vonage vs ooma

$50 off Ooma!! Click HERE or use code VEF3711 Ends 7/31/12
[EDIT: . I have 3 single use codes for Ooma that will save you $50 that must be redeemed by November 15, 2011 - email me if you want one. These are first come first serve]

[EDIT 6-13-10: Since posting this I have purchased an Ooma Hub (the Telo requires premium service for many features that are included with the "free" version of service provided by the Hub. Also Ooma has initiated an annual fee for taxes and fees of about $12 per year since I published this post]

There are many VoIP providers available, I am going to provide a comparison of two of the most popular ones...
Vonage is a SIP provider that offers unlimited calling to 60 countries for $25 per month
Ooma is a VoIP provider that uses proprietary hardware and a P2P network to complete calls, and charges $250 up front for "lifetime" service [EDIT - Ooma no longer uses P2P to terminate calls]

Vonage includes over 25 features (according to there website).

Ooma requires you to subscribe to premier service @ $100-$120 per year (the TOS has changed, and new customers will be paying $120, current customers continue to pay $100)

So to level the playing field, with similar features, we need to compare Vonage world call @ $25/month to Ooma premier @ $250 + $120/year. **keep in mind, the Vonage plan offers unlimited calling to 60 countries, Ooma only does US and CAN... international is additional....

First year -

Vonage @ $25/month = $300

Ooma @ $250 + $120 = $370

Second year -

Vonage @ $25/month = $300 total 2 year cost = $600

Ooma @ $120/year total 2 year cost = $490

the Ooma device does not break even with the Vonage service until 19 1/2 months.

So which one is worth it?
Well Vonage is one of the pioneer VoIP companies. They were strong enough to do battle (lawsuits filed against them) with Verizon and still come out a profitable company. Ooma on the other hand is just a few years old, and not using the industry standard SIP protocol.

If I am looking to cut expenses, and bills I am looking to do so now, not wait until I am more than 1/2 way into my second year of service to finally break even. I do not make international calls, so having them free is not a draw to me, but if I did, that would be another point towards Vonage. But, with the Ooma premier, they do have an instant second line feature - so it is like having 2 lines instead of one.

I am not trying to steer you to one company or another, I would love to get my hands on an Ooma to play around with it, but can not justify the cost of the device. My money would go to Vonage if faced with a choice between these two companies. [EDIT - i had some disposable income since posting this, and purchased an Ooma hub to play around with, used it for about a month, and it currently sits unused in my closet. I will likely be playing around with it some more when I set up a PBX in my home.]