Business owners rarely consider whether their employees even need physical phones. Software that duplicates most of the functions of a hardware phone is available for numerous software manufacturers and VoIP telecommunication providers. Both hardware phones and softphones offer different pros and cons, though the comparison might be overlooked in favor of simply comparing phones connected to regular old phone company lines with VoIP desktop phones. Read on to learn more about the factors to consider when thinking about VoIP phone options.

The 411 on Softphone Technology

Anyone who has used Google Voice or Skype has some experience using softphones. A software phone runs on a computer, tablet, or laptop just as any other application would. Any softphone provides some of the same communication tools that a hardware phone offers. A softphone works just like a regular telephone and would have an interface that mimics the dial pad on a telephone. Sometimes they have this design element but not always.

Standard softphone features include:

  • Extension dialing
  • Contact directory
  • Call hold and transfer
  • Volume control and mute
  • DTMF (a dial pad for entering conference PINs and passwords)
  • Video calling
  • Caller ID

The lack of a dial pad can be a real disadvantage in some businesses, so decision-makers would do well to consider this when selecting a softphone option. Softphones have additional pluses and minuses that should be weighed against the pluses and minuses of using hardware phones.

Most VoIP desktop phones offer voicemail, directories, holding, mute, call transfer, extensions, and speakers for audio conferences. In other words, they offer features you would expect in a regular old business phone. Higher-end models offer video calling too.

Comparing Performance

Neither option is necessarily the best as several factors play into a decision on what kind of phone system makes business sense. With that in mind, here are the pros and cons of hardware phones and softphones.

Hardware Phones

Hardware pros include higher call quality because the handset helps cut out background noise, and easier conference calling with the built-in loudspeaker whereas a softphone relies on the speaker in a desktop computer or mobile device. A hardware phone typically has more customization options than a softphone. This might be a minor limitation for most businesses, but some of the directory, presence, and other settings possible in hardware phones might be highly desirable.


Softphone pros include better flexibility in terms of scaling up and down easily when business needs change. Users can also be mobile, while employees using regular landlines need a mobile phone if they need to be available via phone during business hours. A softphone system will be faster and cheaper to set up than a hardware phone system too. You simply need to add some users and order a few more headsets for those employees. Headphones and microphones aren’t absolutely necessary but carrying on a conversation might be harder without them.

The main deciding factor in whether to adopt softphones over desktop VoIP phones may be the total cost of ownership. This is an area where the winner might be a little bit surprising.

Cost of Ownership

The cost of buying phones is only one part of the equation. VoIP telephones might cost as little as $50 to $100 each for basic models that are adequate for most businesses. A desktop VoIP phone will be anywhere from $10 to $40 a month depending on features and usage. For example, you may pay more per line if the company makes lots of international calls or long-distance ones.

Further, softphones cost more than VoIP hardware phones to use. This difference might sound trivial because the physical phone costs money, but over a year or so, the VoIP hardware phones might be cheaper to own and use. Monthly charges for softphones range from $5 to 10 a month for basic service to $30 a month or more if you need messaging, video calling, and other functions.

A softphone will also incur some added costs for long-distance and international calling, sometimes. Some VoIP providers offer free calling around the United States and Canada. Hardware phones may incur the same added costs for long-distance and international calling though.

On the plus side, the cost per user for softphones will tend to be lower than the cost of a cheap business phone. To get satisfactory service out of that softphone you may have to supply a microphone and headset, canceling out the savings from not using hardware phones.

Consider the base cost of each service, per month, the features your phone system truly needs, and the amount of long-distance or international calling involved in your business. This is the only way to know if softphones can be a cost-effective alternative to hardware phones.

Softphones and Hardware Phones Have a Place

Softphones and hardware phones have their strengths and weaknesses, but both can be excellent options for a range of businesses depending on what weaknesses or strengths seem particularly important. Hardware VoIP systems may cost more to set up but usually cost less over time, whereas softphones offer greater flexibility. If you would like to learn more about using VoIP phones and associated tools in your business, contact us to set up a brief consultation.