Hosted PBX systems offer cost-effective telephone disaster recovery with caveats

Paul Kirvan, independent consultant, author and educator in BC management, discusses hosted PBX systems in this Q&A.

Hosted private branch exchange (PBX) systems can be attractive for companies looking to cut back on voice communications costs. However, hosted PBX systems are not a good fit for everyone. Paul Kirvan, an independent disaster recovery (DR) and business continuity (BC) consultant, outlines what you should consider before adopting a hosted PBX system in this Q&A. His answers are also available as an mp3 below.

Listen to the Hosted PBX FAQ

Table of contents:

>> What are the benefits of hosted PBX?
>> What are the drawbacks of hosted PBX?
>> What should you consider before selecting a provider
>> Is hosted PBX primarily an SMB play?
>> What if you grow and have to upgrade?
>> Are there clear upgrade paths?
>> How does the pricing typically work?

What are the benefits of hosted PBX for disaster recovery?

Hosted, or virtual PBX systems, provide a cost-effective solution for voice communications recovery, because the "switch" is located elsewhere, and is presumably protected from disruptions through a hardened facility, backup power and sufficient network bandwidth. The concept behind hosted PBX systems is not new. It's very similar to centrex, a technology that dates back to the 1950s. But while the concept is not new, the technology is much more sophisticated.

Typically, calls from a disabled premises-based PBX system, as well as a voice over IP (VoIP) system, need to be dynamically re-routed to the backup system, which then processes calls according to customer-specified procedures. The process to initiate recovery is generally very easy, and can use a pre-configured activation process or a dynamic real-time process.

What are the drawbacks of hosted PBX?

The upper limit to the number of PBX extensions that can be supported is around 1,000, which may or may not be appropriate for a large installation. However, this can be addressed for large sites by configuring multiple hosted systems to support individual departments and single employees. But, it's very important to check the cost for doing something like this.

Another concern is whether the service provider has sufficient network bandwidth and system horsepower to support multiple disaster activations concurrently, such as in the aftermath of a hurricane. The value of hosted PBX systems can be significant in a disaster, but only if they are planned carefully and used in the proper context.

What should you consider before selecting a hosted PBX provider, and which features should users look for with disaster recovery in mind?

Hosted PBX systems tout the fact that they do not require equipment on site except for the phones, are largely maintenance-free, easy to modify and offer mainstream PBX features.

Depending on the size and complexity of the PBX assets to be protected, an examination of the pricing plans is in order. Based on the number of PBX extensions to be protected, you should choose a vendor pricing package that is closest to the number of extensions that needs to be protected, and has some room for expansion without a significant price penalty.

Vendor track records are important. Make sure the provider has been in business for a while. Also, look into customer testimonials, especially if you can speak to customers in person. Disaster recovery activation in PBX systems requires no action, as you can program the service to activate automatically if it detects an outage. Or, the service can be accessed via a Web-based interface that launches the backup capability.

A few hosted PBX vendors, such as Virtual PBX, offer specific disaster recovery solutions. Virtual PBX's disaster recovery solution is called PBX Parachute.

Is this primarily a small- to midsized business (SMB) play? Are there hosted PBX offerings for larger companies as well?

Packages tend to focus on 100 phones or less, with the greatest emphasis on 20 phones or less. Large-scale implementations seem to be possible, with a few vendors suggesting upwards of 1,000 extensions supported, but the design and engineering for such an installation needs to be examined carefully before moving forward.

What if you are a small company that grows and you have to upgrade?

Hosted PBX systems can easily expand or contract; it's simply a matter of changing to a different pricing plan. Packages typically include a maximum number of phones supported, plus 8XX numbers, fax lines, minutes of incoming and outgoing usage and specialized features such as automatic call distribution (ACD).

Are there clear upgrade paths if you need to upgrade?

Yes. Vendors we examined offer multiple pricing plans that start with as few as one phone, and can expand in increments such as 20, 50, 100 and more extensions.

How does hosted PBX pricing typically work?

Typically, users pay a fixed monthly fee for up to the designated number of stations, minutes of usage, and other features. If usage exceeds the limit, there's usually an incremental per-minute cost. There are variations on the no-installation-cost theme, each of which seems very appealing. This is possible because there is no physical installation on site. Maintenance costs are often $0 or a nominal amount per month, as the vendors use economies of scale to support their customers in a fully managed environment.

This was last published in December 2009

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