Choosing a Business Phone System: 2016 Buyer's Guide

Traditional voice services such as POTS and PRI are slowly dying as businesses replace them with VoIP and LTE (Long-Term Evolution; a kind of wireless data network used with mobile devices) alternatives.

Indeed, slightly more buyers in our sample currently rely on VoIP than on POTS or PRI services. This shift in service type seems to have also driven the adoption of cloud PBX and on-premise IP PBX systems.

Prospective Buyers’ Current Phone Types

Prospective Buyers’ Current Voice Service Types

Prospective Buyers’ Current Phone Systems

Prospective Buyers’ Current Phone Types

Prospective Buyers’ Current Voice Service Types

The combined adoption rate for cloud PBX and on-premise IP PBX systems is 29 percent, which is nearly double that for legacy PBX systems (used by 15 percent). This shows that the switch to VoIP has already occurred for many small businesses: Instead of evaluating VoIP systems for the first time, these buyers are replacing existing ones.

Another interesting trend is that the adoption rate of cloud PBX systems has essentially matched that of more traditional on-premise systems. A cloud PBX system is a suite of PBX applications hosted remotely, on the service provider’s servers, while an on-premise system is hosted on-site, on the business’s own servers.

In a cloud-based system, employees can access applications such as voicemail and call recording from anywhere via the Internet, using devices such as IP phones, desktop PCs, smartphones and so on.

Cloud-based models are often attractive to smaller businesses with limited time and IT resources, since service providers handle maintenance, support and updates to the phone system. These models also tend to come with lower upfront costs than on-premise systems do.

That said, some buyers seek on-premise solutions because they want the ability to manage and customize systems themselves.

One such buyer observes that “the fact that we can’t access really anything in the system on our own is kind of frustrating. We have to call [the provider] to make any changes.”

Finally, some buyers are seeking “phoneless” deployments that work with employees’ existing mobile devices, rather than with IP desk phones. Given that no hardware needs to be purchased, such deployments can result in substantial cost-savings for businesses.

These may be especially attractive to businesses that already rely on cellphones, but don’t have a PBX system in place (8 percent of our sample).