Some telecom operators buy licenses because they're confident in their chosen vendor and know the Cloud PBX market well. For example, Cisco offers BroadWorks, a calling and collaboration platform that allows telecom operators to start a business on a CapEx basis. This approach has a direct impact on the overall Cloud PBX cost.

Pros

• Long-term savings: While the initial outlay is higher, owning the licenses will lead to lower costs over time because you won't need to pay for recurring billing. This makes sense if you plan to use the platform for many years.‍
• Predictable costs: After the initial investment, the costs for platform maintenance are relatively predictable. With other Cloud PBX pricing models, subscription fees may rise unexpectedly.

Cons

• Technological obsolescence: After purchasing licenses, operators can find their vendor has stopped updating the platform. Such vendors aren't always invested in retaining customers, as the main payment is made upfront.‍
• Less flexibility: If a Cloud PBX provider needs to adjust their system, they will rely on the vendor’s support. However, vendors with licenses often lack the motivation for excellent customer service since they have already been paid in full.
• High initial investment. The upfront cost to purchase and implement infrastructure, hardware, and software is significant. Small OTT companies and telecom operators can’t afford expensive solutions, especially when launching a new service and testing a hypothesis; you can just lose money.

Buying licenses isn't the best option for novice providers. You can pay too much for an outdated solution, making it harder to attract new clients.

You can build your Cloud PBX service from scratch using open-source toolkits like Asterisk or FreeSwitch. This option requires deep technical expertise, as only knowledgeable developers can create a robust Cloud PBX system without a vendor's support.

Pros

• Minimum costs: The most obvious advantage is saving money on vendor support. However, you will still need to invest heavily in your own team of specialists.
• Transparency: Access to the source code allows developers to inspect, analyze, and audit the Cloud PBX software for vulnerabilities, leading to more secure implementations.
• Flexibility: These platforms are highly customizable, allowing providers to modify the code for basic features like call forwarding and ring groups.

Cons

• Hard to scale: Open-source platforms are often only suitable for a small customer base. As a provider grows, maintaining the platform becomes difficult, often requiring a switch to a new carrier-grade solution.
• Inflexible for end users: Open-source based services are rarely intuitive. Simple changes often require engineer requests, increasing the workload on your technical team.
• Advanced features are unavailable: A free Cloud PBX toolkit generally won't support the advanced CRM integrations, call tracking, and other crucial features that businesses demand from a modern Cloud PBX phone system.

A Cloud PBX service based on an open-source platform doesn’t suit small telecom operators. In the beginning, you don’t have deep expertise in this field. Moreover, you can’t build a service with in-demand features with the open-source toolkit because your competitors will use advanced solutions from specialized vendors.

This option is excellent for telecom operators with an extensive subscriber base who partner with an experienced Cloud PBX provider. The operator provides new value to existing clients, while the vendor boosts revenue by promoting its service to a broader audience.

A good example is the partnership between BT Group and RingCentral. British Telecom has a large subscriber base, and RingCentral offers a robust Cloud PBX service. Together, they can reach and retain more customers.

Pros

• Shared experience: You can leverage your partner's brand reputation and experience to promote the quality of your Cloud based PBX service.
• Shared resources and costs: The two companies share development, marketing, and operational costs, making the service launch less expensive for both parties.

Cons

• Difficult to switch vendors: Your service's positioning becomes tightly connected to your partner. Switching vendors means rebuilding your marketing and service from the ground up.
• Customer service challenges: Managing customer support for a co-branded service can be difficult, especially if there are inconsistencies in service levels between the two brands.
• Profit sharing: While costs are shared, so are the profits. If the business succeeds, each partner earns less than they would have alone.

Though a co-branding partnership is better than buying licenses and choosing open-source alternatives, it’s not enough to build a successful Cloud PBX business. You will always depend on your partner’s decisions and won’t be able to switch the platform quickly.

The RevShare approach, often called white label Cloud pbx, allows operators to save money at the start and launch a service entirely under their own brand. The provider and vendor share revenue on a monthly or yearly basis. The vendor handles deployment, financial planning, and marketing strategy, leaving the operator to focus on sales.

This model is one of the best cloud based pbx strategies, especially for small business operators.

Pros

• Professional support: Vendors in a RevShare model are motivated to provide excellent customer service because their revenue depends on your success.
• Minimal investments: This is a great option for testing a new business hypothesis. You can launch the service with minimal upfront cost and share the first revenues later.
• Regular updates: RevShare vendors constantly research and add in-demand features to ensure the Cloud pbx platform remains competitive and valuable.

Cons

• High long-term costs: If you consistently pay a vendor, you might spend more over several years compared to buying a license. However, this is balanced by the value of ongoing updates and support.
• Dependence on a vendor: Delegating many activities to a vendor can make it harder to switch if something goes wrong. Choosing a trusted vendor with successful case studies is essential.

Despite these two disadvantages, the RevShare model is the most appropriate for Cloud PBX providers. Vendors of such solutions are interested in regular updates and supporting clients. Moreover, white labeling is a good option to strengthen an operator’s brand positioning.