provider’s Data Centre or in the ‘Cloud’.
Any desk telephones and the data network
to support them are on your site.
Your Internet connection connects your
data network and desk telephones to the
Cloud Data Centre.
Someone else worries about the server,
updates, upgrades, maintenance, power
and security. Usually the things that take
the most effort to manage.
Traditional Telephone Systems have a
control unit or server that is located
somewhere on your premises. It might be
a closet, in an electrical or storage room or
in a proper computer room.
Your telephones may be directly wired
back to the control unit or are IP phones
on your data network and the server is
also on your data network, so it can
control them.
Finally, your telephone carrier will bring in
your network connections that will be
wired to the controller or server.
You manage it all, the server, cabling,
telephones, etc. Ensure updates happen,
upgrade items when needed. Pay the
carrier for your lines and LD. Yes, you can
have your reseller do these for you, but it
is all on your premises.
.
Cloud Premise
LAN
Desktop or LaptopIP Telephones Server
Control Unit
Or
ApplicationServer
Telco
Line
Or
Trunk
Connections
Traditional Telephone System
(Your Site)
Your Site
Internet
VS

PLATFORM COMPARISONS
Cloud is about flexibility more
than anything else.
And these capabilities show
that flexibility off best.
What other factors could impact your
decision? Being in the Cloud does offer
some other business advantages.
Multi-Site
Cloud isn’t necessarily site specific. So if
you have many sites, especially small
ones, Cloud can make them look like one
more easily. And it can do it nationally.
Scaling
What if you are growing fast? You may not
know what size system works best and
Premise systems often have size caps.
You don’t want to invest in a large size
cap system and incur the upfront cost until
you are sure. So a Cloud system can
scale up much better, matching cost to
growth.
Seasonal
There is never a perfect way to handle
seasonal requirements but Cloud may
work best. You will have to acquire your
Telephone sets up front but could
negotiate scaling up line costs for a
predetermined period.
No IT Department
Again, Cloud will not completely eliminate
this but it can dramatically reduce it. You
won’t have to deal with Carriers and their
bills, nor worry about updating your
telephone servers to keep them current.
But you will have to worry about your Data
Network but that is where choosing the
right Cloud provider can help.

Applications
02
+ Applications, features and business needs< 25 Stations
+ Cloud based Applications
+ Premise based Applications
+ Key Applications Explained

APPLICATIONS, FEATURES AND BUSINESS NEEDS
Cloud is not a ‘one-size-fits-all’
solution, the same as with
Premise based solutions.
So determining your business
needs first, may impact your
choice of solution – Cloud or
Premise.
Years ago we talked ‘features’ today we
talk ‘applications’ but fundamentally it is
about making sure that whatever you are
buying meets your business needs –
today and into the near future.
It is hard to project where technology is
going, when it changes so rapidly, so it is
sometimes better to think in terms of
where you want your business to be in 5
or 10 years time.
Why? Because some systems may have
size or application limits and you could be
forced into another change. Or the system
may have basic features and suddenly
you need more advanced features and,
again, have to change.
In the end, you are only looking at
capabilities because you have a business
need that is now unmet with the current
system.
Even with Cloud systems, there are
different options. This is because there is
always a cost to provide advanced
capabilities. Whether you are buying a
complete system for your premises or a
‘service’ from a cloud provider, someone
has to buy the hardware, the software and
any licensing costs that go with them.
So sellers make a decision to provide
different ‘flavours’ that match to different
business needs and price them
accordingly.
It could be pricing by shared or dedicated
lines depending on how much calling
volume you do or it could be by application
or could be basic and advanced
capabilities. Someone is trying to match
the costs to the capabilities to provide as
cost effective a solution as possible.
But it can complicate decision making.

