We are two decades into the VoIP transition and there are still many businesses moving from traditional communication systems to modern VoIP services, like hosted PBX. Now is an ideal time for service providers to help these businesses make that transition and participate in the fast growing cloud communication services market.
Business VoIP in the U.S.
There are 2.9 million SOHOs (Small Office/Home office) and more than 2.7 Million small to midsize businesses with up to 500 employees in the United States (US Census Bureau data from 2015). These SMBs employ more than 58 million people, and most of these businesses are still stuck on TDM and could use your help moving into the IP communications world.
Here are a two data points that highlight that robust VoIP adoption lies ahead:
- While the majority of U.S. landlines are VoIP overall, business lines still lag the overall market; just 48% of business lines are VoIP (read more about this FCC data in our blog post The State of Wireline Phone and VoIP in the U.S.).
- Edgewater Networks conducted a survey of 1,250 SMBs in the U.S. and found that IP communication adoption ranged from 34% of businesses with 500+ employees to just 13% of businesses with 1-4 employees.
Given this potential for adoption, every analyst firm predicts strong growth for cloud communications and the role service providers will play in making that happen.
- Frost & Sullivan expects hosted PBX/UC users in North America to grow to near 42 million in 2021 (over 5x the number of lines in 2014).
- Gartner preducts that end user spending on cloud-based unified communications will eclipse on-premise based in 2020; Global end-user spending on unified communications will reach approximately $43.5 billion in 2021, a 17% CAGR from 2015.
Business Voice and Cloud Communication Services
Before you can begin offering hosted PBX services to your customers, let’s define the overall IP communications landscape .
- Business Lines – Some businesses aren’t ready to leave their traditional phone communication practices behind. In that case, simple business lines is the best option. Using VoIP transport and call control, this service allows your customers to keep analog systems and multi-line phone services to place and receive calls.
- SIP Trunking – Provide IP-based PSTN connectivity services for private branch exchange (PBX) and call control systems at your customers’ locations. They manage the handsets and features and you provide the phone numbers, minutes and the global connectivity via flexible IP-based connections without the costly and static PRI and TDM connections of yesteryear.
- Hosted PBX – Takes that PBX functionality into the cloud into a fully managed, more flexible communications solution. There’s no on-premises equipment, aside from the IP phones or soft clients that connect to the cloud platform. It’s perfect for new businesses and for SMBs who want to extend office voice and UC services to multiple offices, mobile employees and teleworkers. Hosted PBX has many synonyms (e.g., cloud PBX, hosted VoIP) and is a core component of UCaaS (unified communications as a service).
- UCaaS – Builds on the cloud/hosted PBX services and adds in collaboration tools, messaging, and video conferencing.
While you may offer all of these options to your customers, it’s important to recognize that hosted PBX and cloud communications is one of the most flexible and highest growth markets. It applies to companies of any size and can be adopted into numerous verticals.
Why Should You Choose White Label Hosted PBX?
If you’re a service provider looking for opportunities for growth and expansion, hosted PBX could hold the answers. So the next question is: how do I get there? What do I need to offer these solutions? Short answer is: software.
So, then the question becomes: how do I get this software? You can buy it and build a network or cloud source the solution. Here, we’ll explore why a white-label hosted PBX solution is a better choice for your company over the traditional, build-your-own-network approach.
And while there are different ways to white label (using a hosted softswitch from a retail provider vs. picking a software-as-a-service cloud solution, for example) here, we’ll focus on the why behind white labeling instead of the how (read more about the differences in approaches in Why the Cloud is Better than Wholesale Hosted VoIP).
Building and maintaining your own network to deliver hosted PBX and cloud communications would require a substantial investment in high-priced software and equipment to offer the services. However, when you partner with a PBX host, they are responsible for hosting and maintaining equipment. Instead of large upfront equipment investment and operations, service providers simply pay a monthly fee.
The subscription-based model offers a number of benefits. As a consumer, you are used to paying only for what you need. The same holds true with your business. Using a subscription-based pricing plan, you only pay for the elements of the plan that you need, eliminated wasted cost on other features. This enables you to direct funds that would otherwise be spent on hardware and software to growth initiatives instead.
Using a white label partner provides you the smart way to scale. Imagine if you managed your own softswitch and network. When you experienced substantial growth, you would need to invest in more equipment to support your services. If your client base dwindled, you would have invested in equipment that was no longer needed. With a white label solution, you can scale easily with your success without the need for disruptive upgrade and investment cycles.
Ownership of Everything (But the Software)
When you choose white label solutions, you still own the relationships with your customers and the profits that come with those relationships. Your business is the face of the product, as customers still interact with your brand and your sales and support staff. It’s your brand and your customer.
One drawback of hosting your own PBX services is that if a disaster occurs, from something as major as a flood to something as minor as a power outage, service goes down. With a cloud-based, white-label solution you have a more resilient platform – there’s no single location or single point of failure. Your clients will maintain productivity, and you increase trust in your business. This means a better reputation for your brand and a loyal client base.
Faster Time to Market
Providing your own PBX services not only requires a large investment in equipment, but a large time and staff investment, too. Building and integrating and then running the network requires many months and a commitment to building an engineering and operations team. You can devote time and effort to other endeavors like increasing sales and maximizing profits.
Flexibility and Market Agility
White label hosted PBX services can grow with your business as you add more clients and users. When you partner with a cloud provider, they can add or remove accounts for you almost immediately, and the same holds true for your clients, as well. Users can be added as needed to instantly reflect changes in their business.
Ready to Launch?
White label hosted PBX services can deliver a rapid win for your business. It offers an entirely new revenue stream with minimal investment from you. And, because everything is delivered via the cloud, this is a service you could begin offering quickly.
Take your service offering to the next level with a white label hosted PBX solution. When you do, you’ll be reaping the rewards of the ongoing cloud communication evolution.
Do you want to learn more about partnering to launch hosted PBX and cloud communication services? Contact Alianza’s experts today.
Note: this blog post was originally published in December 2019, but updated in November 2019.