Three Ways Cloud Telephony Can Reduce Phone System Total Cost of Ownership (TCO)

Posted by Ken Zrobok on Oct 10, 2016
Ken Zrobok
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When It Comes to Cost of Ownership, Cloud Nails It

Cloud-based telephony adoption among businesses is growing, in part because companies are seeing reduced TCO after moving to Cloud.


There are 3 primary categories where a company that implements a Cloud-based telephony solution can realize a hard dollar reduction in telephony spend:

  • Carrier services
  • Reduce on site Hardware costs
  • System management

Removing the classic carrier connections

With a Cloud-based telephony solution, one of the first and most dramatic reductions in cost comes when a company is able to drop their phone service provider, saving thousands or tens of thousands of dollars a year on their voice connections and Long Distance expenses.

Moving to a Cloud phone system running over a company’s existing Internet allows a business to get rid of their local and long-distances carriers and to recover the taxes, fees and tolls that come with phone service.

Hardware costs 

Owning a system means maintaining that system's hardware and software, including planning for and implementing PBX software patches and updates as well as networking components patches and updates.  Eventually all on-premise hardware reaches end-of-life and has to be replaced.

Implementing a Cloud-based solution means:

  1. No need for IT staff to be educated on phone systems maintenance
  2. No need for large up front and ongoing capital costs on hardware
  3. Your ability to add new features and applications is not contingent on adding hardware or performing upgrades

Delegating system management 

When IT staff have to address communications systems requests like call routing and rule changes – or even simple adds and moves – there are costs involved. Every hour of time that it takes to address these requests is one less hour that an IT staffer has to work on the projects that move the business forward.

With Cloud telephony, many tasks which have historically required (expensive) IT expertise can be delegated to departmental admin staff. This delegation can also reduce the time it takes to get these tasks done, meaning less downtime for the affected employees.

Each situation is unique

Identifying the TCO for a communications system requires the consideration of multiple factors, including:

  • What existing hard costs are attached to the ownership of your existing Premise Based System?
  • The method by which the system is maintained, whether by in-house staff or by a third-party.
  • How frequently things like adds and moves need to be done and who does them?
  • Is your phone system technology providing your company with a competitive advantage?

Each situation is unique. If you have questions about how Cloud telephony can reduce your TCO, let’s talk. 

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Tags: UCaaS