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The VoIP Report

What Is the Lifespan of a Phone System?
July 26th, 2017

What Is the Lifespan of a Phone System?

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The lifespan of a phone system has never been so clear. The constantly growing market for electronics has resulted in shorter lifespans and the need for newer products. Updates on older software and p...

The lifespan of a phone system has never been so clear. The constantly growing market for electronics has resulted in shorter lifespans and the need for newer products. Updates on older software and performance equipment have reduced the lifespan of a phone system to far less than what it once was.

You need to know the lifespan of your phone system so you can set and manage your replacement cycle.

What exactly comprises a company’s telephony system?

A phone system is an interconnection of multiple telephones used to enable advanced telephony features. These features include call handling and transferring, conference calling, call metering and accounting, and private and shared voice message boxes.

Small to large businesses utilize this system, from a few phones to a private branch exchange (PBX), depending on the needs of the individual. Public Switched Telephone Networks, Internet telephony, VoIP, and hosted services are all different ways a phone system can operate.

Internet, VoIP, and hosted services are an inexpensive, and a much more efficient way to provide not only audio but also video and data services through a telephone system.

Service providers

There are options for hosted phone systems that allow you to pay-as-you-go for IP telephony. In this option, service providers manage everything for the business, which in turn gives them access to advanced features and functionality with less of the effort and cost of running a system in-house.

A little equipment savvy is needed to commit to this type of service because the lifespan of a phone system is not always ideal when relying on service providers. Lower prices on phone systems may indicate an updated system may be released to the marketplace soon. This can make the current system obsolete.

Often service providers will release new phone systems and terminate support of previous equipment. This forces a business to replace all of the old systems with the update versions. This situation can cause the lifespan of what may be a relatively new system to be cut short.

Hosted versus on-premise

Whether or not a business chooses a hosted system or a self-managed system could mean a world of difference in life expectancy. Between a hosted VoIP solution and an on-premise PBX, cost factors into the service’s lifespan quite a bit. As mentioned before, hosted systems are constantly being updated, which runs at a rate of replacement about every three years. Although three years may seem like a short time frame, the replacement cost is zero, and the systems can be up and running in a short amount of time.

In comparison, an on premise system can last eight to nine years on average but often last over ten years in some cases. Eventually, a company will be forced to replace the entire system. As long as there are vendors who will provide support for it, you can utilize the same system.

Unexpected changes

Often there can be a sudden shift in your company’s requirements that affect the lifespan of your corporate telephony service. There are commonly two reasons for this: an unforeseen disaster or a business expansion.

Disasters

If something happens, that could prevent employees from going into work. A natural disaster could be the end of an on-premise system. The communication system is probably the most important aspect of a company’s ability to work. Without phone and system portability, financial disaster can ensue.

Business expansion

An unexpected business development may require unexpected telephony expenditures too. While the addition of new users is not a problem for a hosted system, expanding an on premise system may be cost prohibitive.

An on premise system has a longer lifespan than a hosted system primarily because it does not require frequent updates.

Once, however, you have reached the in-house system’s limits on the number of users, you will need to replace it if you want to expand.

Other factors

The lifespan of a phone system, hosted or on premise, can also depend on other factors. Your long-term planning should include such things as reducing your capital outlay for telephony replacement and system portability.

Depending on which type of system you use, operational expenses may or may not become a budgeting issue. While a hosted system will not have extra costs in-house, an on premise phone system is sure to have more capital expense for setup and possible change of office venue during the expected lifecycle of the system.

Planned expansions

Expanding businesses may need to relocate to a larger office space within the lifespan period of a phone system. A non-VoIP or Internet-based telephony network likely will not be portable. By planning ahead and budgeting for early replacement of an in-house system, you will spread out your expansion expenditures over a period.

You will also, by replacing your in-house system early, allow your company and employees to take advantage of data, video and other capabilities of a VoIP system. You may even find that you save enough money by doing so to pay for the new replacement costs.

Conclusion

The life expectancy of a phone system can range from about 4.5 years for an IP telephone, to about 8.5 for an IP PBX.

The lifespan of a hosted system is much shorter than that of an on-premise system. To maintain the system’s relevancy due to new technology, the provider must continually update it.

However, the expense to the company related to the updating process is negligible since the provider includes that in their service.

With on premise systems, you must plan on maximizing usage while at the same time budgeting for unexpected change in technology. Given the rate of technological change today, this could quickly result in unexpected capital expenditure and even losing your competitive edge.

A reliable phone system is crucial to the operation of a professional business. The ability to predetermine costs and hence budget appropriately for these expenses is imperative. This argues for ensuring that you have a hosted system. With a hosted system, most upgrade and expansion costs will not affect your bottom line.


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