The Benefits of Hosted VoIP versus On-Premise IP-PBX

Communication is at the heart of every business and as such, itís important that you choose the right solution for you. If your business currently uses a traditional PBX system, then moving to a VoIP-based, or hybrid, system is the right choice. For the most part, the advantages of VoIP lie in its affordability and the lack of maintenance that the business needs to carry out. There are differences in the type of VoIP system that you employ though and the main one is whether you choose to have your phone system at the business premises, or hosted in the cloud.

What is Hosted VoIP?

Hosted VoIP, or hosted PBX is a system in which the provider houses all of the necessary hardware to provide VoIP to a business. Typically, this will be housed in a secure data center with the business premises using handsets which connect via IP addresses. These are generally charged using a monthly payment model and no capital expenditure is required as the equipment needed is owned by the hosting company.

What is on-Premise IP-PBX?

Similar to a traditional office telephone system, IP-PBX uses VoIP, but the necessary equipment is housed at the business premises. IP phones are used, but these are routed through the IP-PBX server and over the LAN. With this solution, calls can also be made using the traditional telephone network as well as VoIP with the use of SIP trunking.

First Things First

The major benefit of hosted VoIP over on-premise is in the cost. As IP-PBX requires hardware; this means that there will be costs to set it up in the first instance. These might include:

         SIP trunking

         VoIP-ready handsets

         Gateway routers/cards


However, with hosted VoIP, all you will need to purchase is VoIP telephone handsets and depending on your provider and office setup, perhaps a router. IP-PBX systems will also need to be maintained by you, whilst with hosted PBX, all of the necessary maintenance and upgrades are carried out by the supplier.

Why Choose On-Premise IP-PBX?

So the cost advantages with regards to choosing hosted VoIP are obvious. Your only responsibilities lie in configuring the system on the network and paying for the service each month. Thereís no capital expenditure and you donít have to worry about hardware failures or downtime.

So why would anyone choose IP-PBX, I hear you ask. Well, the first reason would be in the control thatís maintained over the company network and everything on it. This means that you can add and delete users as desired, you donít have to change your current telephone supplier and over time, having your own server can lessen costs. However, you do still need to get a good supplier for your VoIP calls and ideally, these should be able to handle setup, training and maintenance, which can further increase costs. The major advantages of having an on-premise solution really lie in ownership and control.

Why Choose Hosted VoIP?

Cost benefits aside, the beauty of a hosted system is that you can move it at any time without any disruption to service. Further to this, all of your software and hardware updates are handled by the provider. However, if the internet goes down then you do potentially lose your telephone system, although this can be covered by a disaster recovery plan that includes rerouting essential numbers to mobile devices. Also, most Hosted VoIP solutions provide the ability to make and receive calls from your desk extension using mobile apps available on cell phones.

What About Security?

Security is a main concern for many businesses, especially when it comes to using cloud-based services such as hosted VoIP. However, itís an unnecessary concern for the most part, since security issues usually exist at network level. Any IT technician worth her salt will tell you that for the most part, security errors occur due to mistakes made by the end user.

These can be as simple as clicking on a phishing link or it can be a deeper network issue such as a failure to implement software updates in a timely manner. A report out last year found that of the three million businesses it studied that had been attacked in the previous year, many hadnít implemented even the most basic security such as AV software, some software updates were at least 2 years out of date, and 77% of the businesses studied didnít have any incident response plan.

With this in mind, itís very likely that security at the hosting provider data center is superior to that at network level, although there will, of course, be exceptions to this.

Choices, choices Ö

Thereís no Ďone is better than the otherí answer when it comes to hosted VoIP versus on-premise IP-PBX as it will depend on your business as to which suits you better. Both solutions offer great scalability and flexibility so they can grow with your business easily, unlike traditional systems. Both offer cost savings, with hosted VoIP offering the most, especially in the first instance as no capital expenditure is required.

So the decision lies with you Ė if you want to ensure a certain level of control and you have a fairly large network that already requires cabling and at least one server, then perhaps on-premise is for you. If you have a smaller business that needs to keep costs down and doesnít necessarily have the budget to invest in SIP trunking and hardware, then hosted VoIP is clearly the better solution.

If youíre still not sure, then please do feel free to give us a call to discuss your options at more length on 855-696-9990.