State of the Union for SMBs: Scalability and the Cloud

By Digium Content Marketing Team


The State of the Union Address to be delivered by President Obama on Tuesday night is expected to highlight recent economic improvements, such as improved job growth and lower unemployment rates, along with a growing confidence from U.S. consumers, signaling increased spending. It’s also anticipated that the President will call for various changes that could potentially impact businesses of all sizes – and that serves as an important reminder that a business must incorporate flexible solutions in order to scale with the ebb and flow of economic conditions and changing government policies.

Among the proposals thought to be included in the 2015 State of the Union Address are new paid family and medical leave programs, reinvigorated trade programs with Europe and Asia, expanded broadband access to cities and rural communities, and potential tax increases. Depending on what industry your business serves and who your customer base is, these proposals could have varying levels of influence, should they come to fruition. However, most small and mid-sized businesses (SMBs) already understand that change is a constant and you not only need a contingency plan for when things go wrong, but you also should prepare for those times of unexpected or accelerated growth.

Ultimately, the best possible problem to have is the need to “scale up.” This might involve hiring more personnel, buying new equipment, or even expanding different divisions within your company. The need for scalability is one reason that SMBs are (or should be) turning to cloud-based solutions, including for their business phone systems.

Scalability of a business, according to is a “characteristic of a system, model or function that describes its capability to cope and perform under an increased or expanding workload.” Simply put, a business that is scalable has the ability to ramp up production of a product or service without impacting the contribution margin (which equates to revenue minus variable costs). The bottom line? A scalable business is a must in any economy.

Seasonal Businesses:

Scalability is an important need for some businesses because of the way the industry is set up or positioned in the marketplace. Seasonal businesses, from ski lodges to tax accountants, will have some times when greater or lesser phone system support is needed. The flexibility of a cloud phone system helps solve this problem by allowing more lines to be easily added when demand calls for them, and for the number of lines to be reduced in the off-season. Scalability facilitates the ability of businesses to better control their expenses, and ultimately improve their profit margin.

Growth and Decline of Business:

A phone system that is scalable may be essential to seasonal businesses, but any organization can benefit from the flexible nature of cloud phone systems. Whether dealing with growth or a decline in revenues, both can be equally unexpected and require an immediate response. Scalability allows a business to quickly adjust to fluctuating market conditions.

For example, say you have a company of 100 employees that all need a desk phone. You purchase an on premise phone system for the year, which supports those 100 users and supplies you with 100 phones and user licenses. Let’s say you spend $50,000 of upfront cost for this system. Now fast-forward a year from now and your business isn’t doing as well as it was when you purchased this system. You are down to 75 employees, yet you still own 100 phones and user licenses. Basically, you spent $50,000 on a 100-user phone system you are no longer using.

A cloud-based businesCLOUD PHONEs phone system gives you the ability to scale instantly, as your business needs change. For example, if your business has 100 users, then you pay for 100 users. Should your employee count drop to say 75, then you only pay for those 75 users. When your business needs to scale up, then it’s simple to add users and change your billing accordingly. Of course, there is an upfront cost associated with all types of phone systems, but using a cloud based solution means you have flexibility and can free up your working capital through the immediate cost savings of a hosted PBX. Not to mention, with Switchvox Cloud, you can take advantage of the Digium IP phone rental program for additional cost savings and flexibility where the hardware is concerned.

Additional Features

The need for flexibility when your business expands doesn’t just apply to the number of employees (or users) that you may be adding. Cloud-based phone systems also help minimize the headaches that can come with expansion, when adding multiple locations. Whether you have multiple buildings across a campus setting that fall under one internal calling network, or you have several office locations across a certain geographic area, a hosted PBX can provide an economical answer to your communications needs. Not only do you save money by not having multiple phone systems at each physical location, you also have the added convenience of allowing those offices in different locations to call desk-to-desk, as if they were in the same building – and usually for free.

Choosing a cloud-based solution doesn’t mean you have to sacrifice the features and flexibility of a full-scale UC solution. With Switchvox Cloud hosted PBX, you get a contact center, mobility, call control, and collaboration tools included with every user – for the same price. Switchvox Cloud is the hosted phone system solution that delivers the customer experience your business demands at price point you can afford. These features and more make cloud based VoIP an indispensable tool for growing businesses.


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