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On-Premise vs. Cloud-based Voice

An unbiased look at how to choose the right voice path for your business 

The Definition and Difference

A premises-based PBX solution (also known as an IP PBX) is dependent on a voice server which is kept on-site in an equipment/server closet and physical phones are located throughout the office. Calls can route through a traditional phone company as well as over the internet using SIP trunking.  

Hosted PBX is a cloud voice solution where the provider manages/maintains the voice server in a cloud data center. The only equipment in the office are physical phones. Calls route over the internet using SIP trunking.   


On-Premise PBX 

  • Cost – There are higher upfront costs and set-up fees with PBX. Above a certain threshold, it might be cheaper to own equipment rather than to pay a monthly fee, but servicing and maintenance can get expensive. When using only basic call features with >25 phones per store, the total cost of ownership is likely less for on-prem PBX over a 5-year period .
  • Scalability – You will need to purchase phones to expand (in addition to any licensing required). PBX needs to be able to accommodate growth and possibility of complexity with added features  
  • Failover – If there is an issue with PBX in your location, calling is affected and potentially down until it can be repaired via your service contract.
  • Features – The Find Me / Follow Me features require adding a mobility server to each PBX which can become expensive. Presence and mobile apps for wireless calling can be added and usually works together with Find Me / Follow Me features for seamless use across devices. 
  • Maintenance – Managed services contracts (with phone vendor) are required for software patching and maintenance to ensure security and uptime.
    • Changes to system settings require PBX in store to be adjusted on-site by phone vendor or internal IT team.
    • Can leverage traditional phone company service (PRI) for inbound/outbound calling, or SIP trunks over the internet. 
    • PRI is not affected by quality or busyness of internet connection. 
    • Handsets do not contain a lot of features/functionality - providers push users to use the desktop application.

2019-08-21_Tech-Guidance_Blog_CLOUD-VOICEHosted PBX 

  • Cost – Typically hosted PBX has low upfront costs and a monthly per-user charge. Usually, total cost of ownership is lower because hosted providers take care of server configuration, maintenance and software patching.  
  • Scalability – Purchased or leased IP phones can be added to a service plan, and picking and canceling numbers and moving phone system is easy and quick.  
  • Failover – calls can be rerouted to cell phones if issue with SIP trunk quality, power at the office or experience a catastrophic event. Safeguards at off-site facility includes back up power sources, geographic redundancy of data centers, active-active failover of servers, etc.  
    • Can also integrate contact center-life features for advanced call routing or call analytics for advanced reporting  
    • Dedicated internet bandwidth is required to maintain high call quality of SIP trunks.
  • Features – Hosted PBX can integrate into a CRM for advanced customer analytics .
    • Mobile apps allows users to make/receive phone calls from the app over Wi-Fi/cellular connections.  
    • Presence allows users to see who is available and on the phone.  
    • Find Me / Follow Me feature included – will ring desk phone, tablet, cell phone all at once or in order  
  • Maintenance – No is no managed services contract required. The provider performs software patching, maintenance and upgrades of PBX in the cloud.  
    • Changes to system settings are performed through online portal for remote management.  
    • Handsets do not contain a lot of features/functionality; providers typically push users to adopt the desktop or mobile app 

 Questions to Consider

  • Would you like to keep existing TDM or POTS lines? Will your legacy system make it more expensive to keep, or will there be cost savings in switching to VoIP trunk or hosted solution?  
  • Would you like to make/receive phone calls on a tablet or mobile phone will be moving?  
  • Do you prefer phone calls only on a desk phone?
  • Would you check an app to see if coworkers are busy before calling/messaging them?  
  • Would you message coworkers with quick questions?  
  • Do you require features such as queues, IVRs and conferencing?  
  • Do you prefer/require integration into a CRM system? 
  • Will management of locations worldwide through an online portal benefit your IT staff?  
  • Would removing management of software patching across multiple locations and countries benefit your IT staff? Would it lessen security concerns? 

Get to know more about UCaaS here.