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Top Three Reasons not to use Cloud Telephony or Hosted IVR

While many cloud telephony companies might argue that hosted IVR or Cloud Telephony is the future and everyone should embrace it, but are we actually ready for it ?

Is Cloud Telephony Really Worth ?

Is Cloud Telephony Really Worth ?

I have been thinking about this for many days now. Finally, I thought, I would share my views why it is not an easy decision go for hosted IVR or cloud Telephony. Here are my top three reasons for it:-

1. Data security

With existing Indian Cyber Laws and its implementation ( or lack of it), how can one ensure data security while using a hosted IVR Service or Cloud Telephony Service?
Here is an example to ponder about, if hotel A hosts its incoming IVR with a hosted IVR Service provider XYZ Communications Pvt Ltd. Suppose Hotel A’s incoming IVR has an option to press 1 for reservation, 2 for speaking to a guest and etc.. Now, if the cloud telephony company, XYZ Communications Pvt Ltd, finds out (its easy, just write a small query and run it) all incoming calls to that number whichever had pressed 1 for speaking to reservation and prepare an excel sheet, then give it to Hotel B for say, Rs. 100 per phone number. Now, Hotel B being a competitor to Hotel A, would call up those phone numbers and pitch in for their hotel rooms! May be again using outbound IVR call services by XYZ Communications Pvt Ltd!

The same an be true for your simple outbound campaigns!

So, is cloud Telephony worth the risk f losing your prospective customer to your competitors ?

2. Cost of CTI Hardware and IVR Software

While many hosted IVR or Cloud Telephony provider may argue that cloud telephony is easiest and low cost way of having smart IVR system for a company. But in reality, it may be far from truth!
A typical 30channel Digital CTI card from reputed brand like Sangoma cost Rs. 23000/- ( you do not get a entry level Nikon DSLR at that price! ), and last time when I checked prices of Chinese Made Digital E1 CTI card, it was costing me Rs. 10000/-!

And Asterisk ( the Telephony Software on Linux) is free on Linux! One may argue, Asterisk is not mature technology, can not be scaled up, all I can say is, as far as I know, many of India’s cloud telephony companies use Asterisk or other Linux based Free Scripts for their hosted IVR platform!

If Linux is too intimidating for you, you can buy Donjin boards and use IVR Development tools like Osidial, VBVoice etc. and develop your own voice applications in Windows, just like you develop a Database Application.

So, your total investment for a 30 channel IVR for your company would be less than Rs. 30000 including PC! And a typical IVR hosted at cloud telephony provider for similar 30 channel setup would be Rs. 6000 a month! And you would end up spending Rs. 72000/- a year which you could have achieved by investing just Rs. 30000/-

Do you still want to go for Cloud IVR Service ?

3. Existing Phone Number

Can cloud Telephony provider give you IVR Service on your existing business phone number which you have been promoting in your yearly calender, business cards for years ? No, they can not. They would give you a new number which normally, they would own and rent it out to you. Which means, if the cloud telephony provider go out of business, then your number will also be gone!

Also, none of the cloud telephony service providers in India are large enough to give local phone number all over India. This may change when some telecom operators decides to provide hosted IVR service though.

While I like Cloud Telephony in India, but I still think on premise IVR is useful for many companies. Also, it may be too early to give all rosy pictures about Cloud Telephony in India.

Please share your views!

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{ 22 comments… add one }
  • Vijay Sharma April 30, 2013, 10:31 am

    Hi Utam,

    I would not agree with your thesis completely. Lets look at a scenario of how many companies can afford to specialise in spending time on building on top of asterisk ? A techie , half decent will cost 35k a month to work and + 35k of your mentioned expenses, his cost of saving 35k for the year is gone in getting one techie to work on the platform. 35*11 moths = Rs. 320000 is something which is n additional cost you are missing.

    2. On data security and number portability, for example with us at exotel we have it as part of our tos what can be ported and what can’t , some companies have done transfers and also data wise it is of great importance when building any business your clients data is secure hence as part of our tos we give it in writing.

    The only place I could recommend having in house solutions and people working on asterisk and doing it in house is when it is your core competency ,else why waste time on this? Time is money nowadays. Would you not agree ?


