Cloud Therapy: EP 012 – The Best Business Phone Service

SIP? PRI? Hosted VoIP? We know you aren’t fascinated by any of them but which should your company be using? Your host, Mike Smith takes the mic and answers this question for IT Nation. Having worked with voice from every provider imaginable for 17 years, and a consumer of business voice for 14, Mike has strong opinions on this topic and let’s ’em fly!

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What’s AeroCom’s recommendation for the 3 top voice service providers that are the best fit for your company’s size, location, and requirements? Click below to find out.

MY TOP 3 

Find the full transcript below:

    Mike: So, you’re faced with choosing a new phone service provider for your company. This means you’re probably either replacing your phone system or your contract for your PRI service is due – they are up for renewal with your current service provider. Whatever the scenario is, you’re sitting there going, “Should we upgrade to SIP? Should we go to hosted VoIP? Should we stay with PRIs? Should we go to analog lines?” I know a lot of IT professionals face this at one point or another and I know it’s a big area of discomfort for most IT professionals because voice is never an IT professional’s specialty. As I’ve said before in previous shows, I know this from experience – it’s not just the area that you spent a lot of time with, which is fine. You guys know servers inside and out and a lot of other stuff. Well, voice is something I know really well. I’ve been selling voice services to businesses since 1999. That’s almost seventeen years as of October. It’s something I know really well. It’s something I’m very comfortable with. I’ve advised hundreds, if not thousands, of businesses on which type of voice technology they should be using and I know it like the back of my hand. So, I thought it would be cool to do a quick podcast and go through some scenarios and tell you what type of voice technology is the right technology for certain situations and applications. In addition to all that value, I’ve also got another free gift to you. As I’ve mentioned in the last podcast or two, I took a lot of time to put together a comparison of the major voice technologies out there since I know a lot of you IT professionals aren’t that familiar with voice. I put it down on a piece of paper where I list in nice, neat columns: PRI, SIP, Analog lines, all that good stuff. In the rows, I put down all the different features and functionality so that you get to see, side by side, what are the differences between the major voice access technologies out there that your companies can use and which scenarios are each of these the best fit. So, kind of, what I’m talking about today, but it’s broken down into a nice, neat voice guide. If you want that, I’ll send it to you for free, no problem, just as a thank you for listening to our podcast, just text the word “VOICEGUIDE” to the number 44-222. Again, text the word “VOICEGUIDE” to the number 44-222 and I will send you that via email.

Before I get started, I wanted to throw something out there. I’m going to be making certain recommendations based on certain types of applications that your company could be doing. The one thing I’m never going to take into consideration in this podcast is corporate politics.

What I mean by that is, over the years, I’ve heard IT professionals tell me all kinds of stuff like, “Well, our management team doesn’t want anything to do with VoIP,” or “My boss doesn’t believe in renting anything,” or all that crazy stuff. Regardless of whatever old school, crazy ideas your management team has, there is a right answer in terms of what technology you should be using for certain reasons and why and politics should not come into play.

In my own opinion, if somebody is hiring you to be their technology person within the company, it is your job to tell them what the company needs to be doing, why they should be using it, and give you the freedom to choose that regardless of whatever weird hang-ups on different technologies that are based on misinformation that they have. If you’re not in a situation where you can really truly advise your management team on what you should be using and act on that, my suggestion is you’re in the wrong spot.

Anyway, the point is, I’m not going to adjust to any of that stuff because I think it’s a bunch of nonsense anyway. I’m just going to tell you what I think and why I think it, and you guys can take it and do with it what you like. So, that’s enough on that.

The first thing we have to establish are the different options out there that are available. Let’s define those:

The first is the tried and true PRI T1. That’s a pure ISDN PRI T1 and it has twenty-three channels on it, which allows twenty-three simultaneous calls to take place, and it allows you to have DIDs, which are direct phone numbers. It’s what most large businesses probably have today, still. It’s been the staple of business telecommunications for midsized companies for many, many, many years and even a lot of small companies. That’s the first option.

The second option is SIP over BYOB, which stands for “Bring Your Own Bandwidth,” which means SIP over third-party internet connectivity, which means SIP trunking. You’re sending your phone calls or you’re getting your dial tone through the internet. That’s the second option.

