Hosted PBX introduction

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Hosted PBX introduction

Hosted PBX Systems Buyer's Guide Updated: September 2010

Looking to buy a new phone system or replace your outdated business phone system? Don't overlook the potential of hosted PBX services as a reasonable phone system alternative. For small, fast-growing, and/or highly-distributed businesses, hosted PBX services can in fact be the most cost-effective way to get a full suite of modern phone system features.

Table of Contents • Hosted PBX introduction

With a hosted PBX service, there is no need for the typical customer premise equipment (CPE) – dedicated telephone hardware that sits in your office – needed with traditional PBX systems. Instead, your incoming calls are routed to

telephone hardware at the provider's data centre. When the system determines where to transfer the call, it swiftly forwards the call to the appropriate extension at your office.

Hosted PBX services can go by many names. Some providers refer to their products as application service provider (ASP) or software as a service

(SaaS) solutions, while others use the term virtual PBX. The main idea is the

same: the software and the hardware are run in the provider's data centre and deliver their functionality through the Internet.

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Learn about hosted phone services

Hosted PBX Systems Buyer's Guide

Updated: September 2010

The traditional hardware-based PBX used to be the only real choice for full-featured phone service. Now, there are several configurations to choose from, including hosted phone services:

Table of Contents • About hosted phone services

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Traditional PBX systems use dedicated telephone

hardware located at your business to provide business phone features and call routing

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A software PBX works like a standard premise-based PBX, except it runs on a computer server, instead of dedicated telephone hardware

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A VoIP PBX is also a premise-based system. It uses VoIP (voice over Internet Protocol) to connect all the phones in the office, but still needs specific telephone hardware to connect to the external telephone network

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Hosted PBX services process calls and provide business

phone features via central data centres, and deliver calls to your office(s) using VoIP

Hosted PBX systems can be considered the descendants of the popular Centrex systems of years past. While Centrex lines are still used in many business settings, hardly any companies use the actual Centrex functionality, since modern PBX systems provide more features at a lower total cost.

How it works

The primary difference between a traditional phone system and a hosted phone service is that the bulk of the call handling is done at the vendor's data centre, not a telephone closet in your office. When a caller dials your number, it rings through to the data centre first.

There, the auto-attendant answers the incoming call with a custom message you record. Callers can leave messages, dial extensions directly, choose a name from a directory, or pick from a menu of departments and recorded messages. All of this is handled at the data centre: the call doesn’t reach your office until the call is routed to a live person.

Calls are sent from the data centre to their destination using VoIP technology. VoIP converts the audio to data packets and back, allowing the call to be

delivered over a broadband Internet connection instead of a dedicated telephone line.

Requirements

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Benefits of hosted PBX services

Many different types of companies will find hosted PBX service a compelling call handling choice. In particular, hosted PBX services offer huge advantages for

companies with offices in multiple locations:

Table of Contents • Benefits of hosted PBX services

• All employees can access the full features of the phone system from any location: satellite offices and home workers with broadband connections are just as connected as the main office

• Hosted PBX services slash support costs, as there are few differences in set-up and administration for any user, no matter what their physical location

• Costs for interoffice calls decrease dramatically, as VoIP enables no-cost or low-cost calling between extensions A related benefit is improved support for travelling employees. Salespeople who are on the go have the option of using their laptop and a headset as a "soft phone:" by connecting to a hotel network, they place and receive calls exactly as if they were in the office. Many hosted PBX systems also offer support for cell phones, creating yet another option for employees on the go.

The improved ease of management offered by hosted PBX is an important benefit for many companies. Instead of requiring costly technician visits for every MAC (Move, Add, Change), hosted systems can be easily configured on the fly: web-based control panels let you manage call options, voice mail settings, the auto-attendant, and much more, helping you save money and time as you adjust to changing situations.

Hosted PBX systems offer outstanding reliability, typically in the "five nines:" 99.999% availability. This is due to the carrier-class equipment they operate and heavily redundant systems, including backup power systems and multiple

servers.

Financial savings

Many companies find that hosted PBX systems offer a lower total cost of ownership than traditional phone systems. The most obvious reason is that a hosted service doesn't require the initial investment of tens of thousands of dollars – but there are other

contributing factors as well.

You're also reducing the risk of getting stuck with obsolete phone system equipment. Instead of having to update your phone hardware every few years to take advantage of new technologies, you'll be passing that responsibility on to the service provider.

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Drawbacks of hosted phone systems

While the benefits of hosted PBX services are substantial, they have some drawbacks, as well. Here are some considerations you should look into before deciding if hosted phone systems are right for you.

Table of Contents • Drawbacks of hosted phone systems

Internet connection

One potentially significant problem with hosted phone systems is that they are completely dependent on your data connection. If your Internet service goes down for any reason, you'll also lose your ability to make phone calls.

That's true for all types of VoIP service. However, unlike with site-based VoIP PBX, a hosted PBX service will still be able to answer your calls, even if your connection is down. Because the initial greeting, menus, and voice-mail are all run at the provider's data centre, they'll all continue to function normally, even if your office is offline.

A hosted phone system also lets you react quickly when problems do occur. If your connection is going to be down for a significant length of time, you can reconfigure the system to send calls to other locations that are still online, such as cell phones, home offices, or satellite offices.

