When it comes to hosted VoIP, there are really two major considerations for any small business:

1. How good is my LAN / WAN connectivity?
2. How good is the service provider I’m choosing?

In our experience, failure to address #1 is the root cause of most people who have any kind of issue with hosted VoIP. Simply put, these are businesses that are trying to do too much with too little bandwidth and whose network isn’t configured to give VoIP packets appropriate weighting to mitigate voice latency/QoS issues. They’re on a basic T1 serving a large office of people that are streaming video, browsing the web, and downloading large files, and now they want to pile on a few dozen concurrent calls without kicking up their broadband a notch. No, that’s not going to work.

As far as #2, I can only say we make it a point to resolve these issues prior to any installation, while other hosted providers seem content to dodge accountability and let customers languish in mediocre / unsatisfactory service. It’s not hard for our highly-trained installers to look at a customer’s network and say, “You need a better Internet connection before I’m going to install fifty VoIP phones here.” Or, “Your routers are basically tinkertoys. They don’t have the features you need to reliably run voice and data over the same network. I recommend these ones.” Or, when appropriate, “We offer an MPLS solution.” And then show the customer how that affects their TCO and let them use that information to make the decision that’s best for their business.

When it comes to features, I don’t know that any given on-site PBX has a leg up over all hosted VoIP solutions. FreedomIQ, for example, is a very feature-rich service. I’d venture to say one of the better platforms in the hosted VoIP market. While other providers don’t have / nickle-and-dime over basic features like call queues, we throw in everything but the kitchen sink. We’d throw that in, too, if we had a few lying around.

I am familiar with Digium / Asterisk, and I think you keyed in on it’s most important value with “not proprietary.” The biggest flaw with most hosted VoIP providers is that they don’t own their technology. They bought it or are leasing it from somebody who stopped developing it ages ago. They’re working off the same platform as they were 5 years ago, and the same platform they’ll be working from 5 years in the future (if they’re still in business). With FreedomIQ, that’s not the case. We built our platform from the ground up. It’s completely flexible and constantly improving, because we possess the tools and resources to change anything we need to change at any time. That means new features, new functionality, integration with 3rd-party applications, etc.

There are certainly a lot of fly-by-night hosted VoIP providers out there leaving a wake of angry customers. Believe me, we deal with them, too. This is because most hosted providers are marketing companies first and technology companies second, so they react to issues like QoS with obfuscation and misinformation instead of proactive solutions. That makes their technical support (outsourced, usually, unlike FreedomIQ) a distant third. We’ve made our mark in the industry by doing the opposite: taking care of our technology and our customers first, and letting that speak for itself. If that means spending more money on developers and server architecture than creating hollow marketing buzz, well, so be it.

I appreciate the comment. These are real issues facing customers making an important buying decision. With time, hopefully the more reputable companies will come to the forefront. I can already say the hosted market is better off than we were a few years ago. Until then, however, it’s largely an exercise in education and integrity. With rapidly increasing market share, I can’t help but think we’re doing something right.

In dealing with Hosted VoIP, what latency issues do you find are significant in terms of call quality? I deal with phone systems (hope you don’t mind my thoughts) and obviously we have to wrestle through dealing with customers that love/hate an on site PBx and customers that love/hate hosted voip as well. It seems to me that very few hosted solutions really understand the latency/QoS issues, and thus the results are usually mediocre. It also seems to me that a larger business is going to get far more out of an onsite solution due to the significant increase in features.

Are you familiar with the new systems that are being written on Asterisk (i.e. Digium)? These are onsite solutions that are not proprietary, allow cutom app builds, and are continually updated from a software perspective. How do systems like these stack up agains hosted?

Thanks for entertaining the discussion and keep up the good work. This is a good article…

Make sure you pick a company who know what they’re doing with phone systems or it could cost you a lot.