Upfront VoIP Costs – How much is it?

Part of the attractiveness of VoIP is no doubt the price. VoIP generally costs less than typical enterprise phone systems, no matter the size of the organization. Not only don’t you have to spend as much to get it up and running but your monthly bills will show a decrease as well. As such the savings continue to accrue the longer you use the service or product.

Sometimes businesses focus on the price to the detriment of all other aspects. The aim is not to get the cheapest phone service or every advanced feature imaginable. For an enterprise, the question should be ‘Am I getting enough value for the money I pay?’ The least expensive VoIP service may not have even the basic features that your business needs. On the other hand, paying for the highest plan might get you features that you don’t use at all.

Another aspect to the cost savings that come with VoIP is when and where you can save money. Are you more concerned about the upfront cost or capital investment? Or do you care about the monthly bills and ongoing maintenance? This is where the concept of total lifetime cost comes into play.

Upfront Cost versus Total Lifetime Cost

When you compare hosted VoIP and on premise SIP deployments, it quickly becomes apparent that the latter is much more expensive to set up. However once it is up and running, the costs per call as significantly cheaper than hosted VoIP services. It means that organizations that have high call volume and the expertise to maintain their own equipment, on premise deployments actually make sense. Over the lifetime of the hardware and software, it works out much cheaper than purchasing services from an external contractor.

But that doesn’t tell you the whole story. There are many organizations that lack the financial resources to invest in equipment upfront. Other businesses may not have the IT expertise available in house which means hiring external consultants. Yet more companies may not want the hassle of maintaining their own phones when they can pay someone else to take care of it for them. In all these situations, hosted VoIP service may be more appropriate. Remember what works for you may not work for someone else.

How Much Does VoIP Cost Upfront?

Similar to other aspects of VoIP technology, the upfront costs will vary depending on the service or product you’re purchasing. Let’s take a look at a few categories. In all these situations, we assume that the business has the required Internet infrastructure and available bandwidth for VoIP. If not, you might incur expenses to upgrade network equipment or get higher Internet speeds.

Cost for Demos or Trials

In nearly every case, the cost for trying out the service for a set period of time is zero. Different providers offer different flavors of the demos. Sometimes the free demo will not have all the features that you would typically get. Some advanced features may be deactivated or disabled. One-time purchases may be included for free or at a discounted rate.

Other vendors will let you try out the service with all features enabled. However the demo period may last for only a few days. In most cases the provider would require a credit card on file. Businesses should be aware of shady vendors who will attempt to bill you even if you don’t like the service or have canceled.

Upfront Costs for Hosted VoIP Services

For small businesses that do not have complex requirements, the upfront costs may be either zero or the cost of purchasing a few IP enabled phones. If you can manage with software applications on computers and smartphones, then there is no need to purchase anything. VoIP desk phones can range in price from $50 to upwards of $500, depending on the features you need. Keep in mind that not all employees will need desk phones and not everyone needs the latest model.  The vendor will take care of updates, maintenance and security. So all you need is to pay the phone bill each month.

Upfront Costs for on Premise SIP Deployments

On premise installations cost considerably more to set up initially. You have various costs including purchasing SIP trunks, PBX software, additional network security hardware (like SBCs) and so on. You should also consider the time and effort involved in getting the system off the ground. Suppose you require three people to maintain the system and you only have 2 qualified employees, you need to hire another person. Existing employees may need additional training to get up to speed with the latest systems.

The upfront costs for upgrading to VoIP can be as little as a few hundred dollars or as much as thousands of dollars per user. If you do your research and know what you want, you can get the best value for your dollars.