The third option is dedicated SIP. What this means is you go with a SIP service provider who brings out a private SIP circuit just for your phone service. In essence, this is, kind of, duplicating a PRI T1 except you’re using VoIP technology instead of TDM technology.

Instead of going SIP and sending your calls over the public internet, you’re getting a dedicated circuit. What that means is that the service provider guarantees perfect phone service quality at all times even though you’re using SIP because they are managing the circuit. That SIP company is bringing out a private circuit and they are managing the voice quality as it transmits back to their main point of presence. On the entire route, they’re managing that voice quality. It’s never hitting the public internet, so they are guaranteeing perfect phone service just like they would with a PRI.

Okay, we’ve said PRI, SIP over BYOB, and then Dedicated SIP. Another one is hosted VoIP over BYOB. This is where a service provider brings out your phone system for you or, I should say, handsets and, sometimes, switches, and the brain of your phone system is located back at the provider’s central office. You are connecting the phones back to that brain of your phone system over the public internet, over BYOB, like a third-party internet connection. In that scenario, voice quality is not guaranteed just like with BYOB SIP, but it’s a little less expensive because the provider is not bringing out a separate voice-only circuit.

You can probably guess what the next one is – it’s dedicated circuit hosted VoIP. The hosted VoIP provider brings out a dedicated point-to-point, so to speak, circuit that connects you back to their central office so that when you’re sending or receiving calls, it’s going through a protected environment. In that scenario, call quality is guaranteed at a 100% all the time perfect. If the call quality’s bad, it’s on the provider’s end, there’s something wrong. It has nothing to do with your internet connection, it’s on the provider. Call quality is guaranteed to be the same as it would over, again, like a PRI.

So, we’ve gone over PRI, BYOB SIP, dedicated SIP, BYOB hosted VoIP, and dedicated VoIP. The last one, but not least, is the old POTS line – analog lines. This is what everybody has right now for their fax lines, some people still have them for their business lines, but that’s the last type of voice access.

That’s what you’re looking at when it comes to voice. One of those options is going to be the right fit for you, but which one? That’s what I’m going to tell you.

The first question that you absolutely need to be asking and really have a clear understanding of is: What is the benefit you’re trying to get from this transition?

If you’re considering changing voice service, obviously, this is a big deal. You could have downtime during the transition, this is going to require a little bit of work on your part, and some time invested, you better be doing it for a good reason.

You really want to be narrowing down why you are doing this. For instance, are you buying a new phone system and your current phone service lines won’t work with the new phone system that you’re using or that you’re buying? Are you trying to save money? Has your boss tasked you with lowering the phone bills for your company? Do you just need a better, more functional phone system or do you need to be able to talk seamlessly to other locations or things like that? What is the number one benefit that you’re trying to achieve by going through this transition? Keep that in mind throughout the whole thing.

Now, I’m not going to go through every, different scenario and tell you what type of technology is best for what type of benefit because that’s going to depend on a lot of other variables, but I’m going to focus on other variables instead. My point is, keep that one main benefit in mind throughout the whole process of you shopping different technologies.

The first application I wanted to discuss today is contact centers. For instance, do you have a dispatch, or do you have a customer service line, or any type of contact center functionality? Do you have that going on in your company? Are people calling in and asking questions from salespeople? Anything like that where you have an 800 number, and you’re getting a lot of inbound calls, or you’re sending out a lot of outbound calls out. If you have anything like that and you are purchasing a new phone system, absolutely, without a doubt, hosted VoIP is the way you want to go. Do not purchase an on-prem phone system.

Why am I so certain? Because of experimentation. If you’re a company that has a contact center, typically, you’re a company that a lot of your business revolves around that contact center. Whether it’s an outbound contact center or whether it’s your customer service line, that customer experience within that contact center is super important to your business. Whether or not you see that angle of it from the IT department or not, that is critical to your company’s success.

That being said, since it’s critical, you really want to be constantly experimenting with different ideas when it comes to your contact center. You might want to experiment with chat for a while. You might want to experiment on some advanced call routing things like routing calls based on the last person that they spoke to. Maybe, you want to implement surveys where after each call, each caller is being surveyed on their level of satisfaction and making sure that if they had bad experience that they never get routed to that same contact center agent again.