CLOUD BASED APPLICATIONS
Because Cloud is essentially about
providing a service via the Internet to you,
you don’t have to worry about the size or
scale of the system.
One of the key benefits of Cloud is that it
can generally scale better and manage
multiple sites better, if that is something
you need to consider.
But they also tend to reduce the choice of
applications. Often bundling everything in
with whatever is being delivered to you,
whether you need them all or not.
But to manage pricing, they may have a
couple of solutions, for example a basic
solution that provides most of the common
telephone features as well as some basic
versions of advanced features.
They may not have a full blown Contact
Centre application but do provide a basic
Cloud simplifies concerns over scale and locations. But choices
will still be required for application availability
hunt group or basic ACD application. So
they will allow several phones to be put
into a group and a single incoming caller
will get the next person or next available
person. It may have limited statistics and
messages. It may not match caller to
agent best on their skills, for example, but
it will make it easier to have incoming
callers answered as fast as possible.
You first have to think about features or
applications that make it easier for your
customers to interact with you and then
about how you can help your staff interact
and collaborate with each other to be
more productive and efficient.
Cloud based systems can often support
mobile or Teleworkers much more easily
than premise based solutions. And some
newer Cloud systems are offering some
very advanced capabilities.
Common Apps
Hunt Groups (ACD)
Voice Mail
Unified Messaging
Conferencing (Bridge)
Find Me/Follow Me
Call Recording
Auto Attendant
Business Hour Rules
Paging
Music On Hold
Soft Phones

PREMISE BASED APPLICATIONS
Premise systems still offer
more capability and flexibility
when it comes to truly
advanced features…but it may
come at a cost.
Where Premise based solutions ruled,
even in the days of the original ‘Cloud’
service, Centrex, was that they offered
very advanced capabilities, especially
when it came to Contact Centre.
However, Premise Telephone systems or
PBXs, were also size ‘sensitive.’ To match
costs to customer size, manufacturers
created different platforms or control units.
The problem was if a customer outgrew its
current system, it may require a large and
costly change-out of hardware.
On the other hand, you may have a best-
of-breed approach and have already
acquired a number of applications that
integrate with your existing telephone
system.
For example, integrating email and chat
marketing into your traditional contact
centre to maximize agent time.
Generally speaking, advanced premise
based systems will offer the most
sophisticated applications with more
options and variations. Just be clear that
those are still your requirements today.
It may be possible to upgrade your
premise system from what you have today
to something newer. But you should verify
that the platform isn’t going to be replaced
with something newer in the near future
and what are your options to retain value
in existing licensing costs.
Some vendors have platforms that offer
exactly the same capabilities in Cloud or
Premise flavours. You can choose Cloud
to start and could go to a premise version
if you feel that suits you, without having to
relearn features or change telephones.

KEY APPLICATIONS
Over time, the applications have become more sophisticated.
Here we show you some key ones in order of sophistication
Unified messaging connects your voice mail to
your email system. Now you can receive your
voice messages as text file attachments to your
email. This means only one ‘inbox’ for all
communications and makes it even easier to listen,
transfer or even add to a message for instructions
to another person.
Unified Messaging
At a system level you should be able to create an
automated attendant so calls don’t need answering
by a live person. Advanced systems may offer
speech recognition.
Individuals should be able to create multiple
greetings for callers, receive notification of new
messages and access messages from desk
phones or when away. Advanced systems can
offer email notification.
Voice Messaging
Allows incoming calls to ‘hunt’ for the next
available person. Can select how to ‘hunt’, simply
go around the group, most idle person and so on.
My allow people to queue or wait.
Great where a business receives a lot of incoming
calls for sales ore services.
Hunt Groups
ACDs or Contact Centres increase sophistication,
providing more ways to match callers to agents, for
example by the skill level of the agent. Can provide
more ways to queue callers or offer callers choices
while queuing.
ACDs also offer greater reporting for managers to
determine how well they are running.
ACD / Contact Centre
Often related to ACDs is the ability to record calls.
It may even be a legal requirement if doing
outbound sales.
Allows someone to record calls for quality (manage
agents effectiveness) as well as to prove a
transaction or customer response.
Call Recording
Some businesses are reducing their office footprint
as many employees are mobile. Hot -desking
allows an employee to sit anywhere and dial in a
code and the phone on their desk is now their
phone.
The system knows how to route calls to them.
Hot Desking
If you have a lot of mobile employees then a ‘Find
Me/ Follow Me’ capability really helps. No longer
do employees need to remember to set their
phone to call forward, the system automatically
sends calls or twins calls with their mobile phone.
This can be turned on and off by time of day yet
any message goes to a single mailbox.
Find Me/Follow Me
If your employees have smart phones a lot of
systems now offer soft phones or telephone
applications that allow their smart phone to act as
if it is their desk phone.
Beyond forwarding calls they can do all the things
they can do from their desk phone.
Soft Phone Apps
Good
Better
Best

