Grasshopper Vs Vonage – in-Depth Comparison

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Grasshopper and Vonage Business Solutions are virtual telephone systems that target the small business sector though they have very different architectures.

vonage_vs_grasshopper

 

At the lower end of the SMB virtual telephone market two big names in the business, Grasshopper and Vonage Business Solutions are duking it out for the entrepreneur and home office small office (SoHo) business. Both are well established virtual telephone system providers with large customer bases that target the small business and mobile worker sector even though they have very different architectures.

 

Traditional Business Model

Like we have said both these businesses have very different business models. For example, Vonage is famous for its residential VoIP international telephone service predominantly in the US and Canada, which provides residential customers with discounted local, regional and national call minutes to both landlines and mobile phones. However, Vonage is also a massive international VoIP service provider and they have deals with other smaller providers in the US and hence they have built up strong contracts with other international partners in order to get low prices on bulk purchase of international call minutes. This very favorable pricing model has stood them well over the last couple of decades as US residential and Home businesses shifted from traditional landlines to VoIP. Therefore, because of this strong background as a VoIP service provider it is no surprise to discover that Vonage’s virtual telephone service is also based on VoIP and a hosted cloud model.

 

A Change of Heart

However things have changed over the last few years and Vonage has moved away from their traditional residential/SoHo business model and their initial goal appeared to be to introduce a service offering that was to target their product at the Small Medium Business market and specifically at the myriad of new company startups. The idea appeared to be to provide an additional product alongside the residential/SoHo service but with the standard features of a business scale IP/PBX at an affordable price that would be attractive to the cash strapped startup. They fulfilled this through providing a feature-rich – over forty features – product on one streamlined cloud based solution.

 

Grasshopper goes a different route

Grasshopper, on the other hand, is also a new entry into the virtual telephone marketplace and they also strive to provide virtual telephone services to that same market space, namely the entrepreneur and startup. However, that is where the similarities end as Grasshopper has a completely different approach to the business and the architecture and technology on which it builds its service. For example, Grasshopper takes the unique approach in the marketplace to build their service as an overlay on the traditional PSTN network. This is not quite as novel as you might think but it certainly is unfashionable in today’s VoIP drenched market.

Despite building their virtual telephone service as an overlay upon the traditional telephone network and being somewhat restricted to the underlying technologies, Grasshopper has found the approach to be quite advantageous in some respects. For instance, Grasshopper can rely on – at least for the present – the high availability and robustness of the national telephone network with its 99.999% reliability. Grasshopper’s customers don’t have to concern themselves with the frailties and vagaries of the internet. Similarly, Grasshopper customer’s don’t need to concern themselves with call quality or lack of service, such as dropped calls or robotic voice quality as they are using the same high standard voice infrastructure as the national telephone network. For Grasshopper, this is ideal for their ideal market are the entrepreneurs, home workers and mobile business people who tend to use their own mobile phones or home telephones. Therefore, Grasshopper strives to provide a solution to the problems of using personal devices for both work and pleasure whilst on the go.

 

How they work

Vonage

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Vonage Business Solutions uses the common VoIP cloud based model of a virtual IP/PBX. The customer is given a choice of two business numbers that are either local, toll-free, or even a vanity number. Should the client already have their existing business number then Vonage will port their existing number over so that they can continue to use this as their Vonage main business number. The business numbers are important in virtual telephone systems as they are the number that the business will distribute on their advertising collateral as the main point of contact.

Previously, Vonage had extended their residential style philosophy into their small business model and service plans and pricing were dependent on extensions and minutes. Now that works great for very small businesses such as entrepreneurs and SoHo but recently Vonage have changed their tack and now seem to be targeting larger SMB customers and even going so far as to start wooing the small medium enterprises (SME). Consequently Vonage has dropped their old three tier service plans of Metered (Pay as you go), Unlimited, and their Virtual telephone extensions in favor of a two tier service plan, Vonage Essentials and Vonage Premier.

 

Vonage Essentials

All business plans must contain at least one unlimited extension this is because only unlimited extensions can have the external business, – local, toll free, or vanity – number assigned to it. Therefore the minimum price for Vonage Essentials is $39.99 per month for one extension.The term unlimited also describes the call plan as there are unlimited minutes assigned to this type of extension for a fixed monthly price. These are minutes inclusive of the monthly fee, so long as they are within continental USA and Canada. International calls out with this region are charged at Vonage’s standard international rates per country, which can be up to 75% cheaper than standard rates. At the time of writing (May 2017), the monthly fee for an unlimited extension is $39.99 per extension per month for 1 to 5 users. This might seem a lot, however you have to remember that there are over 40 business class features such as voice conferencing, Amazon chime and video support thrown into the mix so it is no longer simply a telephone service. The other distinctive features of a Vonage Essential extension are that it can support porting of an existing business number from another service provider, as well as support up to three devices, such as a mobile phone, a desk phone or a home landline. This also means that you can use the free mobile or softphone app without having to pay for additional metered extensions as you previously had to with Vonage and that is a welcomed step forward.

