Is Vonage Right for Your Small Business? Everything You Need to Know

By: on March 21, 2016

Vonage is a popular option for businesses looking to move their phone systems to the cloud. Users get more than just a phone system replacement with Vonage, as the vendor’s solutions offer a number of unified communications (UC) features.

Vonage’s solutions excel in their flexible pricing options. Vonage offers à la carte licensing and pay-as-you-go billing. Moreover, businesses can mix and match metered and unlimited plans for different extensions.

Vonage’s flexible pricing makes it an ideal choice for smaller organizations looking for a cost-effective alternative to on-premise phone systems. It’s also ideal for organizations looking to dip their toes in the deep waters of unified communications without committing to the steep price tags of many enterprise systems.

We’ll take a look at the many ways Vonage offers value for small businesses that want to cut costs and expand communications capabilities. We’ll also consider some of the potential limitations of Vonage’s services.

Here’s what we’ll cover:

System Overview
Per-Extension Pricing Offers Flexibility for Small Businesses
Other Pricing Considerations
Standard Features and Add-ons for Vonage
Vonage Integrates With Major Third-Party Platforms
Potential Limitations
What Do Users Think?
Recognition and Market Share

System Overview

Many on-premise UC systems are still too expensive and complex for the small business market. But Vonage’s cloud-based offerings cater to the needs and budgets of smaller organizations (with up to 1,000 employees).

Vonage’s cloud solutions are offered in three tiers with different pricing and features:

  • A small-business version
  • An enterprise version
  • A contact center solution for dedicated support and sales teams

While Vonage has recently added customers above 10,000 employees in size through its enterprise offering, its small-business solution remains much more popular. The vendor also provides implementation services and support both directly and through a network of partners.

Per-Extension Pricing Offers Flexibility for Small Businesses

One reason Vonage is particularly affordable for smaller businesses is the flexibility of its pricing plans. Many vendors price their solutions under a “one-size-fits-all” monthly fee for each user of the system. But Vonage has a number of plans to meet the needs of businesses with very different setups.

For example: You may require an IP phone for every desk at your main office, while you only need to install a single phone for each of your warehouses. Vonage allows you to build a plan that will keep costs low for this kind of arrangement.

Vonage’s services are priced primarily according to the number of extensions you need. An extension isn’t just a single endpoint: Employees can register up to three devices on a single extension, such as an IP phone, a softphone on a laptop, a fax machine or a lobby phone.

Vonage prices extensions in three ways:

  • Unlimited extensions. These are priced according to a flat monthly fee rather than per-minute rates. Unlimited extensions are the most expensive of the three types of lines. They’re best suited to businesses looking for a flat rate to help them keep budgets on track.
  • Virtual extensions. Employees with virtual extensions get a dedicated phone number that works with their personal mobile devices. Calls to this number are forwarded to the employee’s devices, and they can also make mobile calls using this number rather than their personal phone number.Virtual extensions are great for businesses with remote employees or employees who travel frequently. The base fee is also significantly less than than the fee for unlimited extensions.
  • Metered extensions. These are priced according to per-minute rates along with a monthly base fee. This is basically a “pay-as-you-go” plan. It’s a good choice for infrequently used extensions (i.e., ones for interns, seasonal workers, break-room phones etc.).

Other Pricing Considerations

In addition to extension-based fees, you need to consider the following pricing factors when evaluating Vonage:

Hardware costs. Hardware can account for some of the biggest upfront costs in a cloud phone system deployment. However, Vonage’s services are compatible with a wide range of devices, from affordable IP phones to more expensive conference phones. You can use your existing phones if they’re compatible with Vonage, or you can purchase new phones and routers through the vendor’s partnerships with several major IP phone manufacturers.

Businesses can also use Vonage’s proprietary softphone or CounterPath’s X-Lite version of their Bria softphone, both of which are free.

Pay-as-you go billing. Vonage doesn’t require annual contracts. Instead, it operates on a pay-as-you-go model. Monthly fees are due at the beginning of the month, along with one-time fees (such as activation fees for new users) that businesses have rung up over the previous billing period.

Fees for add-ons. Additional monthly and per-minute fees apply for extra features that are not included with the standard 40+ capabilities (more on this next).

