14 May 2022
With a few quick searches, you can get some idea of the typical pricing of a cloud phone system. Determining the pricing of a Unified Communications system is a little more difficult. The price isn't the true total cost either. If you’re trying to gain a better understanding of the cost of Unified Communications, you might be struggling with where to even start. There’s so many providers, so many offers, and sometimes it is difficult to just ascertain a fair price.
Framework has consulted companies on Unified Communications for over a decade. We’ve worked with many providers in that time and gained an excellent understanding of the market. We'll help you understand the various costs, and the cost expectations based on your needs.
Before getting into specific costs, we'll quickly highlight the major cost factors. These all contribute to the total cost of a unified communications solution.
Cloud-based unified communications systems are sold as a subscription by the vendor. On-premise solutions are sold as a one-time expense but do have some ongoing expenses.
Cloud unified communications subscriptions may not include everything. You may pay extra fees for features or integrations. On-premise systems always involve add-on expenses for features or integrations. The base solution usually omits many features, but you can spend to get more.
You don't have to buy phones for an on-premise or cloud unified communications system. Many people choose to for convenience and continuity of experience. Phones may not be the only equipment cost. You may also need networking equipment. Unified communications systems are almost always VoIP, which requires a high-performance network.
Since Unified Communications often uses VoIP, your bandwidth is important. To have a good experience, you'll need a quality service with low network latency, packet loss, and jitter. You'll need bandwidth to cover the vendor's recommendations while accommodating other data needs.
Implementation costs may include labor or other vendor fees besides equipment. Your team will also need to get involved in the implementation to make it successful. Also, your team will need training to adopt and get value from the system. Your team's time has a cost and some vendors mitigate that better than others.
Most people associate management cost with ongoing support fees from vendors. Vendors may charge a monthly management fee or support may be billed ad-hoc. It may be included in a cloud service. Those are not the only management costs. There's also the cost of your employees' time. They'll have some involvement in system management.
52% of cloud unified communications subscriptions cost less than $75 per user (per month), according to a Software Advice survey. 13% are between $76 and $100. 36% of survey respondents paid $101 - $500 per user. Vendors have different approaches to pricing. They may not charge a per-user fee or the user fee may not be this high. But you can still expect an average total cost per user in this range.
You can stay under $75 if you need basic unified communications features, like mobility, messaging, conferencing, etc... If you need advanced features, like an IVR or software integration, you'll likely pay above $75 per user. Another factor impacting the subscription cost is usage. Unified Communications is often sold with unlimited minutes. These packages have a higher per-user cost than those sold with a package with minute limitations. Unlimited minute packages usually add $10-$20 per user.
Subscriptions are not as significant for on-premise unified communications. Your only 'subscription' cost is typically for a maintenance or support plan. Though less common, there may also be subscription licensing charges. The support or maintenance price will vary by vendor and depend on what they're covering. Based on my experience, you can use the following heuristic to estimate support cost. For every $15,000 of system cost, you can expect $75 - $150 per month for support. On a $45,000 system, the vendor will likely charge $225 - $450 per month for maintenance.
What qualifies as an add-on to your subscription charge is up to each vendor and some are very inclusive. Here is a breakdown of some common add-on fees and the associated costs.
It's hard to pin down what's an add-on and the expected charges. The add-on charges are usually for intermediate or advanced features. You may not need any of those features so this may not impact you. You may need advanced features, and your add-on subscription fees may be as much as your base per-user price. I believe it's fair to estimate add-on charges will be $0-$50 per user for most organizations.
Equipment cost for cloud unified communications systems is low relative to on-premise systems. The only phone system equipment needed are the phones. You can avoid upfront expenses for phones by renting (for a higher subscription) or using softphones. If you buy your phones, pricing is $100 - $300 per phone, depending on screen size and capability. Most of our clients buy $110 - $160 phones for office users. Conference phones are typically $300 - $1,000 depending on the quality and brand.
On-premise systems have higher equipment costs. Besides the phones, you're buying the equipment that runs the system. The average one-time equipment cost of an onsite unified communications system is $201 - $750 per user. 56% of companies report a cost in that range, according to Softwareadvice.com.
You may also need to upgrade your network for unified communications. Low network latency, packet loss, and jitter are critical for your voice experience. You may want to install PoE switches to avoid using AC power outlets for phones. You may need to replace a firewall or switches for better VoIP management. Potential network upgrade costs are unique to each client's network. Firewalls can range from $1,000 for small businesses to $50,000+ for enterprises. Switches can range from $500 for small offices to $5,000 each for enterprises.
You may also want to replace network cabling. VoIP requires Cat5e or Cat6 cable. If your phones use Cat3 today, your computer and phone can share a cable. Many people prefer to keep them separate, so you may want to replace cabling. Cabling is entirely space and network dependent. Cabling generally ranges between $150 and $1,000 per cable run, based on length and difficulty.
For the best call quality, VoIP needs 90 kbps to 160 kbps (kilobits per second) per call. Broadband internet is usually your only way to meet this need. If you don't have broadband, you'll need to upgrade your internet. Internet pricing varies according to location and type of service. Broadband pricing ranges from $50 - $1,500 per month. Cable internet will be on the lower end of that range and fiber will be on the higher end of the range.
Speed is not the only concern with bandwidth for VoIP. You also need low latency, packet loss, and jitter. You may be able to meet these standards with low-cost broadband. You may not be able to get away with a low-cost internet though. You may need fiber or another reliable internet service to get this quality. Internet services with guarantees on these metrics range between $200-$1,500 per month.
Implementation cost for unified communications varies based on vendor and solution. Cloud unified communications systems often have no implementation fees for setup and training. Vendors normally cover this to lower the barrier of entry. If you're looking for a white-glove experience, you may pay some implementation fees. Generally, these range from $1,000 to $10,000 for under 100 user systems. The fee would depend on the vendor’s scope of work and the amount of training needed.
On-premise unified communications systems have higher implementation charges than cloud solutions. Cloud vendors don't make their money on implementations. They want the recurring fees and can subsidize your transition. On-premise vendors make most of their money on implementation. They need it to be profitable and charge more as a result. It's not unusual for the implementation to be 1/3 of the total system cost. On-premise vendors usually charge $125 - $250 per hour for implementation labor. You can expect about 1.5-3 hours per user on average. On-premise implementations range from $5,000 - $40,000 for systems under 100 users. It can go up from there based on size, complexity, features, etc...
Cloud unified communications vendors usually include management into their per-user pricing. That is not always the case, as some charge separately for support. Even if they include support, there may be limitations to what's covered. If you must pay for non-covered support, you can expect it to cost $100 - $150 per hour.
On-premise unified communications vendors always charge for support or maintenance agreements. It varies by vendor and what's covered, but for every $15,000 of system cost, you can expect $75 - $150 per month for support.
Your time is also part of the cost of managing unified communications systems. It may be inconsequential if the system is user-friendly and well supported. You may spend a lot of time. Especially if you handle more yourself, have limited support, or the system is not easy to use. You know what your team’s time is worth, so I'll let you determine how to value this cost. Don't ignore it though, as it's a real cost and the solution you choose has an impact!
I hope this content was helpful. We’ve defined the major cost components, what costs to expect, and what can impact the costs. If you’d like to learn more about the capabilities and benefits of unified communications, Framework can share it’s decade plus of knowledge and experience of this market. Here are some additional resources on our website about unified communications!
Are you interested in getting pricing information for Unified Communications solution for your company? We’ve been providing unified communications over a decade, offer several solutions, and are happy to help. You can learn more about our pricing here or contact us!