Bundled pricing models are becoming more commonplace in the current enterprise telephony market, as an increasing number of providers turn to ‘per user, per month’ models, for both call minutes and full services. But in an uncertain economic climate, where cost control and consolidation are high on the agenda in the boardroom, do bundled packages represent good value for money?
While the convenience of ‘per user per month’ pricing is understandable, these bundles can be up to 60% more expensive than other options.
What are the options?
There are four types of pricing models available for enterprise telephony buyers to consider, each with their own nuances. These are:
- The ‘as a service’ (aaS) model:
This applies primarily to full cloud or hosted platforms where you are buying a full suite of features and services,. They are conveniently priced on a per user per month basis for ease of budgeting. However, with these models you need to be clear on whether call minutes are included, and understand exactly what features and services you are paying for. Offerings packaged like this can sometimes lead to you paying for functionality or services you don’t need.
- Monthly usage contracts:
These plans see you agreeing to a contract amount based on your monthly usage and number of users. Again, convenient from a budgeting perspective, and typically they allow you to pool minutes (where minutes are included). For these plans you need to have a reasonably good understanding of your likely usage or you could find you pay for more than you need, which rarely gets carried forward or credited. You should also understand what happens if you go over your amount especially if you get an unexpected spike in traffic. Are there penalty costs? Will calls be disconnected?
- Monthly Call Plans:
These are becoming quite common and represent one of the options available for Microsoft Teams. Call plans are similar to monthly usage contracts, but they only include call minutes. They do not include other platform, license or service costs so remember to factor those into your calculations. While offering another convenient model for budgeting, often the price points per user can be quite high when you factor in your likely or current usage. It is also worth understanding exactly what your call limits are; what happens if you go beyond the limits; what services are covered (local, international, mobile etc.). Also understand how call duration will be calculated; will a 20 second call be rounded up to the nearest full minute, for example. These rounding behaviors can have a significant impact on your usage.
- Pay for what you use/need:
Arguably the most transparent of all the models, its approach is exactly as it says – you only pay for what you use. Although it may not come with the convenience of a regular monthly price, it is invariably more cost effective. During holiday periods of lower activity, for example, you will not pay the same flat rate offered by the other models. This approach can be applied to both call minutes and core services such as channels.
Which model is right for you?
It depends on your individual circumstances, although ultimately decisions are influenced mostly by convenience or cost. For some businesses, the convenience and ‘budgetability’ of a bundled offering is something they are willing to pay for. For others, particularly those with larger workforces or multi-national offices, the per user per month models work out to be quite expensive.
Advice on what to consider
To help you arrive at the decision that is right for your organization, here are a few key things to consider:
- Be clear what is important to you and your business; cost vs. convenience.
- Understand your normal traffic levels, usage and expected growth. We would typically advise adding 30% to the numbers to allow for unexpected spikes.
- Have a clear idea of what services and functionality you need.
- Future-proof your decision by doing the due diligence of the vendor services. Understand the consequences of exceeding capacity levels. Understand the flexibility of changing the service agreements or even cancelling the services. Also consider how you are going to consume telephony services in the next 1-3 years.
- Get transparency of the vendor offering. What is included in the price and what isn’t. Consider the billing intervals, the rollover of minutes and the costs of different types of calls
At Pure IP we offer a ‘pay for what you use/need’ pricing model, as we firmly believe it provides our customers with the best value.
If you want to find out more about how our transparent approach is helping our customers get the right services, while reducing their costs, get in touch with our team of voice experts.