Wednesday, September 03, 2014

When Can VoIP Be Cost Ineffective?

When Can VoIP Be Cost Ineffective?
By Bhagwad Park

The enterprise VoIP market is booming and quite a few organizations are scrambling to implement their own networks. A constantly changing business environment puts enormous pressure on IT managers to respond to new developments as quickly as possible. There is no doubt that VoIP provides a number of benefits at extremely low costs but every business needs to carefully evaluate the costs before moving forward.

Low-cost is a headline feature of VoIP and practically every service provider advertises the fact in ads or other promotional materials. Nevertheless, there are a few situations where implementing VoIP may not be the most cost effective solution.

1. Using hosted services instead of SIP trunking
Hosted VoIP calling is an excellent option for consumers, freelancers and small or medium businesses. Larger organizations may want to try hosted services before launching a full-scale transition but in the long-term, SIP trunking will be cheaper than hosted VoIP especially if control, flexibility and customization is important to the enterprise.

2. Legacy equipment is still working well
If an organization is in the middle of an IT upgrade cycle and the analog equipment is still functioning well, it might make more sense to continue using existing hardware and switch to VoIP later. This is typically the case for many businesses as they make the switch to VoIP when their existing equipment fails.

3. Irregular Internet connections
Not all companies operate in urban areas with plenty of options for broadband connectivity. Firms located in rural or remote areas may only have access to slow connections which will not be able to carry the additional load of voice calls. The benefits offered by VoIP may not be worth the expense of upgrading to faster speeds.

4. International legislation
Organizations within certain industries or countries may need to comply with local security and privacy laws which forbid or limit the use of VoIP for business transactions. Some nations will not allow businesses to store/stream sensitive data through networks which are outside the border, ruling out the use of hosted VoIP. Using SIP trunking may be too expensive especially for companies working on short-term projects of 2-3 years or so.

Not all organizations are ready or able to drop support for older communication methods such as fax. Although VoIP is generally cheaper than traditional voice calls, the expense of buying new equipment, training employees and improving the reliability of data networks may be prohibitively expensive for a number of reasons. In such situations, it maybe better for organizations to postpone the VoIP transition until it can be better managed within the budget.

Bhagwad is an expert consultant on SIP WebRTC. He also specializes in WebRTC Signaling.

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