Standard Features and Add-ons for Vonage

Vonage’s products include more than 40 capabilities as standard offerings. The following table shows Vonage’s feature coverage, plus some of the capabilities the vendor lacks:

Vonage Capabilities

Offered by Vonage?
Call forwarding
Mobile compatibility
Call reporting
Voicemail to email
Call waiting
Caller ID
Music on hold
Remote administration of phone system
Number portability
Find me/follow me
Disaster recovery
Multiple extensions with multiple numbers per user
Selective call blocking
Free trial
Auto dialer


Overview of extension types and add-ons in Vonage’s admin portal

In addition to the functionality listed above, Vonage offers a number of add-ons.

Add-on features include:

  • Call monitoring
  • Conference bridge
  • Call recording
  • Internet fax
  • Ring groups
  • Call queue
  • Local/geographic number
  • Toll-free numbers
  • Voicemail transcription

These add-on capabilities are priced a few different ways:

  • On a per-extension basis (e.g., call recording and voicemail to email)
  • According to how many the client needs (e.g., toll-free numbers)
  • On a metered basis (meaning per-minute rates are paid when using them, along with monthly fees)

Voicemail settings in Vonage

Finally, Vonage’s enterprise-level package offers more advanced UC functionality than its small business solution, such as extensive conferencing capabilities. Vonage’s conferencing solutions are based on the BroadSoft platform, and include:

    • AudioConnect: A browser-based audio conferencing solution. Vonage also offers an app extending audio conferencing capabilities to mobile devices.
    • VideoConnect: HD videoconferencing supporting up to 100 participants. Works with room-based conferencing equipment, laptops, mobile devices etc.
    • WebConnect: Web conferencing solution for businesses that need to offer webinars. Supports up to 250 participants.

Vonage Integrates With Major Third-Party Platforms

Vonage’s Desktop Client—which allows users to access phone system applications on their desktops or laptops—offers a number of pre-built integrations with important third-party systems.

In particular, Vonage Business Desktop integrates with:

The enterprise version of Vonage also includes an app called CRMConnect, which enables prebuilt and custom integrations with a variety of customer relationship management (CRM) systems. This app is very helpful for contact centers, since it offers screen pops, click-to-dial and other contact center functionality, in addition to custom CRM integrations.

Potential Limitations

While Vonage counts some enterprises among its clients, it doesn’t offer the encyclopedic range of UC features that characterize solutions from enterprise UC specialists like Huawei and ThinkingPhones.

For instance, while Vonage does offer APIs for custom integrations, the APIs focus primarily on CRM integrations and integrations involving the desktop client app. If you’re planning to integrate Vonage with other systems than your CRM or office productivity suites like Google Apps for Work, you’ll need to discuss your plans with Vonage or its channel partners to see whether they’re feasible.

Other enterprise UC vendors offer API libraries that are considerably more rangy than Vonage’s. Vonage may not be the right choice if you’re planning extensive custom integrations.

Vonage also lacks certain unified communications and collaboration (UC&C) features that can be found in enterprise solutions, such as persistent chat rooms.

If you’re looking for a true UC&C solution, you may need to look beyond Vonage.

Similarly, the participant caps on Vonage’s Web conferencing and video conferencing solutions make them inappropriate for vast online meetings or product demos.

What Do Users Think?

The following table gives some opinions from real Vonage users on the strengths and weaknesses of the solution (taken from reviews of Vonage listed on our profile for the system):

Vonage User Reviews

Recognition and Market Share

In Gartner’s most recent Magic Quadrant for Worldwide Unified Communications as a Service (2015), Vonage Business placed among the “Visionaries.”

Frost & Sullivan, another leading IT market research and consulting firm, observes that Vonage has grown rapidly: Before 2013, it was a relatively small player in the business VoIP market; in 2014, it became the fourth-largest business VoIP provider in North America.

Next Steps

We’ve covered many of the factors you need to consider before adding Vonage to your short list. However, you’re probably still wondering if Vonage is right for your business.

Before making a decision, you should evaluate your unified communications and multimedia needs.

Vonage may not be the right choice for enterprise UC deployments, depending on the level of UC functionality that you need. On the other hand, Vonage’s enterprise platform does offer a number of core UC features, and may be a good choice for enterprises without highly sophisticated UC needs.

Once you’re ready to choose a solution, you can:

    • Learn more about how businesses feel about using Vonage by checking out real user reviews.
    • Download our business VoIP pricing guide to get average price ranges for the market, as well as specific pricing for major providers such as Vonage.
    • Speak with an expert to help narrow down your options. Our Software Advisors have helped more than 1,000 businesses find phone systems that fit their needs. Consultations are free, and can help you determine specific price ranges. Just call (855) 998-8505.

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