Hosted VS. On-Premise VoIP Phone Systems: 5 Attributes To Take Into Consideration

One of the main decisions in regards to purchasing a VoIP phone system is whether to go hosted or on-premise. Each avenue brings on its own benefits and challenges, and it is up to the needs of your business  as to which you should use. This is why it’s important to take into consideration aspects such as, how your business operates,  what your financial position is and what you need from a phone system. Answering questions revolving around these aspects can help you in deciding which form of VoIP to purchase.

Below we have listed 5 attributes you should take into consideration to answer these question of going with hosted or on-premise for your VoIP phone system.

Initial Cost:

Let us cover the obvious factor most owners take into consideration first, initial cost.  Obviously, going with a hosted VoIP phone system is going to have a lower initial cost then on-premise. With hosted you are not buying the equipment, only acquiring an initial set up fee and are paying on a monthly bases. With on-premise you are buying all of the equipment upfront  and will probably have a higher installation fee.

Current Infrastructure:

Your current infrastructure can play a very critical part in deciding between hosted or on-premise. With hosted everything runs off your connection to your remote holding facility. So, say the connection goes down in your office or at the facility, you’re without a phone system.  While this might not be a big deal for some businesses, a down phone system could be a major problem for some who heavily rely on their phones.

Features:

The next aspect to take inconsideration when deciding is what features meet your business needs. In regards to hosted versus on-premise phone systems, on-premise phone systems will usually always have more features. Also since you own the phone system you are able to add features whenever you see fit. With hosted you are able to add features but they might be limited compared to on-premise. When it comes to deciding on features ask yourself questions like, what is it we need…, does this system offer them…, will I need more features later… and will this phone system give me those.

Future Growth:

When making any business purchase, potential growth needs to be taken into consideration. Do you plan to grow? Will this growth be rapid or slow? The determination of your expected growth should have an influence on which system you go with. If you expect to grow and go with on-premise, it might mean buying a larger quantity of equipment upfront.  With hosted your monthly charge will increase with every additional seat you add. Also with growth you have to take into consideration the management of your system. With hosted you are at the mercy of your provider, they are the ones that deal with all your changes and installation. This means you are on their time and run the risk of possibly having it not done by the time you need. On the other side with on-premise, you have to manage everything yourself and each addition adds complexity to your systems equation.

Total Cost of Ownership (TCO):

Finally you have to look at the total cost of ownership for each solution. Naturally a hosted phone system will have a lower TCO because you do not have to higher IT personnel to maintain your system. This is preferred to smaller businesses who do not have the resources for a IT staff. But like we said, you are at the mercy of your provider. On the other side for an already large, growing organization going with on-premise might be the right choice. This is because you most likely have the resources to cover the larger upfront cost and have the ability to hire an IT staff.  This in general could be quite cost-effective for your organization especially if you rely on your phone system to run your business. If any issue arises you have someone who can have it up and running again immediately.

All of these attributes are needed to be taken into consideration when it comes in deciding to go either hosted or on-premise with your phone system.  But a very basic look that revolves around it is, do you want to own the system and take on the responsibilities of ownership, or do you want to rent it without the responsibilities of maintaining it?

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