Negotiate the Best Possible VoIP Contract

Updated: April 30, 2009

According to MarketResearch.com, 50 percent of global telecom traffic is now handled over IP — a figure that is expected to increase to 75 percent over the next few years. What's more, at least seven out of ten respondents expect VoIP to be "important" or "extremely important" to their organizations by late 2008.

It's no surprise that VoIP vendors are responding to this continued high demand with countless offerings, from on-premise packages to hosted services . And it's precisely this steep competition that has created plenty of wiggle room for companies to negotiate the best VoIP contracts possible. Long gone are the days of fixed prices and non-negotiable variables. These days, it doesn't hurt to ask for the odd price break or value-add functionality. Here are a few areas of leverage worth considering:

On-Premise Perks

VoIP hardware is a perfect spot for savings, said Jayanth Angl, an analyst with Info-Tech Research Group. "There's often an opportunity for vendors to bundle other network equipment, including switches and routers. Although they're often required to support a solution, they can also be bundled in with a VAR (value-added reseller) or systems integrator," he said. What's more, noted Angl, discounts tend to be higher if a company opts to purchase all of its VoIP equipment from a single vendor.

Double Up

One strategy to take with hosted or hybrid solutions is to ask for a step up in functionality at a cut rate. You can't expect a vendor to give you a premium solution like a call-center solution as a freebie for your business, but you should be able to get that kind of an extra at a discount if you are signing up for more than one kind of service at once.

Class Acts

Whether on- or off-site, VoIP training offers plenty of benefits, from familiarizing IT personnel with the latest protocols for seamless deployment and maintenance of a VoIP network to bridging gaps of knowledge that exist among varying departments. But companies need not fork over tens of thousands of dollars to bring their employees up to speed on the latest VoIP technology. "One strategy that we've seen have considerable success is incorporating IT and telecom staff training as part of your VoIP arrangement, either informally or as a formal contract revision," said Angl. Even better, obtaining training directly from a VoIP provider is often of greater value than turning to a third-party provider.

Long-Term Commitment

By now, most of us have been urged by some over-zealous cell-phone carrier to sign a 100-year-long contract in exchange for free ringtones. But companies willing to make a long-term commitment to a VoIP provider — in exchange for added features and services — shouldn't fear getting duped. "If there's been a good relationship with the vendor and the service has been up to par, that's usually a good indicator to stay with that vendor." Especially if sticking around means discounts on hardware and services.

Size Matters

Be sure to consider a vendor's size and industry position when negotiating a deal. Said Angl, "In larger organizations, especially where there's an existing relationship with a large solution provider like a Cisco [Systems Inc.] or Avaya [Inc.] , there's often an opportunity for deeper discounting." On the flip side, today's small businesses can encounter difficulties when it comes to requesting price breaks and better service. After all, vendors aren't exactly eager to slash costs if there isn't any big-dollar deal potential. That's why small businesses in the market for a VoIP solution would be wise to convince vendors that although their current needs are meager, there's room for growth and network expansion down the road.

Not on the Table

While every contract should be worked out on a case-by-case basis, there are some variables that simply shouldn't factor into a negotiation. Network security , for example, should be an expected service. Similarly, a company should never be willing to sacrifice uptime percentages, service availability and customer support — even if it means passing up a so-called deal of the century. It's just not worth the risk.

Featured Research
  • Your Phone System and Your Bottom Line

    Businesses have been using phones to drive increases to their bottom lines for almost a century now. Telephony, much like the rest of the business world, has seen drastic changes with the increase in technological advancement. Voice Over Internet Protocol (VoIP), has enabled companies to connect with consumers at levels that have been seen as unheard of before. And trust us when we say this, it is doing wonders for the bottom line. more

  • 2017 Phone Systems Checklist

    As you are well aware, we are living in an age of extreme technological growth. With this, an understatement might be that phone systems have changed a bit over the last decade. If you are in the market for a new phone system, it is absolutely essential for you to have knowledge of this vast sector and just what exactly you need in order to have your business succeed. more

  • VoIP vs. VoPI

    Are you searching around for an upgrade to your current phone system? If so, you've mostly likely heard of VoIP, but do you know about VoPI? Lately, there has been a lot of conversation around what the difference is between the two systems. Most of this conversation centers around security, as both of these systems, operate over the internet versus the traditional phone lines. more

  • Why You Need Mobile VoIP

    Mobile VoIP is growing at an exponential rate and can help your company reduce costs, improve communications, and drive increased employee satisfaction and loyalty. If what was just mentioned above sounds like it would be good for your business (it is), download our latest guide Why You Need Mobile VoIP to learn even more reasons why you need to make the switch today! more

  • How You Can Stop VoIP Eavesdropping

    In today’s modern technological world we face cyber threats on an almost daily basis. This rings true when switching phone systems to VoIP. While there are many benefits to making the switch, there MUST be precautions taken to ensure that your new phone system is safe and secure. more