 

 

Grasshopper

grasshopper_logo_light

Grasshopper takes a different approach to delivering a virtual telephone service for small businesses that operate primarily from their mobile devices or home telephones. The way Grasshopper’s service works is similar to Vonage virtual extensions in so much as it is a call forwarding service. However, there is a key difference in that Grasshopper works also as an auto-attendant and receptionist by answering the call, greeting the caller and offering them a choice of options via an IVR menu. Vonage virtual extensions in contrast only redirect the call to the employee’s device.

The key difference between Vonage and Grasshopper is that Grasshopper works as an inbound call answering service and redirects calls via a menu to preconfigured employee devices. This means that employees can use their own mobiles and home landlines without having to give out their personal phone numbers. This can be a very effective service for businesses where employees are often away from the office, or perhaps the business has no fixed premises. In this case, Grasshopper provides a local, toll-free business number, a call answering and greeting service that will provide a professional image to customers.

Grasshopper also has unlimited extensions so you can build out your telephone network as the company grows. However, it should be noted that Grasshopper is primarily an incoming service there is no outgoing functionality. Grasshopper does not provide a dial tone, so you do need another telephone service whether that is a landline or mobile service provider. Consequently, you cannot make emergency or directory service calls using Grasshopper. However saying that there is a mobile app which will allow you to make outgoing calls – billed by your mobile operator – that will show the business number as the caller ID, though there is no similar solution for a landline.

 

Grasshopper Vs Vonage Features

Vonage really wins hands-down here as it has over forty IP/PBX business features that Grasshoppers PSTN architecture cannot possibly match. However, Grasshopper has all the essentials such as; custom call greeting, call forwarding, music on hold, unlimited extensions, conference calling, unlimited call answering, voicemail and fax to email. Additionally there is a mobile app, fax on demand and call routing extensions.

Vonage though has large business class IP/PBX features for call handling, collaboration and integration with other business applications. One of its strong points is its application integration with  Outlook, SugarCRM, Salesforce, Quickbooks, Microsoft Dynamics and Method CRM. Furthermore, Vonage can handle call queues, group paging, as well as intelligent call routing which are prerequisites for a contact center as are the dashboard features, which permits real time analytics of each extension. Vonage therefore provides functionality way beyond Grasshopper’s however, whether you require these features are another matter, it all depends on how you wish to use the virtual telephone services for your company.

 

Price Plans

Grasshopper comes with a choice of four price plans:

  • Pay As You Grow – $12/month (no minutes)
  • Ramp – $24/month (500 minutes)
  • Grow – $49/month (2,000 minutes)
  • Max – $199/month (10,000 minutes)

plans

 

Vonage:

  • 1 to 5 Extensions   – $39.99 per month
  • 6 – 9 Extensions – $29.99 per month
  • 1020 Extensions –   $24.99 per month
  • 21+ Extensions – $19.99 per month

 

Bottom Line

grasshopper-vonageBoth Vonage and Grasshopper target their products at the startup business but they go about it in very different ways. Grasshopper utilizes an overlay on the tradition PSTN network, which provides for excellent call quality, reliability and ease of use. The drawback is the Grasshopper is reliant on features inherent to the POTS (plain old telephone system) so it cannot compare to Vonage’s IP/PBX array of features. Vonage therefore has not just the features and functions you require as a startup but all those you will need as your company grows. Grasshopper is ideal for entrepreneurs and those on the move that operate from their mobile phones but is not suitable for office based employees. Vonage on the other hand has the capability to handle office based and mobile teleworkers and can even scale to support small contact centers.

 

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Alasdair Gilchrist

Alasdair is a technical writer with interest in business practice, operational strategy, start up philosophy and affordable technology. He lives in Nonthaburi, Thailand with his wife and daughter, and writes terrible novels as a hobby.

3 Comments
  1. Reply
    R Bontemps March 14, 2017 at 3:56 pm

    Given this article is now 2 years + old does the author still reach the same conclusions in March of 2017?

    • Reply
      Admin May 9, 2017 at 9:18 am

      Hi, the article was just updated.

  2. Reply
    David Kearns September 6, 2017 at 12:30 am

    Based on the conversation I had with Vonage it is no longer true that “The key difference between Vonage and Grasshopper is that Grasshopper works as an inbound call answering service and redirects calls via a menu to preconfigured employee devices. This means that employees can use their own mobiles and home landlines without having to give out their personal phone numbers. This can be a very effective service for businesses where employees are often away from the office, or perhaps the business has no fixed premises.”

    Vonage seems to be able to provide the same.

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