Cloud Based Vs On-Premise PBX Phones

How to Choose the Right Phone Setup for Your Business

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What's the difference between cloud based (hosted) PBX phone systems and ones that you host yourself "on premise"? We know it can seem a daunting decision to decide between the two. See here our guide to help you make an informed decision for your business.


Cloud Based (Hosted) PBX

Hosted PBX, or hosted VoIP, is otherwise known as a "cloud-based" phone system. The phone provider (Interwest Communications, for example) hosts all the servers and technology required to make your phones work and connect. The provider of the hosted PBX charges a monthly fee for this service vs you providing the up-front capital to install all the server equipment to run your own PBX system.

On Premise

You purchase the telephone system hardware, networking and server equipment necessary to run your phone system. This equipment lives "on site".  Your calls are routed through a traditional phone company as well as through VoIP using SIP trunking. You purchase the telephone system equipment and bundled installation, and Interwest will configure, install, train and maintain this system for a low annual fee. 

 


Side-by-Side Comparison Chart

 

Hosted PBX

Phone provider maintains your system off site in the cloud.

On Premise

You manage your own phone system/servers on site.

 

Recommended for:

Any size business that wants to conserve IT dollars with an OPEX model; or a small business or start-up that does not have in-house IT resources or the capital funds necessary for a phone system purchase.

Recommended for:

SMBs or enterprises with available IT resources who have the need for more control over their phone system, or require a more customized solution. Lower TCO if capital funds are available to pruchase a phone system.

VoIP Features Call control / Collaboration / Mobility / Call management / Voicemail / Messaging / Contacts / Web-based management / Call training / Integrations / Contact center / Analytics All features included All features included
Future Expansion How easy is it to grow and update your system?

Pros:

  • Your provider shoulders all the risk, work, and complexity
  • Growth or retraction can happen quickly
  • Software updates happen automatically so you always have an up-to-date system

Cons:

  • (None)

Pros:

  • You have complete control and flexibility—you can even switch solutions or mix-and-match

Cons:

  • Every expansion can add to the complexity and includes additional hardware aquisition costs
Cost of VoIP Services What will you pay?

Pros:

  • Lower setup cost
  • No ongoing maintenance costs
  • OPEX model

Cons:

  • You never own the phone system. You'll always pay a monthly subscription fee for the use of the platform

Pros:

  • No risk of fee increases
  • Lower long term total cost of ownership
  • CAPEX model

Cons:

  • Higher setup costs
  • Unknown long-term maintenance and support costs
Control & Maintenance How much control do you have to make changes and updates to your system?

Pros:

  • All the major software updates and maintenance processes are handled by the provider
  • Ability to spend IT resources on other revenue-generating tasks

Cons:

  • Your service provider has the actual control over your system – you don’t own the platform

Pros:

  • You have control over every detail. An easy-to-use solution with careful management will give you a solution that matches your needs better than anything else can

Cons:

  • All software updates and maintenance processes must be done by internal IT staff, or outsourced
Why would you do it? What are the key decision points when deciding between the two options?

Pros:

  • Service provider may have more resources to implement a solution you could not afford to do just for yourself

Cons:

  • Some Cloud options do not scale to large deployments in a cost-effective way

Pros:

  • You can do what you want with your equipment—ultimate flexibility

Cons:

  • You may not have enough internal IT resources or the budget to make complex, expensive or highly customized changes
Setup & Implementation How easy is it to setup and get started?

Pros:

  • Cheap, Quick, and Easy to deploy

Cons:

  • Potential feature limitiations for advanced configurations

Pros:

  • Highly customizable and feature rich

Cons:

  • Deployment may take longer and require more input from you on configuration options