Connections &
Devices
03
+ Connections and Devices
+ Cloud Based Connectivity
+ Cloud Connection Considerations
+ Premise Based Decisions – TDM vs VoIP
+ Premise Based Decisions - Lines

CONNECTIONS & DEVICES
It’s all about Connectivity, so
making sure your system
provides you the right choice
of lines and devices is key…
But business has changed.
Mobility and Teleworking
support could impact your
phone support and choices.
The primary purpose of a communications
system is to connect people together.
Whether that be in real-time (talking to
someone) or one-way (voice-mail, email)
and so on, they are all ways we try and
connect with each other.
The major factors determining how we
communicate would be the urgency of the
communications , where we are located
and what devices we have available.
All of the ‘equipment’ are to support
connectivity and the devices we need. In
some cases it can all be done within the
communications platform and in some
cases it may require integration to another
system. For example, it is quite common
to have voice mails sent to you in an email
as an attachment today. The voice mail
system understands how to provide the
greeting, record the message and then
send via the email platform of choice.
The path to deciding is slightly different
between Cloud and Premise.
All of the carrier connections are made at
the Data Centre with Cloud. Cloud
providers will offer you some number of
simultaneous calls outside your
employees and an LD package. This will
be included in your monthly fee.
Premise systems require you to
coordinate your own carrier lines and LD
and pay separately.
Cloud generally only supports SIP phones.
And not all are standard. But will include
different choices. As well as Soft Phones.
Premise systems can support Analog,
Digital. IP, SIP phones & Soft Phones, but
often from one manufacturer.

CLOUD BASED CONNECTIVITY
The core of the Cloud solution is in the
Service Provider’s Data Centre, and that is
where all the Carrier connections are
made. So you don’t have to choose the
type of connectivity only how much you
will need.
Lines
Some Cloud providers offer you dedicated
or shared connections. If you have a
heavy volume of calls, you need dedicated
lines to ensure all calls get through. If you
are a low volume then you can save
money with a shared connection.
Long Distance (LD)
Similarly the Cloud provider will have
negotiated bulk LD rates for all its
customers. Some will provide an LD cost,
others include LD in the monthly fee.
Check how much LD is included.
Cloud simplifies concerns over scale and locations. But choices
will still be required for application availability
Telephones
Cloud based systems support SIP or Soft
Phones. SIP is supposed to be a Standard
but not all Cloud platforms support all SIP
phones. They will advertise which ones
they do support. Check if they will also
work on premise solutions in case you
decide to change later and want to re-use
your phones. You will have to buy your
telephones outright.
Soft Phones are applications run on
Laptops and Smart Phones. They vary in
functionality but offer a great choice if
working from home or on the road.
Laptops require a USB headset but plenty
are available. Smart phones just use the
standard phone headset or microphone
and speaker. It may require set up to work
and some may require Wi-Fi for full
functionality, so check with your provider
.
Unfortunately there is a lot of tech jargon
used in communications that can cause
confusion – and SIP is no different.
SIP was a standard developed to allow
IP type phones to be used on any
communications platform, the way we
could use touch tone phones on any
system.
Most manufacturers meet the basic SIP
standard for answering calls, etc, but the
more advanced features can still be
proprietary.
SIP is also the standard used to bring
lines or trunks into a PBX over an
Internet connection.
Just check that your SIP phones are
standard and can work on other systems
SIP – Session Initiation Protocol