Bandwidth

Just being online isn't enough to guarantee good results from hosted phone systems: the quality and speed of your Internet service is another important factor. Most providers will require a DSL or T1 connection to work properly. Even though cable modems can provide faster speeds than DSL in some

circumstances, they're not suited to support VoIP.

You can test the speed of your Internet connection using this free online tool. While it's not a guarantee, it will give you sense of how well your connection will support VoIP. The providers you speak with should be able to evaluate your current bandwidth situation and your calling volumes to determine if you need to upgrade your connection.

Robust call centre features

Most hosted PBX services are not appropriate for large call centres. Advanced calling features like automatic call distribution and detailed reporting are essential for call centre applications and commonly available from hosted PBX services. However, they generally aren't as robust as they would be in a dedicated call centre solution: while adequate for 5 to 10 agents, they may not have the capacity to handle larger call centres.

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Hosted IP PBX features

Typical business phone features are standard with any hosted IP PBX. You can expect all of these features and more:

Table of Contents • Hosted IP PBX features • Call waiting • Call forwarding • Call transfers • Caller ID • Redial • User directories • Activity reporting • Three-way calling • Hunt groups • Voice mail • Extension dialling • Call accept/reject • Follow-me ringing • Music/messages on hold

Beyond these standards, there are many other features commonly included in hosted PBX services. Some providers include them in a standard package, while others may charge additional monthly fees:

• Auto-attendants that greet incoming calls and help route callers to their

destination.

• Simultaneous ringing, sometimes called "call blast," is a popular feature

that rings multiple phones at the same time: an employee's desk and cell phone, for example. This contrasts with follow-me ringing, which tries several numbers one after another.

• Real time reporting is typically a call centre-style feature that lets

managers check on call queues and activity as it happens. Not all hosted PBX providers offer this feature– you may have to turn to call centre solution providers instead.

• Outlook integration allows users to dial directly from their address

books or change basic phone settings without logging in to the control panel.

• Unified messaging brings e-mail, voice, and fax communications into the

same system: voice mail messages and faxes can be delivered to users' e-mail in-boxes; e-e-mails can be sent to cell phones.

• Conference calling features are often included, but may be limited to

small groups unless you pay an additional fee

• Automatic call distribution (ACD) is another call centre feature. Where

hunt groups simply go through a static list of extensions to find one that's not busy, ACD factors in the volume of calls your agents have handled and how long they've been off the phone to more evenly distribute the

workload.

• Browser-based administration lets users change their own availability

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If support for mobile users is important to you, make sure to ask about features like transferring calls from cell phones back to other extensions, including cell phones in hunt groups and call queues, and using laptops as soft phones.

Telephones

If you need to buy new phones, make sure you get a demo so you can compare the layout and interface on each set. For many employees who do little more than check their voice-mail and occasionally forward a call, complicated phones can be overkill. Instead, keep an eye on a few key phone features when choosing a hosted IP PBX service:

• Phones with LCD screens allow you to better take advantage of features like caller ID and can make set-up and operation easier.

• Check basic features like speaker-phone, mute button, and speed dials. Make sure to test each feature with callers on the other end for 2-way features, to make sure the design works for you.

• You may not have to buy new phones at all: depending on the provider you choose, you may have the option to buy adapters that allow you to continue to use existing analogue phones.

• If buying VoIP phones, make sure they have a pair of Cat 5 outlets,

instead of just one. That lets you daisy-chain the Internet connection from the network to the phone to the computer, eliminating the need for two network connections in each office.

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Deciding what you need from a hosted phone service

Before you contact any hosted phone service vendors, start gathering information on your current telecommunications situation:

Table of Contents • Deciding what you need

• Your total number of current phone lines and their costs, including toll-free numbers

• Locations and numbers of employees at all offices, including home workers

• Recent local, long distance and toll-free bills

• Current broadband Internet specifications and costs (Not just "DSL," but "1.5 Mbps DSL")

• Conference calling and electronic faxing costs (if applicable)

• Current equipment costs: lease and

maintenance costs for phone system, voice mail, auto attendant, conferencing

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• Call volumes: averages, seasonal or time of day patterns, inbound vs. outbound volumes

• Contract status for any of these services – time remaining and opt-out requirements

The vendors may not need all of this information, but knowing these answers will help you get a handle on which components of your current infrastructure to evaluate and potentially replace.

All-in-one or just phone service?

A key difference among hosted phone service providers is which service

components they offer. Some pride themselves on supplying a complete solution, one that includes the phone numbers and dial tone service, long distance plans, the Internet connection, and the hosted PBX service. Others take a more

specialized approach, allowing you to use your existing Internet connection and phone service.

Each type of provider will tout their approach as being superior. The all-in-one providers can ensure that all aspects of the set-up work together smoothly. Providers who use your existing connections can focus exclusively on providing the hosted phone service, allowing other specialists to handle the Internet connection and dial tone.

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How the purchasing process works

After some initial conversation, providers will want to set up demos to show you how their service works. Some will send you a pre-configured phone that you can simply plug in to your network and use, allowing you evaluate call quality and ease of set-up. They should also let you access the administration tool so you can evaluate the management features. Other providers may just hold phone and/or web conferences to introduce you to their services.

To get specific pricing, most vendors will want to do a site visit so they can check out your existing phones, hardware, and cabling. Once they have all the