Our Rant on Numerous VoIP/SIP Providers

Before the wonderful world of VoIP and SIP, a startup phone company would need 10s of millions of dollars to build out a network. Fully diverse and redundant fiber networks would need to be built out. Heavy duty gear, like Nortel DMS switches, would need to be bought, provisioned, and backed up. The collocation space at each telco PoP needed to house the equipment would rival Paris Hilton’s closet. Thanks to the wonderful world of the internet, that has all changed.

Don’t take this rant the wrong way. The internet may end up being the most important invention ever. And we unequivocally support startups and small business as they are important drivers of the American and global economies. With this said, there is an amazing preponderance of small VoIP/SIP providers springing up on every corner. The financial backing needed to start a VoIP company now is 10s of thousands of dollars(maybe less?) instead of 10s of millions. With a stable internet connection, a small size of SIP trunks bought at a wholesale level from a carrier like Level 3, some FCC licenses, some space in their grandmother’s basement shelving to host the equipment, and a part time tech who daylights as an IT intern, you can start a VoIP company too!

We find that these small VoIP providers can even have a feature set that rival larger carriers like 8×8, Megapath, Windstream, and others. Their flexibility can be impressive based on the lack of standardization and the sheer lack of size for approving 1-off type scenarios. Pricing can also be quite attractive based on the lack of overhead and network costs. That is where the benefits generally end though.

It’s our view that there is a risk in using these smaller VoIP carriers based on the following factors –

1. Lack of network diversity. Where is this company’s equipment? Does this company have a presence in multiple tier 3+ data centers? Hurricanes in Tampa, Miami, and even New York City(Hurricane Sandy) have taken VoIP providers completely offline. (On a separate note – do you know that one of Obamacare’s “glitches” was a Terramark(subsidiary of Verizon) data center that had an outage? Always back-up put mission critical applications to multiple locations!)
2. Lack of a 24x7x4 fully staffed NOC(network operations center). We’re finding that many of these smaller carriers either have no after hours support or support consists of a single tech who may be in the middle of a good night’s sleep when he gets your ticket.
3. The VoIP provider’s equipment is refurbished and isn’t covered by strict Smartnet like coverage. There is a higher chance of suffering through extended outages because of this.
4. Lack of tech knowledge at the NOC can make support difficult. What if the one or 2 techs that a VoIP provider employs has no experience in trouble shooting your Asterisk based PBX?

In conclusion, we are telling our customers to use caution in selecting these small providers based on the feedback and knowledge we’ve ascertained on this topic. The risks of doing business with these providers oftentimes outweigh the attributes of lower price and flexibility. It may make more sense to use these VoIP providers as a backup to another primary voice carrier.

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