CLOUD CONNECTIONS CONSIDERATIONS
At its most basic, this is a VoIP
solution.
So all the things you need to
do to support a traditional
system providing VoIP must
also be done with Cloud.
Self-install may not be so
simple, so check your options
in having someone help you
set up.
Even with Cloud there are some
considerations for your office or premises.
Cloud is brought into your office over your
Internet connection and then your data
network. So you will have to check both
are sufficient to support.
Internet or WAN
There are sites that let you run Internet
speed and bandwidth tests. They are not
perfect but will give you a sense of
whether it is sufficient to run the number of
calls over the network on top of whatever
else you use it for.
It is a VoIP connection and so your
telephone calls will be subject to the same
technical issues that affect any VoIP call
today, like Jitter, Delay, Packet Loss and
so on.
Data Network
After coming in over your Internet
connection the call will now run over your
data network to your SIP telephone. This
means that your Data Network needs to
be set up appropriately to support VoIP.
(This would be no different to putting an IP
telephone on a Premise based PBX.)
So ensuring you have a good quality date
network switch that supports the ability to
set up QoS (Quality of Service) where you
can prioritize the voice calls over other
data network traffic would be the bare
minimum requirement.
PoE (Power over Ethernet) would be
another advantage so that the phones are
powered from the switch rather than
having to buy separate power adaptors.

PREMISE BASED CONNECTIONS – TDM VS VOIP
Premise systems are all about choice.
You get to own your system and dictate
what is connected and how it is
connected. And control everything about
it. One of the key reasons people go this
route. So you have a few more choices to
make than with Cloud.
TDM vs VoIP
The traditional digital phones we use
today are based on a standard called TDM
(Time Division Multiplex). It works, is
directly connected to your control unit, so
you don’t need a data switch in between
or worry about other devices disrupting the
connection.
However the telephones are proprietary to
each manufacturer. Some of the traditional
manufacturers are still making TDM sets
but they are migrating to IP systems.
There are more decisions to make with a Premise solution
including Carrier Connectivity
This means that the new controller will
support the old hardware with the TMD
telephone sets now, but this will not
happen forever. And newer manufacturers
don’t offer TDM at all.
You may have to choose a VoIP system
VoIP or IP Telephones
IP Telephones connect to your controller
via your Data Network. They are just like
any other data device and send packets
over a shared data network.
Because it is shared, it is subject to things
like delay, jitter and packet loss and has to
be set up properly to work effectively.
Having a data network designed for VoIP
is critica.
Some IP telephones are based on SIP
and so will work on different
manufacturers systems, but not always.
.
TDM or Time Division Multiplexing has
been around for 30 years and is rock
solid. It used telephones directly
connected to the telephone system and
offers advanced features like call
displays, soft keys and more.
IP/SIP phones use a shared data network
and care is needed to set up that data
network properly. They can offer
advantages of software downloads, can
integrate to the web, although most
businesses don’t use these features.
For TDM you have to pay for a board that
supports 16, 24 or 32 telephones. For IP
you have to account for the cost of the
Data Network switch.
It may be swings and roundabouts but
they should be in your pricing decision
TDM or VoIP (IP)