    • Kashinath May 27, 2017, 1:17 am

      Dear Exotel,

      I am your customer from past two years and now I think this guy is right.
      1. I blindly moved to cloud telephony without thinking twice but now you doubled the fees within two years.
      2. number porting: I took number you own and kind of locked… now shifting to new number means I will miss many customers…
      3. customer support is pathetic… it used to be good in the beginning, now I am followingup with you from past one month to get this fees issue solved.

      hope others take wise decision.


  • Uttam Pegu April 30, 2013, 10:53 am

    Hi Vijay,
    Thank you for your well thought out points.

    I have seen some engineering student developing IVR apps using a four port Analog Sangoma card and Asterisk in couple of hours! So, I would say, there would be many free lancers who would do a Asterisk based IVR with a fixed call flow for affordable one time cost! Well, I am also available for such work where I might build complete Asterisk Based Outbound IVR for cost of a Canon EF 400mm F5.6 lens!

    As for umber portability, I will quote which I already posted in Linkedin “India has 22 telecom circles and inter circle call forwarding is not allowed. So, if hosted IVR provider happens to be based in Delhi, Bangalore client for that IVR service provider has no option but to take a Delhi number! There is of course a solution to it ( eg by taking up a toll free number), but with some recurring cost. “

  • Chaitanya May 6, 2013, 1:24 pm

    Hi Uttam,
    As I am with a cloud telephony company, obviously, I would not completely agree with you 🙂

    That said, let me share my viewpoints. The reasons you have raised are valid for all cloud based systems. Not just cloud “telephony” systems. For example, if you look at CRMs, the cloud CRMs have a lot more data threat as you are storing the complete details on the cloud and can easily be shared with competitors. Similarly, it might be cheaper for a company to just download Sugar CRM or vTiger or something else and manage it themselves instead of going with Salesforce or Zoho. Similarly, if they go out of business, then all your contacts are lost.

    1. So, as long as people believe in the cloud, then can also trust cloud telephony 🙂 It is really not in the best interests of any company to play around with user data.

    2. As far as cost is concerned, Vijay has mentioned some valid points. On premise solutions could sometimes be cheaper. But when doing the comparison, we have to take into account the server cost, UPS cost(power is a big problem in India), development cost, card cost etc. So based on a cost analysis people may choose to go with a premise based solution.

    3. Regarding phone numbers. As you rightly pointed out, there is no cloud company which covers the whole of India. We have covered most of the major business destinations with more coming soon. Our reach can be found at http://kookoo.in/kookoo_spread.html. But your point is well taken. If your business is in a place not covered by our reach, you will have to choose a different number. Also, we are very particular in education users about number ownership and most of our customers own their own numbers. This leaves them free to shift if they don’t like our services.

  • Uttam Pegu May 6, 2013, 5:40 pm

    Thanks Chaitanya for the nice explanation of your points.

  • Rajesh Bharghav May 22, 2013, 1:37 pm

    I use Knowlarity’s products for my business and they have given me local number in even remote towns of MP and Assam. I think their numbers are available pan-India and even international. I am very happy with cloud telephony service and works very well for me at low cost also.

    Rajesh Bhargav

    • c p goyal July 28, 2013, 4:12 pm

      Mr. Rajesh Bhargav,

      I agree with you, I am also using the service of Knolarity, which is also very useful for me.

      • devesh January 11, 2015, 2:14 pm

        Knowlarity is way ahead of all cloud telephony companies in india. And gives best service to its clients.

        outsourcing is best option rather then putting lot of brains to manage calls.its better people should concentrate on there own business to grow and let knowlarity take care of there call management thing.

  • jyotiranjan January 8, 2015, 10:06 am

    Dear uttam ,

    I want to design an ivr for my small institute , can you pls help me ?

  • Rajat March 14, 2015, 5:14 pm

    I have been using Knolarity and the experience not really pleasant, biggest problem they have is they change prices when ever they want and then your relation ship manager says take it or leave it. let me give you an example
    they had a plan called soho which was for rs 1000 / month in with 1 channel, 2000 coins (call value) and calls can be transferred to any no operators , on Renewal i was told prices has changed the same plan for Rs 1000/ month has 1 channel and call can be forwarded to only 1 user and coins will be just 800, technically they have increased 60% prices and and have made the system useless by just forwarding calls to one user.
    why should one pay rs 1000 rental and then pay incoming after 800 coins just to forward calls ???

    this is not just ounce they have been doing this kind of drama every time. Is their any other provider who has better service and is atleast honest and want to focus on retaining customers than minting money, or shall i just take help of Uttam Pegu and build my own system, i have more than 20 accounts

    • Uttam Pegu March 23, 2015, 6:03 am

      Hi Rajat,
      Thanks for sharing your thought. Most probably, if you have 20 accounts, its time for going on-premise!

