On-Premise Phone System vs. Hosted Cloud Phone System 

woman usign on premise based phone system

You’ve decided to update your business’s phone and communications systems to something a bit more up to date. Afterall, the traditional phone system isn’t keeping up with the needs of your employees, so it’s time to upgrade. 

There are many options to choose from, but you’ve probably narrowed it down to a premise-based or cloud-based phone system. There are pros and cons to each and it’s not an easy decision, but choosing the right one will improve communications and make those communications hassle-free. 

We’ll outline the differences and pros and cons, so you’ll have all the information you need to make the best decision for business needs. 

What is an On-Premise Phone System? 

An on-premise phone system is physically installed in the building and connects your office’s data servers to the employees’ desk phones. You’re able to use IP technology and connect through an Internet connection. The main PBX is inside the location. Therefore, the system isn’t in the cloud. 

You don’t necessarily have to contend with a room full of wiring, you just need a place to host a server. An on-premise system still requires traditional voice connections, but with technological upgrades like SIP trunking, it’s possible to take advantage of modern technology and have phone calls routed over the Internet. 

Pros of Premise-Based Phone System 

There are pros of upgrading to a premise-based phone system. If you’re a small business and have an IT team that can handle the implementation and maintenance, it can be cost-effective. It’s ideal for businesses who have returned to the office full-time. 

  • More control. Your team has full control of the system and makes the necessary upgrades, adjustments, and patches to keep your data and communications secure. There’s virtually no risk to a data breach on the vendor side. 
  • Reduced spend. With the features available, affordable pricing, and on-premise system can help control costs. 

Cons of a Premise-Based Phone System 

There are some cons of upgrading to a premise-based phone system. 

  • Costs and maintenance. Once the setup and installation are finished, which can be expensive in and of itself, you’ll have to handle the maintenance of the hardware. If you have a small office, you may not have the room to accommodate the hardware. 
  • Reliability. While reliable, since they are on-site, they are prone to power outages, wear and tear, and most notably, natural disasters. If you’re in an area prone to natural disasters, you may be without a communications system for a while. It comes down to your Internet service and backups. 
  • Total cost of ownership. The total cost of ownership of an on-premise system is a bit higher because of upfront investment on the hardware, maintenance, and upgrades. 

If it’s not essential to have the latest and greatest technology, and just need a basic phone system to support your small team, you might want to consider an on-premise phone system, as long as you have the space to house the hardware and have a team or managed service partner to provide support. 

What is a Cloud-Based Phone System? 

If you have a remote or hybrid (on-site/remote) team, you may want to consider a cloud-based phone system. A cloud-based phone system uses your existing Internet connection to make and receive calls. The hardware and software are hosted on your provider’s server and is run completely off-site. There’s no need for any upfront hardware costs, as they’re all hosted by the provider. You buy the service from a provider and pay a subscription fee – usually per user. 

The phone system is hosted in the cloud and calls are made with IP-phones, mobile devices, or softphones (web-based phone), and the voice data is transmitted over the Internet. 

Pros of a Cloud-Based Phone System 

A cloud-based phone system is ideal for businesses of all sizes, especially ones who have a remote or hybrid workforce. If you’re a growing company and planning on adding headcount, a cloud-based system is also a great choice. 

  • Better reliability. Since the system is hosted in the cloud, there’s no hardware to support. In addition, downtime isn’t a concern. If your area suffers an emergency and your employees can’t get to the office, they’ll still be able to access the system. If your provider suffers an outage, they have redundancies setup, so if a server goes down, another one jumps into action. 
  • Feature-rich. With a cloud-based system, you have access to a feature set that other systems can’t keep up with. Auto-attendant, voicemail-to-email, smart call routing, and CRM integrations just to name a few. Plus, mobile apps put the phone system in your pocket. 
  • Hands-off. The provider handles all the upgrades and updates to the technology. Your employees just need to update the software on their devices. 

A cloud-based phone system is ideal for the business who’s managing a remote team, or at the very least, a hybrid team and who don’t want to front the expense and manage the hardware. 

Advanced Communications Simplifies Communications 

Whether you’re considering an on-premise or cloud-based phone system, consult the experts at Advanced Communications. We’ll get to know your business and provide all the information you need to make the best decision for your business. Contact us today and let’s get the conversation started. 


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