PREMISE BASED CONNECTIONS – LINES
The biggest difference between Cloud and
Premise will be your line or trunk
connections to the outside world.
There are far more choices today than
ever before, and many different pricing
considerations.
Analog vs PRI vs SIP Trunks
Pricing forces a lot of small businesses to
continue with Analog trunks. They can
support Calling Line ID (CLID) where you
can see the number of the caller. You just
have to make sure your telephone system
is equipped with the hardware to support
CLID.
Once you get to about 12 lines, PRI or
Primary Rate, a digital line, starts to make
sense as the pricing starts to get cheaper
per line. It supports CLID and ANI and all
the other features you may need.
SIP Trunking is very new and used your
Internet connection. Some Premise
systems will directly support other require
a hardware device. Most will ask for this to
‘demarc’ from the Telco for testing.
DID – Direct Inward Dialling
DID is a feature that lets callers dial your
telephone extension directly – not via an
attendant – live or auto. The last few digits
of the number dialed is sent to your
system to ring your phone. You pay for
‘blocks’ of numbers, not just one number,
and is charged on top of your line charge.
800 Services
Finally, 800 services provide a single
inbound calling number free to customers
but charged to you. It can be brought in
over any type of connection but best over
PRI.
SIP has been explained earlier – as a
standard. But is also now used to provide
carrier connectivity as well – and is then
known as SIP Trunking.
The big advantage is in cost savings over
Analog or Digital Trunks. It can save
anywhere from 30% to 60% per month.
It uses your Internet connection, so that
connection may have to be increased and
tested for speed and bandwidth.
Many providers will require you use a
Session Border Controller - a device that
sits between your telephone system and
the Internet for testing in case of
problems.
You may also want to consider a security
service to protect your data network with
so much dependent on it.
SIP Trunks

Comparisons &
Summary
04
+ Pricing Considerations
+ Cloud Pricing
+ Premise Pricing
+ Pricing Comparison Summary
+ Final Thoughts

PRICING CONSIDERATIONS
Pricing needs to be done on an
apples-to-apples basis.
That way there are no hidden
surprises because it was
overlooked in the rush to buy
something ‘cheap’
At the beginning we said it was about
using your business needs to determine
the system requirements. Then using that
to help choose between a premise or
cloud system.
Then to think about pricing. Why?
Because most people jump to the
conclusion that Cloud will be less
expensive and start going down that path
without properly considering if it will meet
their business needs.
In some cases, Cloud may meet it much
better. For example, if you have many
small locations, Cloud can make them
look like one system much better. You
have a high percentage of workers form
home or on the road or you are growing
fast and don’t want to be locked into a
premise based platform that may have a
cap on how big it can grow.
Or Monthly payments may simply be
better than an upfront CAPEX cost.
But it is good business sense to ensure it
is an apples-to-apples comparison so that
there are no unknown or overlooked costs.
There are still some CAPEX costs with
Cloud, like paying for any desk telephones
and perhaps upgrading your data network.
For Premise, there is the CAPEX for the
initial system, telephones, etc, and the
monthly recurring costs for Carrier and LD.
As well as any maintenance fee.
Plus, you may amortize the cost over say
5 years to get an equivalent monthly cost,
but if you go beyond 5 years, additional
upgrade costs may come into play.
So there are several factors that can
impact how you compare price.

CLOUD PRICING
Opex Costs
The core Cloud service will be priced on a
monthly basis.
This can be based on the number of ‘lines’
you need – whether shared or dedicated.
Or it could be based on the number of
telephone users and perhaps even
additional breakdown by groups of
features being used.
Either way, there will be some factor(s)
used to determine the monthly cost.
Internet Costs
While the line costs you normally have to
worry about are handled by the Cloud
provider, you will have to work out if you
have sufficient Internet bandwidth. If not,
there will be an incremental monthly fee to
be considered.
There is more to pricing comparison than the monthly fee
versus CAPEX cost
Capex Costs
Most Cloud services expect you to pay for
any desk telephones. Even if you change
Cloud provider or go back to Premise, you
own the sets. As a rule of thumb,
telephone sets are about 30% of the total
cost of a system.
Data Network
You may have to upgrade your Data
Network to support the SIP telephones.
While it isn’t a cost of the telephone
system it is still part of the overall cost of
your new system.
.
OPEX vs CAPEX & Leases
Operational Expenditures or OPEX are
often preferred because the full cost can
be fully deducted in that year, whereas a
Capital Expenditure or CAPEX can only
have a portion written down in a year,
depending on what it is. Deducted
meaning subtracted from revenues when
calculating profit.
This may be attractive if it can directly
reduce tax payments in that year.
OPEX also allows businesses to match
their costs better to their income.
Finally, CAPEX can be turned into OPEX
by leasing the equipment. As you do not
own the Asset, the payments are tax
deductible and an Fair Market Value
(FMV) lease can provide even lower
monthly payment costs.

