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Total Cost of Ownership Comparison
                                                                    Premised Based IP-P...
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Premise Based PBX Versus Hosted VoIP Comparison

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Generic and Simple Cost Comparison of Premise Based PBX's versus Hosted VoIP Phone Systems

Published in: Technology
  • This comparison is a freaking joke. You can get a PRI span for about $400 a month, not $1,200 as shown in the slide. Also the hosted solutions show no ISP cost. Good luck running those phones on a basic DSL package. Where did you pull that $1,000 a set number from? A decent digital/VoIP phone will cost you $500 for the top of the line model and closer to $250~$300 for a phone for the average user. I sure hope no small business owner is making a decision based on this info.
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Premise Based PBX Versus Hosted VoIP Comparison

  1. 1. Total Cost of Ownership Comparison Premised Based IP-PBX vs. Hosted VoIP Phone Systems Note: This is the analysis of an ACTUAL 4-location customer who we installed a traditional premise-based IP-PBX for a few years back. At that time, they realized a savings of approximately $2,000 per month simply by removing the long distance costs of branch-to-branch dialing and the ability for hop-off calling. It is interesting to see how this comparison shows how much more could be saved today by migrating to a hosted VoIP platform, not to mention the enhanced feature set and centralized administration. While price alone should never be the determining factor for implementing any technology, the savings and lower TCO of this model are certainly significant. Pricing below is generally accepted industry averages and not for any particular manufacturer or hosted VoIP platform. Traditional PBX or IP-PBX Hosted VoIP Phone System Hosted VoIP Phone System Premised Based Phone System Phones Bundled/Leased in Package Phones Purchased by Customer Capital Costs: Capital Costs: Capital Costs: 75 Extensions @ $1,000/ea $75,000 None/Minimal -0- 75 Phones @ $300/ea $22,500 (PBX Average is $800 - $1,200/seat) (Industry Average for VoIP Phones) TOTAL UP-FRONT CAPITAL: $75,000 TOTAL UP-FRONT CAPITAL: $0 TOTAL UP-FRONT CAPITAL: $22,500 Operating Expenses: Operating Expenses: Operating Expenses: Monthly Depreciation on Phone System $1,250 75 Hosted VoIP Extensions x $40/mo $3,000 75 Hosted VoIP Extensions x $25/mo $1,875 (60 Month Amortization) (Average Hosted VoIP Seat Cost) (Average Hosted VoIP Seat Cost) Finance/Lease/Cost of Capital (System) $750 Finance/Lease/Cost of Capital (Phones) -0- Finance/Lease/Cost of Capital (Phones) $225 (Interest = 12% APR) (Interest = 12% APR) Support/Warranty/Software Upgrades $1,000 Support/Warranty/Software Upgrades Included Support/Warranty/Software Upgrades Included (Industry Average is 16% per year) Moves, Adds & Changes (MAC's) Varies Moves, Adds & Changes (MAC's) Varies Moves, Adds & Changes (MAC's) Varies (Professional Services/On-Site Calls) (Professional Services/On-Site Calls) (Professional Services/On-Site Calls) Local Phone Lines (POTS, PRI & DID's) $1,200 Local Phone Lines (POTS, PRI & DID's) Included Local Phone Lines (POTS, PRI & DID's) Included Long Distance Usage $400 Long Distance Usage Included Long Distance Usage Included TOTAL MONTHLY: $4,600 TOTAL MONTHLY: $3,000 TOTAL MONTHLY: $2,100 TOTAL COST OF OWNERSHIP (TCO): $276,000 TOTAL COST OF OWNERSHIP (TCO): $180,000 TOTAL COST OF OWNERSHIP (TCO): $148,500 (60 Month Ownership Amortization) (60 Month Ownership Amortization) (60 Month Ownership Amortization) % Difference (Savings): - % Difference (Savings): 35% % Difference (Savings): 46% © 2010 by PCG Consulting Group, Inc. - Not to be reproduced without express written permission. - www.pcgtelecom.com - Updated: 3/25/2010

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