All these little fun things that you can experiment with a hosted VoIP system, meaning you can turn it on for a little bit, if it works well, great, expand it. If it doesn’t work well, you can turn it off and stop paying for it. You cannot do that with an on-prem system. That’s why I recommend, absolutely, if you’re using any type of contact center or a call center, go with hosted VoIP just for that reason alone.

Also, it’s more redundant, so if, for some reason, your voice access dies like your PRI or the power goes out or something like that, you can reroute your calls. Your calls are still being received from that brain of the phone system in the cloud or back at the provider and they can simply reroute the calls to another location, or another phone number, or voicemail that’s still active. If you have an on-prem system and access to your locations gets cut off like the power goes out or your PRI goes down, your whole contact center is down. All the people calling in or trying to call out is down. There’s no other way to do it. There are a lot of advantages, but, I’d say, just because of the experimentation thing, alone, everybody in our industry contact centers should absolutely go with hosted VoIP.

Now, if you’re not looking to replace your phone system and you have a contact center, you’re just looking to replace the phone lines or something like that, what I’ve said, kind of, still appeals to you. There are a couple of providers out there who can actually give you a hosted VoIP phone system that will allow you to keep your existing handsets and phone system in-house that you currently have. The way they do it is they integrate their online software with your on-prem phone system so you can use both. You can be picking up the phone with your on-prem phone system and utilizing online call center software that’s routing calls and doing all the tricky stuff. So, there are ways to implement hosted VoIP with an on-prem system.

Say, none of that is the is the case and you have a big, sophisticated on-prem phone system that you’re not looking to change and you have a contact center, but you’re just wondering should you switch from PRIs to SIP. That depends. If you absolutely want to make sure you have perfect call quality at all times, you’d have to go to dedicated SIP, meaning the provider would have to bring in T1s or some type of dedicated fiber circuit that’s just for voice. Your SIP provider would have to bring it in.

You’d have to look at that cost difference. You might be able to save a little bit on the rates if you have a high volume of calls with SIP as opposed to PRI, but probably not a whole lot. You’re not going to experience a huge cost savings from going from PRIs to dedicated SIP. So, I’d say, you know what? Probably just stick with PRIs if you’re looking to just switch providers. You can probably just switch PRI providers and get a lower rate. If you’re not changing your phone system and you have a contact center in place, I’d probably not recommend switching voice access technologies from PRI to SIP or vice-versa if you can avoid it. That would be my recommendation there.

Second scenario is your company is looking to switch voice access technologies or investigate it and you have multiple locations. If you have multiple locations or your company has multiple locations, I should say, and you’re looking to replace your phone system as well, I would recommend hosted VoIP. Why? Because you can have one seamless phone system distributed with all the locations with one voicemail system, all that.

It’s very simple to set up, very simple to manage. You can have dedicated circuits at your larger sites and have guaranteed voice quality, and you can have hosted VoIP over BYOB at your small sites that aren’t big enough to warrant a dedicated circuit. Again, you can have seamless communication between all locations. Each location can transfer calls back and forth, you don’t need to set up a wide area network like an MPLS network in order to transfer calls between sites and have good call quality, you can have your credit department approving credit for customers at one site and you can have customer service at the next, you could transfer calls seamlessly between one another without a network – all those different things.

From an IT standpoint, you can manage it, do adds, moves, and changes from anywhere. You don’t have to be on-site. It’s super easy for IT to manage. It’s just a much better scenario. If you have multiple locations, hosted VoIP is definitely the way to go.

If you went with an on-prem system, you’d have to set up an MPLS network. If you want to be able to transfer calls seamlessly, you’d have to have boxes installed at all sites, possibly. It’s a big undertaking and you really have to be getting involved in a lot of voice stuff if you want to do an on-prem system with multiple sites, so I don’t recommend it if you’re shopping for new phone systems right now.

Now, if you’re looking for just voice access options and you already have a phone system in place, maybe, have an MPLS network already in place or something. Your contract is coming up with your voice provider for your PRIs, and that type of thing, and you’re wondering, “Hey, should we go to SIP at all these sites or what should we do?” SIP is probably the best scenario for multiple locations as opposed to doing, say, PRIs at all the sites or if you’re doing analog at some sites and PRIs at others, SIP is probably the best way to go.