PREMISE PRICING
The bulk of the cost of a premise based
system will be a Capital Expenditure or
CAPEX. You will own all the equipment or
Assets. There will be controllers and other
hardware, perhaps racking, cabling (of
which some is an asset and some isn’t)
and finally the devices.
You will also have to manage the network
carrier and the monthly recurring network
costs.
This will be good or bad, depending on
what level of control you feel you need
over your business. Good if you want that
control, bad if you don’t want the hassle to
manage it all.
You may feel you need this approach for
the security of your system, although
when you look at your service provider’s
Data Centre, it will be hard to match it for
power, cooling and physical security.
You should ensure you have priced in any
costs required to get future software
upgrades. Otherwise your system will
slowly get dated. Many manufacturers
offer this option for an annual fee. It may
even be tied to your maintenance contract.
You will also have to include maintenance
costs, especially if leasing as the leasing
company will demand it.
You will have to determine the monthly
carrier line costs and LD costs. These will
not be included in the hardware price.
And if you are going VoIP for the
telephones, you should also consider the
cost of any networking upgrade to support
it.
There is actually a 3rd option – Hybrid.
By Hybrid we mean buying all the
equipment – just as if it was going on
your premises – but having a service
provider ‘host’ your control equipment off-
premise – in a high-availability Data
Centre.
The provider worries about the daily
management and care of your controller
– power, cooling – ensuring it is always
available – while you simply worry about
using it.
It can even be turned into an OPEX
expense if needed.
This often referred to as Private Cloud
and offers many of the advantages of
both models, with additional security.
Hybrid – the 3rd Option

PRICING COMPARISON SUMMARY
We covered a lot on the prior pages, so
here is a summary of all the possible cost
implications in selecting a new system.
Premise Pricing
Components
Total Equipment Costs
Software Maintenance fee
Installation
Cabling
Room Renovations (Rack?)3
Data Network
Integration Costs
Hardware Maintenance
Monthly Line/Trunk costs
Monthly LD costs
Cloud Pricing
Components
Per Line/Phone Monthly fee
Monthly Application fees?1
Telephone set costs
Installation (if needed)
Cabling
Data Network
LD Costs above package?2
Internet (Upgrade) monthly
1 May not be a separate fee
2 Does it included unlimited LD or is
there an overage cost?
•3 New equipment may only be rack
mounted and you may need to install
Monthly Fee
CAPEX
One-Time Cost
Annual Fee

FINAL THOUGHTS
A provider that offers both Cloud AND Premise
solutions can offer a more balanced view of
what is best for you.
The biggest decision of all may be the company selling you the
equipment or service.
Many Cloud providers sell it as a DIY project. You order the lines
and the telephones, the telephones are shipped to site, and then
you set it up yourself.
Many are based out of the USA. So there are no operations in
Canada. Could be a risk too far.
So perhaps look to a company that can offer you both choices,
Cloud or Premise, that can be on site to set up both for you and
operates a 24x7x365 help desk that is proficient in solving all the
business telephone problems you have and that can have a
technician in truck come to your site.
24 x 7 x 365 Network Operations Centre
Full remote support
Canada / USA 1-800 access with live answer
Full warranty on all equipment for any failure
resulting from normal failure
Warranty lasts as long as you have contract
Warranty includes Advanced Set Replacement
Web portal access for moves, adds, changes
Access to online user training at any time
On-Site support, if needed
Support Features
Your business communications solution is too vital to leave it to
a Service Provider that can’t come on site when needed

WANT EVEN MORE INFORMATION?
For more information, as well as detailed explanations
of the industry-specific language used, please visit our
website:
www.flexfone.net
If you are reconsidering your telephone system and
need some help understanding how to go about the
decision, we have a guide that can help you there:
Using Cloud to Simplify Your Move

How to buy a business phone system

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