According to an International Data Corp. (IDC) report released in late 2004, VoIP adoption is growing fastest among businesses that are opting to outsource the switch. This outsourcing option is referred to as “hosted VoIP” or “IP Centrex.” The IDC report also put the market size of hosted VoIP at around $7.6 billion by 2008.

Hosted VoIP is relevant, and the topic will come up with customers who choose a VoIP solution.

Hosted VoIP

Because of the set-up process, hosted VoIP is becoming popular among businesses wanting to start using the technology, but who are scared of the administrative and in-house technical support required. Most work is done at the switch. Moving that key component outside the business helps alleviate concerns and helps stave off other potential problems. Though opting for hosted VoIP does not guarantee smooth sailing, it does take some of those issues out of the users’ hands.

Outsourcing the switch is helpful because like all things IT related, the switch will eventually malfunction or its warranty will expire. By diverting responsibility, users are freed from the hassles associated with finding and installing a new switch. This is big plus and may convince uncertain users to adopt VoIP.

In contrast, self-hosted VoIP means the switch is installed, operated and maintained in-house. This solution works well if the company is large enough to handle the job. Maintaining a VoIP switch takes tons of time and money, which is why the self-hosted option is best suited for larger companies.

It doesn’t matter where you buy the switch or how you host it—the end product does not change. Those leery of bringing the switch in-house can accomplish the same goals by outsourcing. This is a nice option for many a small- and mid-sized business.

Rewards and drawbacks

The benefits associated with moving the switch off-site is where the distinction between hosted VoIP and self-hosted VoIP is clear.

By moving the switch off-site, users do not have to deal with the big-ticket items required to host your own VoIP system. These expensive items include IP PBX, power back up and trained staff—luxuries not every company can afford.

Perhaps the biggest problem with an off-site location on is the lack of control. Some may wish to locate the switch internally so they can make sure everything is running as planned. Some of that concern could be alleviated by carefully picking the host carrier. Contractors can help by becoming consultants to their customers and helping facilitate the process from the start. But primarily, this factor comes down to personal preference.

Individuals who choose VoIP are using a hosted solution. VoIP, however, is a work in progress, so expect hesitation. But is any technology completely flawless? If that were the case, we would all be out of business. EC

STONG-MICHAS, a freelance writer, lives in central Pennsylvania. She can be reached at [email protected].