70% of Hosted and Cloud PBXs Are Bought by SMBs Using Less Than 30 Phones

In 2012, almost 70 percent of hosted and cloud PBXs worldwide are bought by business that use systems consisting of less than 30 phones. This is uncovered by a two-year worldwide research initiative by the Eastern Management Group. The research project involved over 16,000 service providers and IT managers. 

Service providers are revealed to have offered hosted and cloud PBX systems to small businesses in the range of five to 20 phones.

Service providers in North America (U.S. and Canada) sold most of the hosted and cloud PBXs in 2012. The study predicts that this will drop a few percentage points per year because other regions in the world will increase their usage. With its 58 percent year-over-year growth for 2012, Latin America is one of the fastest growing markets in the world. Meanwhile, Western Europe maintains its place as the second-largest hosted and cloud systems market.

“The market may grow unabated provided service providers have capital to add hosted and cloud PBXs,” wrote John Malone, CEO of Eastern Management Group, in a Telecom Reseller article. “But service provider speed bumps along the way are ROI compared to alternative uses of capital; offering the right features; focusing on the SMB not just the enterprise; and making certain that offering hosted and cloud is not perceived as a necessary evil to the service provider.”

Traditional service providers experienced declining business access lines, and their customers resorted to premises-based PBXs from their competitors. Service providers claimed that their competitors could offer PBXs identical to what they were selling – except that the competitors could offer lower prices. The study found that hosted and cloud PBXs could solve these problems.

Advantages to Service Providers Offering Hosted and Cloud Systems

Hosted and cloud systems provide about 70 percent satisfaction to customers worldwide. Less than 1 percent claimed they were considerably dissatisfied. What’s more is that only a mere six percent of the satisfied hosted and cloud customers reported that they would try a premises-based PBX system the next time around. It looks like hosted PBXs, in particular, may also be instrumental in building brand loyalty to a service provider. This proves very encouraging for service providers.

The worldwide hosted and cloud systems market swells at double digit rates, with hosted systems becoming doubly profitable for service providers as premises-based PBXs.

Moreover, hosted systems attract a range of new applications and services, including hosted data center, security, video, and even Microsoft Lync’s platform. And when end customers jump in, service providers will have three additional advantages: “they already have the customer, they maintain the customer’s records, and they have an operational billing system.”

Reasons SMBs Choose Hosted and Cloud PBXs

The Eastern Management Group survey discovered that cost or capital outlay is not the major reason majority of SMBs resort to hosted and cloud systems. It is also not because of new businesses getting hold of their first telephone system or established businesses expanding to meet higher capacity.

The main reason SMBs install hosted and cloud systems is to acquire features that enhance their productivity. And when it comes to value proposition, productivity is given more emphasis than cost. Forty-six percent said they bought hosted PBXs for the productivity features, while 39 percent said that the decision was for cost savings.

Challenges Encountered by Service Providers Offering Hosted and Cloud Systems

According to the Eastern Management Group study, the most common issues encountered by service providers offering hosted and cloud PBX services include the features to add, seat-pricing schemes, selling, scaling, financing the initial investment, and pinpointing a true peer group in order to minimize the learning curve and reduce business risks. (KOM) Link