Guess what? You probably don’t have to do anything to your phone system to go from your current voice access technology over to SIP. There are a lot of SIP providers that can hand the SIP service off to you as analog lines or PRIs for your phone system. They just bring a box out on site that the SIP connection plugs into and out pops a PRI handoff or an analog line hand off so that your phone system doesn’t need a new card or you don’t have to do any changes to the phone system at all. You can get SIP service no matter what your current voice access technology is.

The reason I recommend, probably, going SIP if you have multiple locations is, first and foremost, the failover capability with SIP is much better. With SIP, you can have a primary place that your incoming calls are coming to. If that route fails, you can fail that incoming call over to anywhere in the country or anywhere in the world. You cannot do that with analog lines or PRIs. You can only do that with SIP. PRIs, you can fail it over to, say, analog lines, but they have to be in the local area. It’s just the nature of TDM technology. With SIP, you can take that call and fail it over to anywhere in the country using the right provider.

Also, if you have multiple locations, SIP is better because you can have the flexibility of having local phone numbers from any site ring into any site in the country. You cannot do that with PRI or analog lines. It’s just the way that the phone company and all the regulations are set up. For instance, if you have one location that wants to take in all the phone calls and then distribute them throughout the country, you can do that with SIP. You can have all the local phone numbers from each one of your sites in the country ringing into one site. You cannot do that with PRI. With PRI, the only local phone numbers you can have ringing in on that PRI are the ones from that local vicinity, same thing with analog lines.

SIP just allows you more flexibility if you have multiple locations. If you have multiple locations and you’re not switching out your phone system, I recommend going to SIP and I recommend finding a provider than can hand off SIP as PRI or analog lines so that you don’t have to make any changes to your current phone system.

Well, what if you don’t have multiple locations? What if you just have a single location? Okay. If you have a single location, if you are looking to replace your phone system, the only time I recommend going with an on-prem phone system, like going out and buying an on-premises phone system, is if your company doesn’t foresee any changes like growth more than, say, 10%, downsizing more than 10%, industry changes, things like that within, say, the next ten years.

So, you guys have never really changed a whole lot, you don’t foresee any changes going on, you have a single location, you know what? You’re a good fit for an on-prem phone system. Why? Because nothing’s going to change. You don’t have to change anything. You can buy a system and ride that thing out for a long time.

That’s probably the only scenario that I’d say that’s a good fit. Otherwise, if you foresee any changes whatsoever, go with a hosted VoIP phone system. Why? Because you can’t predict how big your company is going to be and you also can’t predict how small your company is going to be, which the way most companies are these days.

Industries are changing so fast that if you look at… If you study business like I do, everyone is always talking about the rate of change in business right now is faster than it’s ever been. Everybody has to reinvent themselves all the time and nobody can really predict how their business is going to be acting in five years. If that’s the case, communications has to go with the type of things that you’re doing. There are so many new technologies coming out on the communications end that you just cannot be tied down to anything.

You know what? All that ROI stuff that I’ve seen decision makers talk about, “Well, oh, with hosted vs. on-prem, our ROI on an on-prem is within three years,” that’s a bunch of nonsense. I have a business major from college, I have an MBA, I’ve owned my own business for thirteen years, and that is the worst way to calculate anything I’ve ever heard of. There’s a huge thing that’s being left out of that – it’s called “opportunity cost.”

If your company changes drastically or changes quite a bit in the next few years and you’re stuck with an old phone system, there’s a huge opportunity cost there. Your company is missing out on a ton of communications efficiency and lack of productivity from the number one cost it has, which is employees. If your employees can’t communicate properly and can’t communicate as well as their competitors can, your company’s getting crushed. So, ROI on a phone system just by doing a straight math calculation is missing a huge component of that opportunity cost.

So, absolutely. There’s way too much change going on right now especially if you look at phones themselves. Phones themselves, do you really think handsets for businesses are going to look the same as they do now, maybe, five years from now? Well, look at your cell phone. Do you think cell phones are going to look the same in five years? Well, why would you think anything different of the handset sitting on your desk?

In an industry that’s going through a massive overhaul like telecommunications, why would you buy anything? Don’t buy it. Rent it. Trust me. It’s a better write off for the business, it just makes more sense, and it’s completely reliable. All that stuff you hear about it not being reliable, that’s nonsense. Just go to dedicated circuit, it’s totally reliable.

