Hosted vs. Premise-Based PBX: Which is Better for Your Business?

Your business may be perfectly happy with its current premise-based solution, and things may be running quite smoothly. But things can change quickly especially when it comes to technology. The premise-based PBX vendor you count on today to support your solutions might not be around tomorrow. Or as often happens these days they could discontinue the product you own and force you to upgrade to a more expensive system to continue being supported. Another frequent occurrence is, the internal IT/phone expert you rely on to make updates/fixes/changes to your phone system could leave the company. In other words, a lot can happen to undermine the happiness you currently have with your premise-based business phone system. And if you have a multi-vendor system—i.e., multiple vendors providing the local and long-distance voice, PBX, IVR, audio conferencing, fax service, etc.—you can multiply the dangers of disruption many fold. Small businesses that fail to update their communications capabilities could also risk falling way behind their competition without realizing it until it’s too late. Communications systems have evolved considerably in recent years, driven in large part by a millennial workforce that has quite literally grown up with a mobile phone in its hands – all of the time! Millennials expect communication and collaboration to follow them seamlessly whether they’re at the office or working remotely, on their desk phone, laptop or smartphone—and they’ll naturally gravitate to companies that meet their expectations of mobility and flexibility. That said, small businesses shouldn’t feel cornered into an all-or-nothing approach when it comes to cloud-based communications. As we’ll cover in the following sections, as well as in future installments, today’s hosted and premise-based solutions both have much to offer in terms of cost, convenience, features, security and quality.

Hosted VoIP vs. Premise VoIP: Which Costs More?

When you purchase a premise-based VoIP solution, there are significant upfront costs including the PBX appliance(s) and associated license fees. In addition, you have the maintenance/upgrade fees for the PBX appliance, which tend to get higher as the PBX appliance gets older. You will also likely have a service contract with your vendor unless you have an in-house expert to maintain your system. Finally, there is a separate cost for the local and long-distance service as well as the per-line fees necessary for the business. By contrast, a hosted or more commonly called Cloud Based solution typically bundles and spreads out these costs evenly over time in the form of monthly fees. In order to recoup the costs of the equipment that they must maintain for the customer, a hosted provider will often sign customers to a minimum contract (e.g., two years) but some providers ( like Intulse for example ) do not have long term contracts. Hosted customers do tend to have more flexibility, however, in terms of what they actually pay for, such as special features or usage plans that can be tailored to the individual subscriber—as opposed to a high-end PBX appliance that delivers advanced features most subscribers may never use but pay for anyway

THE VERDICT: Ultimately, hosted vs. premise-based platforms can come down to a personal preference for a capital expenditure or operations expenditure pricing model. In a nutshell the premise solution; 1) costs much more upfront 2) has full feature capability built in that isn’t optional 3) requires a service contract or in-house IT expert where the Hosted Solution; 1) little or no upfront hardware costs 2) advanced features can be added at any time and paid for only when needed 3) maintenance and support is provided by the host an included in the consistent system + service monthly bill. A Hosted VoIP solution = 1 vendor, all bundled together, one number to call for support!
Stay tuned for the next segment where we will look at:

Hosted VoIP vs. Premise VoIP: Which Is More Convenient?

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