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Many businesses are finding that upgrading their communication system is an effective way to gain business efficiencies while saving money. Moving your business to a cloud-based phone service, meaning VoIP or Voice Over Internet Protocol to make use of a network hosted by a third party (cloud based), can be a challenging process. One of the most important decisions is whether your business is best suited for a premises-based or cloud-based solution.
Premises-based VS. Cloud-based Phone Systems
In a premise-based solution, your business maintains all hardware on-site, whereas with a cloud based solution, a third party provider takes care of everything. In a hosted scenario, your business accesses the service providers network via an Internet connection. The Internet connection can be your businesses existing connection or, in most cases, provided by your VoIP service in a package with phone services.
When comparing the two systems, you will find they are both able to accomplish the same tasks. Areas of differentiation are the amount of control your business will have over the system and the costs associated with running the system. A premise-based system will allow your business complete control but comes with the higher price tag of capital expenditure and maintenance staffing costs. A cloud based solution on the other hand, takes away some of the control but offers much better pricing.
As far as the available features of the systems, both offer roughly the same capabilities. The size of your business is a good indicator of which system you should be considering. Larger corporations will most likely want to manage their own system as they will already have the IT staff on-site to do this. For smaller business, the cloud based option is normally the most attractive. A cloud based system does not need upfront capital expenditure, allocation of space for the system hardware or for your business to staff IT personnel to maintain the system. To reiterate, the main difference is whether upfront costs plus maintenance are preferable to a monthly fee. Larger businesses with 50 or more employees may want to consider an on-premise solution while smaller businesses with fewer employees will most likely choose the hosted option.
In a hosted scenario, when an upgrade or relocation is needed then a simple phone call to your service provider can easily modify your cloud PBX solution whereas with a premise based system you will need additional hardware or relocation of existing hardware. Hosted options also allow your business access to the latest hardware and software from your provider. So in terms of scalability, a cloud based phone system has the advantage in ease-of-setup and cost. Opting for a hosted option can have a very low TCO (Total Cost Of Ownership) because of the lack of hardware and an IT staff requirement.
Making the correct decision when purchasing a new phone system for your business is very important. Many factors come into play, and choosing between premise-based or hosted systems is an essential decision. In most cases, small businesses will likely be better off with a hosted solution while large corporations should choose to host their own. Please note, these are guidelines only and not written in stone. While each system has its strengths and weaknesses, one thing they have in common is superiority, in terms of cost and flexibility, when compared to traditional legacy phone systems. Check online, or talk to a local service provider to have any questions answered and for a free trial. To help take your business communication to the next level, choose to communicate with a cloud PBX.
