Over the past few weeks, I’ve heard of numerous stories of hosted VOIP providers who are experiencing business problems.

Don’t get me wrong, I’m not a critic of the PBX-as-a-service industry.   For certain applications and customers, it’s the perfect solution.  In fact, our company sells hosted VOIP for specific applications.   However, much like its analog predecessor Centrex, it’s a one-size-fits-all product, with very little capability to customize the service to meet your business needs.   Therefore, it works well in simpler, less communications-intensive businesses.  However, a technology assessment is not what this post is all about.

Today, the hosted VOIP marketplace is the wild west.  There are virtually hundreds of companies providing the service, most with little business history and no track records.   The technology and business case of hosted VOIP can be quite compelling, but beware the industry.  After all, you entrusting your entire business communications to these folks.

There are some excellent players in the marketplace who’ve got sustainable business models and have been in the game for years.   San Francisco-based CallTower has been around since the turn of the century and is thriving.    Wholesale Hosted VOIP provider, New Global Telecom (NGT) boasts of beginning their business way back in 1996, making them a grandfather of the industry.

However, these two are exceptions in this wild territory.   Large providers such as SunRocket and VOIP Inc. both evaporated in the past year leaving customers without service.   Locally, a swarmy company by the name of Xiptel, headed by the fast and double talking Peter Geddes did the ol’ corporate switcheroo buying out the assets of the old company and reviving themselves the next day as, guess what, Xipcom dga XIPTEL.   However, they “forgot” to tell their customers and agents.   Pretty sleazy if you ask me.

As time goes by, the industry will mature, the weak will whither and die and the sleazeballs move to the next wild west game.  Until then, be very careful when considering hosted PBX.  there are some safe choices, but you’ll have to do some heavy digging to find the gems.

I’d like to hear about your experiences.

Randy Kremlacek

Teledynamic Communications provides free educational materials about telecommunications on an ongoing basis to our subscribers and customers. The company provides a complete range of VOIP, telecom and data solutions for business.