Fonality: The Best of Both (Hosted and Premise-Based) Worlds for Business Telephony

Updated: November 30, 2010

The history of cloud-based and hosted business solutions is filled with collision and compromise with incumbent premise-based alternatives. Thus, for example, Google Apps now offers higher levels of interoperability with Microsoft Office than originally available. And Microsoft and its partners steadfastly adhere to a "software plus services" view of the cloud that combines premise- and cloud-based resources.

A similar divergence bedevils the market for business telephone systems. Traditional premise-based PBXs are well entrenched and provide great telephone service for many businesses. However, adapting these systems to modern technologies and emerging features can be difficult and expensive, and even impossible in some cases. And some manufacturers appear more committed to maintaining proprietary, closed technologies despite the continuing advent of open, standards-compliant alternatives.

Another factor affecting premise-based telephone systems is their manufacturers' reliance upon reseller channels. Superior resellers provide expertise and experience that helps business decision makers to make more effective investments in technologies such as communications systems. However, resellers can sometimes add costs, complexity and delays to the relationship between business buyers and the ultimate solution providers.

Hosted solutions offer many benefits, including low to no capital expenditures required, easier technology upgrades and rapid deployment, expansion or contraction. However, providers of hosted solutions face users who worry about losing telephone service if their data networks fail, or who are contractually bound to service providers that can't or won't connect to hosted offerings. These factors may help to explain why hosted telephone solutions are most popular among SMB and "SOHO" ("small office/home office") users, who are less likely to raise such objections.

The founders of Fonality set out originally to bridge the gaps separating the advantages of premise-based and cloud-based telephone systems. The company offered premise-based systems that were connected to the cloud, from which management and updates are overseen, Fonality executives stated.

Today, Fonality offers a spectrum of offerings with varying balances of premise- and cloud-based features and resources. Pricing begins at $30 per user per month, with free test drives, initial consultations and quotes available via the company Web site.

Fonality Connect delivers all basic features as software as a service, and includes a high-quality Polycom phone for each user. This service is very popular among SMB users because it is delivered as a complete, immediately functional solution and is available month to month with no long-term contract.

Fonality Professional offers less all-in-one packaging and more options that allow decision makers at mid-sized companies to "pull more levers and do more tweaks," stated Fonality. Professional services are also available, as are features such as integration with Salesforce.com deployments. Some of these features are difficult or impossible to do in completely hosted environments, according to Fonality.

Fonality Enterprise is delivered as an extension of the Fonality data center in a box that Fonality provisions and ships and the customer simply plugs in and turns on. This solution supports on-site call processing and options for private networking and local telco connectivity, Fonality said.

On the business side, Fonality sells direct to business buyers, something many PBX providers do not do. Fonality also has more than 100 value-added resellers (VARs) around the world, and Dell resells telephone systems for which Fonality is the original equipment manufacturer (OEM). The simplicity of Fonality's solutions allows Dell order-takers to satisfy customer needs effectively. And Fonality claims that it has no channel conflict. If a VAR discovers a potential customer, that prospect "belongs" to that VAR. if Fonality discovers a prospect, Fonality asks if the business wants or needs in-person support. If so, a VAR is engaged. If not, Fonality sells to the customer directly.

Fonality also offers multiple purchase options, starting with month-to-month, easy-in, easy-out agreements that keep financial risks low. For larger customers and budgets, Fonality offers contracts with better deals for longer terms. The company also works with a leasing company for those willing to make longer-term commitments.

The above features and characteristics are enabling Fonality to do well, especially among SMBs and mid-market customers, according to the company. The company is moving aggressively into international markets and pursuing larger enterprises more assertively as well. The company claims to be winning customers who previously said that they'd looked at other hosted telephony alternatives but decided to wait a year or more.

The company is also developing new features and services based upon an updated, open architecture. Among these is disaster recovery. Premise-based customers are backed up and auto-forwarded to the Fonality data center to create live, instant, cloud-based solutions that users access via softphones from their homes or a back-up call center. Also, the company's HUD unified communications suite is now available as a cloud-based offering to premise-based and cloud-based users. Also, the Fonality UC platform has been revised to support thin clients. This means that users can turn a smartphone or a computing kiosk at a coffeehouse or airport into a fully featured and configured softphone via a browser and an Internet connection.

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