Whether you are an IP PBX dealer in denial or a reluctant telephony agent, it’s time you thought long and hard about your stance on hosted VoIP. You see, hosted VoIP sales are growing despite the recession. For the first three months of 2009, U.S. service providers experienced an average of 43 percent year-over-year growth for hosted IP telephony services, according to data released in May by Infonetics Research Inc..

A random sampling of hosted VoIP providers by PHONE+ found double-digit increases in year-over-year revenue by several providers. Smoothstone IP Communications, for example, reported an increase of 55 percent. Apptix Inc. reported an increase of 160 percent. Others reported significant increases (20 to 40 percent) in quarter-over-quarter sales for the periods ending Dec. 31, 2008, and March 31, 2009, respectively.

While there could be lots of possible reasons for the increase — growth in distributed workforces, need for more functionality and flexibility, etc. — most vendors give credit where due. It’s no coincidence that hosted VoIP sales are up in a down economy, they said. “While some new customers are attracted to the enhanced capabilities of VoIP service, the economy is easily the primary reason for the growing interest and adoption in VoIP and hosted VoIP in particular,” said Rick Rumbarger, vice president of product at Apptix. “The ongoing recession is forcing existing and new businesses to take aggressive cost-control measures, which plays to hosted VoIP’s strengths.”

These measures go beyond the direct costs for the communications solutions to include indirect costs associated with changing business processes.

Direct Cost Savings

As you know, hosted VoIP is delivered as a subscription and costs less up front than does a premises-based system. Evaluating the exact cost differential is complicated by different types of hosted VoIP offers (BYOB, managed IP) and pricing plans (unlimited and metered) targeted toward a range of customer sizes (from five seats to 500 or even more).

Smoothstone’s CMO James Whitemore told PHONE+ most companies see a 25 to 50 percent cost reduction as soon as they switch from a premises-based PBX to Smoothstone’s hosted solution. The company targets midmarket enterprises, with an average of 750 end points. The price per seat ranges from $25 to $50 per month and includes VoIP, security, Web conferencing and contact center functionality.