IP Telephony Market Flooding and Cutting the Wheat from the Chafe (Pt 1)

We’ve said it before, but it needs to be emphasized- the hosted PBX provider you sign up with will determine how positively you view the technology and your switch to IP telephony. Being picky about who you choose to work with is increasingly important as the hosted PBX market grows. Not only will more organizations find themselves joining the IP telephony movement over the next couple of years, but we’re also going to see a whole lot of new hosted PBX providers jumping into the market in order to meet this demand and, unfortunately, to try and make some quick cash on what’s shaping up to be a truly hot commodity.

The Coming Flood

There are good and bad points surrounding the sort of shift we’re seeing in the IP telephony world. On the one hand it’s really exciting so many organizations are seeing the benefits hosted PBX has to offer them, and it’s really exciting they’re making the choice to take their telephony systems to the next level and reap those rewards. It’s even pretty exciting that new blood is entering the telephony industry. If any market has been slogging along with limited innovation due to the stranglehold of a few oligarchical companies it’s the telephony industry, as today’s big players were pretty well the same businesses you’d expect to find on a “who’s who” from 10, 50, and even 100 years. So on the one hand the fact there’s a lot more new interest in telephony technology than we’ve seen in a long, long time is heartening, and both reflects and hints at the sort of invention we’re going to see rocking phone lines and internet connections of the next decade or so.

But of the businesses diving into the hosted PBX market, we’d bet good money most of them aren’t going to be worth spending much time looking at, let alone worth signing up with. And if you need an example of a “worst case scenario” that might crop up in the world of hosted PBX just take a quick look over at the web hosting market.

A Telling Example

Web hosting has exploded in popularity over the last decade or so. In the early days of the internet, back in the 1990’s and early 2000’s, most people weren’t able to create their own website, and most people didn’t see the point in creating their own website. There were a bunch of factors behind this. Websites were difficult to create back then, we didn’t have the templates and widgets and platforms we have now that let anyone create a website quickly and easily within a simple point-and-click interface. Instead, you needed to know code to make a website or you needed to pay someone a bunch of money to code your site for you.

In addition it was pretty pricey to actually get online as web hosting wasn’t particularly cost effective. Yet in a very short period of time the price of web hosting went down as the cost of investing in servers and the rest of the infrastructure involved in creating a web hosting company plummeted. These days bandwidth is, for all intents and purposes, free, which means the cost of either purchasing web hosting or starting a web hosting company is very, very low. These days you can purchase introductory web hosting appropriate for a small website for just a couple bucks a month.

With an increase in ease-of-use and a decrease in price, it shouldn’t come as any surprise demand for web hosting has jumped through the roof, and in response we’ve seen an obscene number of new web hosting companies flood the market to meet this demand. Some of these companies are good but most of them are scams at worst and, at best, completely identical to the hundreds of other low-cost web hosting companies out there these days.

Unfortunately the possibility of the IP telephony market finding itself similarly flooded with low-quality, nearly-identical providers is all too possible, which means you need to learn how to distinguish the worthwhile providers from the useless.