Also, I’d argue that it’s more reliable than an on-prem phone system because if someone tries to call you, just like we talked about with a call center, and your phone lines are down for whatever reason (we all know PRIs go down, we all know power goes out), your phone calls are still being received. All of your users can simply redirect their phone calls to their cell phone. In fact, a lot of them have find me/follow me on anyway, so they’re still coming in. At the very least, they’re just answered by voicemail in the cloud or you could redirect it, but they’re never going down. So, to me, a cloud phone system or a hosted phone system is more reliable than an on-prem phone system. So, that unreliability factor just doesn’t exist. That’s why I’m such a proponent for hosted phone systems.

We’ve had a hosted phone system in our office since 2005. It’s been fantastic. We don’t have any issues with it. It’s brought us a lot of advantages. You know what? I wouldn’t even buy the handset. Some providers offer the handset, don’t even buy the handsets. I’ve done that before, I’ve made that mistake, and I’ve regretted it. I’ve paid $300 for a handset. I’ve paid $100 for handsets. I don’t want to pay anything for handsets moving forward because, within five years, I always want different ones. There are better things. There are now big, colored touch screens for handsets that allow you to add apps on them and all kinds of cool stuff, so don’t even buy the handsets.

If you foresee any change within your company and you’re buying a new phone system, go with a hosted system. Trust me. It just makes the most sense.

Okay, that’s enough about that. Now, what if your company is not buying a new phone system and you have a single location? Should you use a PRI, or should you use analog lines, or should you use SIP? Well, most of you probably have PRI out there and you’re probably wondering if you should go to SIP. It goes back to the fact that, with SIP, you are not going to save any money, typically, with a single location, if you’re comparing apples to apples, moving from a PRI. I would not switch technologies just to save money.

Now, if you want to do something cool with SIP like if you want to be able to fail over more locations or you have a couple of remote sites… I know that we’re talking about a single location, but, say, you have a couple of remote sales people at different parts of the country and you want some different local phone numbers to be able to ring into that site, or you want some cool features and functionality, yes, you may want to go with SIP trunking. But, for the most part, if you have a PRI in place now, you have a single location, there’s really not a whole lot of need there to go to SIP to save money or anything. You’re not going to save a lot of money if you’re really going apples to apples.

If you want to throw some caution to the wind and you want to try SIP over BYOB, like, just sending it across your internet connectivity, by all means. But, in that scenario, just be aware, there’s no guarantee on that voice quality. You’re going to save some money, but when your users are complaining that they have gargle-y voice or there’s one-way media going on like they can hear the person on the other end of the phone but that person cannot hear them, stuff like that, that’s going to happen once in a while with BYOB SIP. There’s no way around it. You just cannot control the public internet.

It doesn’t matter how much bandwidth you throw at it. It’s latency, packet loss, and jitter that is going to cause that type of stuff. You cannot control that – I don’t care how big your bandwidth is. Just know that if you go for the cost savings that you’re going to sacrifice some call quality stuff going from a PRI, where everything is tried and true and guaranteed at all times, to SIP over BYOB.

Overall, I’d say, if you have a PRI, you have a single location, you’re not switching out phone systems, I’d probably just stick with the PRI, maybe shop PRI service providers to see if you can save some money that way – that’s probably your better route. We made a living off switching out PRI service providers for companies for many, many, many years. A lot of times you’re with a provider that’s way over charging you, so, absolutely, shop around. You might find some good deals out there or maybe you’re not happy with your current service provider (find a better one), but switching voice technologies doesn’t really make a whole lot of sense in terms of cost savings in itself. SIP is not going to save you money if you go dedicated SIP versus just a PRI unless you have multiple, multiple PRIs like three/four/five PRIs and you’re going to go with SIP T1s – you might be able to skimp a PRI or two by compressing the voice. Hope that makes sense.

So, that’s my breakdown on voice technologies, what you should use, when you should use it, and why. I hope that all makes sense to you. I hope it was worth something.

Don’t forget to collect your free gift. It will, kind of, compliment this conversation. It’s that voice comparison chart where I break down the different voice technologies, and all the differences between them, and when each technology is going to be the best fit for different applications for businesses.

I’ll give it to you for free as a gift for being a podcast listener. All you have to do is text the word “VOICEGUIDE” to the number 44-222. Again, just text the word “VOICEGUIDE” to 44-222 and I’ll send you a free soft copy of that voice guide. Alright, that’s it. Have a great day and I’ll talk to you next time.