Voice - On Premises vs Cloud

Core Differences Between On-Prem and Cloud Phone?Systems

This is the biggest difference between on-premise and cloud-based phone systems. As the name implies, an on-premise PBX is an actual piece of hardware kept on location. On the other hand, a Cloud PBX, does not require additional hardware or software on-site. Instead, data is transmitted over the internet and managed entirely by your service provider.?

Updates and Upkeep?

Like any legacy technology, traditional PBXs rarely receive updates. Between basic upkeep and regular maintenance, admins spend a lot of time troubleshooting this kind of complex system. And you’re on your own if something breaks down. But with a Cloud PBX, new updates and upgrades are rolled out automatically. You don’t need any expert technicians, because the system can be easily modified on a browser. Your service provider basically handles all the heavy?lifting.?

Reliability and Connectivity?

Traditional PBXs are vulnerable to natural disasters, wear and tear and power outages since they use copper cabling to transfer phone calls. Cloud PBXs, on the other hand, are as reliable as your internet service (which, based on the digital needs of today’s workforce, needs to be top notch). These systems are housed in secure data centers equipped with redundancies, making sure your connection never goes down. Really, it all comes down to the reliability of your internet service (and?backups).

?Total Cost of Ownership?

Thanks to the physical equipment needed, on-premise PBXs end up requiring a significant upfront capital investment, which is then compounded by maintenance, upkeep and upgrades — not to mention the space required for hosting it. A Cloud PBX converts this capital expenditure (CapEx) model to a monthly operating expense (OpEx).

For example, one of the largest costs for on premises PBX systems is the SIP Trunking or PRI Costs from your provider. Depending on the cloud PBX provider their infrastructure has the ability to leverage a large SIP/PRI infrastructure and build the resulting savings into lower monthly costs.

Not only do you skip all those massive upfront costs, but your total cost of ownership is lower because hardware is optional depending on whether you prefer desk phones or softphones. However, unlike on-premise PBXs that come with initial upfront costs, Cloud PBXs come with higher monthly expenses. All in all, it really depends on your position on CapEx and OpEx. Paying monthly per user might “cost” more than realizing a CapEx investment over X years, but you’re also not dealing with hardware, SIP Trunking or?PRIs.?

Scalability?

With an older, on-premise PBX, scaling can be an extensive process. If you’re adding a desk phone, you’ll have to tweak the wiring in the closet and add expensive PBX line cards. But with a Cloud PBX, adding and removing a phone line is as simple as configuring it on your administration portal - just keep in mind you’ll have to pay for another?“seat.”?

Key Questions to Consider?

If your organization is trying to make the decision between an on-premise and cloud-based phone system, you need to make sure you’re asking the right?questions.?

Financing?

• Would you rather pay for the upfront investment of an on-premise solution or extend payment with monthly installments for a cloud option??
• Does your organization prefer CapEx or OpEx??
• Are you already in a lease for a PRI or SIP trunk which makes up for a significant ongoing cost which in a lot of cases is more expensive than a total cloud solution??

Resources?

• Do you have the tools to ensure top-level security??
• Do you have the internal resources needed to manage the system in-house??
• Do you have a lot of remote workers or unreliable power at your location(s)??
• What level of support do you need? What level of support do you want??

Technology?

• Is it important for you to have access to the latest functionality and compatibility updates??
• Do you need a lot of features that would incur additional monthly fees or licensing??

Decisions, Decisions?

All in all, there are a lot of factors to consider when choosing your next phone system. While most organizations will move toward the cloud after weighing the expense of modern PBX hardware and the staffing required to maintain it, it really depends on your organization’s situation.

For More Details

Please feel free to reach out if you would like more details or a free assessment.