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By Danielle Hoverman • May 3, 2018

Hosted PBX & VoIP vs. On-Premise Phone Systems

Hosted VoIP (cloud-based phone system) is where your phones connect through your internet connection to a provider that maintains the equipment at an off-site cloud data center. An on-premise solution is where your hardware is kept on-site in your server closet. Making the best investment for your business requires understanding the benefits and potential challenges of both a hosted and on-premise phone system. Here is a side-by-side comparison that will help you learn the pros and cons of each solution.

[You Might Also Like: Blog Article - "What is Hosted PBX & VoIP and How Can It Benefit Your Business?"]

Hosted PBX vs On Premise Comparison Chart

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Pros: Hosted PBX & VoIP

  • Software updates & maintenance handled by the provider
  • Frees up IT resources to focus on business-critical tasks
  • Service providers typically have more resources to implement your solution
  • Implementation is cheap, quick & easy
  • Minimal in-house IT resources needed
  • Your provider carries the risk, work, and complexity
  • Scaling up or down is quick
  • Software updates happen automatically so your system is always up-to-date
  • Lower setup cost
  • No maintenance costs
  • OPEX (operating expense) cost model

Cons: Hosted PBX & VoIP 

  • Services run over the internet, so adequate bandwidth & internet reliability is required
  • Training required for users which may or may not be offered by your provider
  • Potentially higher ongoing service cost

Pros: On-Premise

  • You have control over entire system
  • You can make any changes and updates to your equipment at anytime
  • Intimate knowledge of system’s capabilities since you are handling deployment
  • Deployment times take longer
  • You have control & flexibility
  • No risk of fee increases

Cons: On-Premise

  • All software updates & maintenance must be done by internal IT staff or outsourced
  • Requires a lot of IT & financial resources to make complex or highly customized changes
  • Training required for users which may or may not be offered by your provider
  • Every expansion increases complexity, which you have to manage yourself
  • Higher setup costs
  • Unknown long-term maintenance & support costs 

Interested in learning more about Hosted VoIP & PBX, or are you ready to make the switch now? Contact us at 888.698.0763 today

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