There are many reasons why hosted voice services are gaining adoption in 2010, and I’ll explore some of them over a series of Focus Briefs. To date, most businesses using hosted services have been SMBs, but enterprises are starting to find reasons of their own to go down this path. The definition of hosted services is both broad and fluid, which has actually held back its growth by making the value proposition difficult to understand. This brief is a starting point to address these uncertainties, and the focus here will be on five basic considerations for implementing hosted voice services.

The following considerations apply to both SMBs and enterprises, but each could easily warrant separate analyses in future briefs.

Level of IT expertise. This is one of the first things to evaluate when considering hosted, whether for part or all of your voice services. When businesses start to deploy VoIP and IP telephony, they need to follow the path of network convergence. Some businesses do this gradually, and some elect for a wholesale “forklift upgrade” to make a complete migration. In either case, this new network environment may prove too challenging for the existing IT expertise. There are many examples of why this would happen, but the outcome is the same. Once the business recognizes they lack the in-house skill set for these new technologies, the hosted option starts to make more sense.

IT investment and priorities. While the above consideration relates to how able IT is to manage VoIP, this relates to how willing the business is to do so. Even though a business may have the requisite IT expertise to handle network convergence, this may cause them to take a harder look at the economics of continuing this investment given the option to outsource most of this to a service provider who is more than capable, and at a lower cost. Another scenario would be where the business is not prepared to scale back its IT investment, but they simply have higher strategic priorities. In this case, the move to hosted is just good business, leaving them to focus their IT resources on more valuable functions.

Overall motivation for choosing hosted. This consideration shifts from the realm of IT to the bigger picture decision makers running the business. Many companies – especially SMBs – are motivated by the overall need to reduce costs wherever possible. If the economic benefits are clear, this may be reason enough – and possibly the only reason – to go with hosting. Businesses that have had long histories with their incumbents are well aware of the high costs of telephony relative to IP-based alternatives, so this can be a key consideration. On the other hand, some businesses will see limited economic advantage with hosted, but instead see a stronger strategic rationale to outsource operations that cannot provide competitive advantage. In these cases, the consideration for hosted will have more to do with how the business relationship will benefit the company as opposed to simply lowering telecom costs.

Perceived role of telephony. This consideration speaks to how a business views telephony in the context of everyday operations. Businesses that run conservatively and are not comfortable with new technologies will see hosted simply as a less costly and/or more practical way to manage telephony. They can still get value from hosted, but only in a limited manner. Businesses that take a broader view of hosted will be more communications-centric than voice centric, and look to this solution as a way to improve on what they had before. Not only will hosted give these businesses a richer telephony experience, but it can pave the way for more integrated communications capabilities that bring voice, data and video together in ways that were not previously possible.

Trust in the cloud. The extent to which a business embraces hosted voice services will often depend on how much they trust the model. There are varying degrees of trust for outsourcing anything, partnering with a hosted provider, as well as relying on cloud-based services. The cloud is emerging as both a complement and an alternative to hosted services, and reflects the growing trust businesses have here. Trust is defined on many levels – reliability, scalability, quality of service, privacy, security, storage – just to name a few. Businesses need to take all these into consideration especially if they are new to hosting. They may choose to start with a basic service and build the trust, or jump in deeper to take fuller advantage of new capabilities right away.

Every scenario is different, and this is just a basic review of considerations a business needs to consider. Just as the needs of businesses vary widely, so do the types of hosted services. As such, there is a viable solution for most any scenario. The important thing is to be aware of the range of variables that will impact this decision, and to think through the possibilities carefully. Telephony can no longer be viewed in isolation from the rest of your business, and the more you see the possibilities of integrating it with other communications modes, the more interesting the hosted options become.