      Also, I would recommend you to check this list ( http://www.cloudtelephonyblog.com/2014/cloud-telephony-companies/cloud-telephony-companies-in-india/ ) for other hosted IVR providers in India. While every one of them their own strengths and weaknesses, given a choice, I would have opted for OzoneTel at this time, as they have built infrastructure in Mumbai too.

    • Santosh Rai April 1, 2015, 6:39 pm

      Am Also Fed Up From Knowlarity
      Same Price Problems
      Last Year I Bought This Service @ Rs.6000.(Got-24000 Coins)
      But On Renewal They Are Asking For Rs.12000.(Now-9600 Coins)
      Service Is Useless- Sometimes Its not Working For 15 Days.

    • Kashinath May 27, 2017, 1:21 am

      Exactly..it is the same problem with Exotel. they doubled the price on renewal… disaster it is…

  • Nilesh Chhajed March 22, 2015, 10:26 am

    Knowlarity is one such company where this phrase goes well, “Naam bade aur darshan chote”. I have tried banging my head for 4 months to get a simple parallel call forwarding to multiple numbers on the same extension number and they havent been able to do it. That apart there are a number of such issues which has blocked the deployment in my company. I am now looking out for alternative. Hopefully this time its a better experience.


  • Suraj Tiwari May 17, 2015, 4:22 am

    I was in talks with knowlarity for cloud telephony.. i have a 50 seater center in Pune want to get Ivr on outbound sales calls where if customer presses 1 the call sould land on our did number can this be done by you ????

  • Raj June 9, 2015, 4:03 pm

    You can try Virtual receptionist of Zeotel.com

  • Sunil June 25, 2015, 4:13 pm

    Dear All,

    C-Zentrix is the best provider in call center market in INDIA but they are not on cloud.

    Let’s see if they come on cloud how things will shape up. Hopefully a lot of cloud experience will be better.

    But its difficult to satisfy all the customers, there is always some % of happy/not happy customers.

    But Uttam is right in some sense that after a stage you should go on premise


  • raj June 27, 2015, 3:13 pm

    Dear Uttamji, .
    I am reading a lot on cloud telephony business n how it saves cost. I am interested in having franchisee business.Is there any company
    offering such franchisee?Is it worth taking risks?

  • Ashutosh Kumar November 6, 2016, 3:12 am

    Dear all

    I need your suggestions in this regard.
    I have purchased a toll-free nunber from Tocaso International (A Delhi based company) last 3 months ago, but my toll-free number for my grocery business 18002707040 (the only medium to get business for me) which i got from Tocaso is switched off from last 19th Oct. Now, i am facing a huge negative response from my market people and in such a scenario no any updates and support from Tocaso. Even they have probably changed their mobile nunbers. I am in trouble with this.

    Please suggest me that how can i overcome with this situation and get the same toll-free number and what should i do with Tocaso International (Mr. Satnam Singh is the person who takes care of their business and his number is 9999112333.

    Looking for your valuable suggestions.

    Ashutosh Kumar

    • Uttam Pegu November 6, 2016, 3:21 am

      Really sad to hear about your story about Cloud telephony. Due to insane pricing and other reasons, Cloud Telephony in India seems to be in really bad shape where similar stories are now in abundance.

      My suggestion would be to get the toll free in your name and get it forwarded to your mobile number or any number which will be picked by person responsible. If the toll free number was not in your name, then most probably, you should forget about that number and go for new toll free number.

      My suggestion is to never take any number, toll free or otherwise, from any of the cloud service providers in India. Then get these number to forward to some DID number of cloud telephony provider.

      In case you need to set up your own IVR on premise, I can help you.

  • Jitendra Kumar November 24, 2016, 4:46 am

    Hello Sir I would like to start our cloud telephony company please suggest who support or help us for like hardware and software. Now these days we are providing internet services to our broadband customers, so we have our small data center with 1 gigabit internet bandwidth and power backup

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