On-Premise PBX vs. Cloud PBX? How To Choose For Your Business

On-Premise PBX vs. Cloud PBX? How To Choose For Your Business

As the switch-off of ISDN and PSTN, the migration to an IP-based business phone system has become an inevitable trend. Companies are then confronted with the choice between on-premise or cloud-based deployment. Well, the debate has been around for years. Despite all the marketing hype, there is no ultimately better option between them. There are fundamental differences as well as pros and cons to each option and the considerations will differ for every business.

To help you make an informed decision, we will look at 5 key questions that you should ask when choosing between an on-premises and cloud PBX system. Before we get started, let’s have a quick look at these 2 deployments.

On-premise PBX

With a premise voice solution, the hardware is installed and runs on-site at your office or data center. You purchase and own the phone system hardware, networking, server equipment, and more, and your IT staff take care of all the updates and maintenance regarding the system. The calls are routed through traditional phone lines (ISDN, PSTN, GSM) as well as SIP trunking.

Benefits of On-premise PBX

There are several compelling reasons to adopt an on-premise PBX solution. If you’re weighing the benefits of a PBX that is kept and maintained on your premise instead of hosted by your providers, here are the arguments in favor of that.

  • Premise PBX has a lower cost in the long run.
  • Potential to reduce costs via SIP trunking.
  • Owning your own network and server systems and keeping them on-premise gives more control.
  • IP PBX ensures that phone calls will be available even if the internet is down.
  • More ability to determine the level of security that will meet your needs.
  • Your IT security team might prefer an on-premise PBX so they can apply their own solutions.

Cloud PBX

cloud-based PBX system is delivered entirely over the Internet and managed completely off-site by a service provider. The only equipment you need to purchase is desk phones. You have some control over the system while the hosted service provider supplies voice services and performs all updates and maintenance. Most hosted voice solutions are charged on a subscription basis with minute packages or by minutes.

Benefits of Cloud PBX

Should your company opt for a cloud-based PBX phone system? There are certainly many attractive features here. Take a closer look at some of the benefits you might enjoy:

  • A cloud-based phone system takes very little time to set up.
  • You can add new lines and make them available almost immediately.
  • Some of the best device flexibility with users able to connect via desktops, smartphones, or VoIP phones.
  • Fewer hardware resources to manage onsite.
  • Exceptionally lower cost.
  • Feature-rich solution.
  • One of the most scalable solutions.

Hosted PBX

Hosted PBX systems are administered and delivered by a third party. In this case, the systems are maintained on physical servers that are held at an external location. Support, management, and infrastructure maintenance of these systems are the responsibility of the service provider. This solution may be referred to as virtual PBX. Companies who choose this option reduce maintenance costs and can rely on their provider taking on the majority of upkeep. With a hosted PBX phone system, companies are still able to use the advantages of VoIP features, such as IVR, conference calling, and voicemail.

Benefits of Hosted PBX

The following may be the reasons why businesses adopt hosted PBX solutions.

  • It’s a scalable solution that allows for easy growth after setup.
  • It’s easy to use as the provider handles all maintenance and support.
  • There’s an upfront cost saving as the setup is managed externally.
  • Enjoy ongoing savings as your company doesn’t have to hire in-house staff for server or network management.
  • Even small organizations can use advanced telephony features like their largest competitors.
  • No maintaining security for extra equipment stored on-premise.

How To Choose Between On-premises PBX or Cloud/Hosted PBX?

In order to decide between maintaining your telephone communications on-site, or relying a hosting provider, you need to assess your business needs and make some predictions about your growth. What is your current staffing? Does your IT department have the skillset to manage an in-house communications system? Would you be better off outsourcing support and maintenance? What about integration with existing systems or unified communications? A current state analysis will help you determine if an on-premise PBX is best for your organization, or a hosted solution is the way to go.

Here are some factors you should consider to help figure out which type of PBX would better suit your business.

1. What’s your budget and preferred pricing model?

One of the big differences between on-premises and cloud PBX is the upfront cost.

Cloud PBX usually falls under an OpEx model with more affordable monthly or annual fees, low initial equipment cost, and setup cost, which means less money to get started. There is no maintenance fee involved. Telecomm providers tend to offer several subscription plans with different licenses, features, and minute packages.

As for the on-premises option, you need to pay fully upfront for the hardware and interface cards (if needed) to ensure complete ownership of the system. However, it also saves you from the risk of fee increases and means lower monthly cost after expenses are covered.

It’s often preferable for large enterprises to buy their own equipment upfront, whereas it’s favored by smaller businesses to pay on a subscription basis.

Related:How to Calculate the Real Cost of a Business Phone System

2. Do you prefer full control of your business phone system?

When you house the PBX system on-site, you will have full control over business communications. It may be a better fit for companies with complex and dynamic communication needs since they can modify it as needed. Also, if the Internet service goes down, they can still rely on traditional phone lines to ensure minimal service disruption.

If you opt for a cloud-based solution, the responsibility of running the PBX is down to the third-party, which can be a huge advantage to small businesses with fewer resources. The potential risk is that the service provider may fail to deliver on its promised quality of service.

In short, it’s a choice between control and responsibility. More control over the system equals more responsibility for maintaining and managing it.

3. Do you foresee significant changes in the staffing level?

In terms of system expansion, cloud-based phone systems are typically more scalable than on-premises ones. Cloud PBX provides a more flexible solution for businesses with staff growth or reduction during the lifetime of the system. The increase and decrease of phone extensions can be made immediately and businesses only pay for what they need.

If you are a seasonal business with fluctuating communications needs or experiencing rapid growth, a hosted model might work better for you. If your business is fairly stable and does not have significant changes in the number of employees in the foreseeable future, it’s totally okay to opt for the on-premises deployment.

4. Do you have multiple offices or remote workers?

Cloud PBX system is capable of unifying the headquarter with remote offices and a handful of teleworkers by consolidating every employee’s phone extension under one system.

As for on-premises PBX, it certainly has the ability to handle remote users and multiple offices, but comparing to the cloud-based solution, it may be a little more complex and expensive.

As unified communications become the new norm, now many premise and cloud solutions can both provide mobile and desktop softphones as well as a comprehensive UC feature set including VoIP, conferencing, collaboration, unified messaging, and more. Remember to take it into consideration if your business operates across multiple locations and has remote workers as it will bring great convenience and efficiency improvements.

Related:  Why Unified Communications Solutions: Top 6 Reasons

5. Are your IT staff capable of maintaining the system?

With the on-premises deployment, the responsibility of installation, upgrades, and maintenance all falls on the shoulders of your IT staff. So before purchasing a premise PBX, businesses should evaluate their IT strength. Do you have technicians with the required expertise to handle all those work? Besides, some businesses may have IT resources that are fully capable of managing their enterprise phone system but would rather prioritize more important and revenue-generating projects.

A cloud-based hosted phone system is up to the service provider to manage the system, which would be beneficial for small businesses and start-ups lacking in technical expertise or resources. There’s also no need to worry about any network issues.

Final Thoughts

Both on-premises and cloud PBX are effective and reliable company phone systems that offer different benefits, whereas each system may be a better option for specific communications requirements. When it comes to the choice between them, there are many things to factor in, such as the size of your business, the number of remote offices, the level of your technical expertise, your tolerance for being dependent on service providers, and more.

Make a thorough evaluation before purchasing. We have worked out a Small Business Phone System Buyer’s Guide to help you find the right VoIP enterprise phone system that will save you money, time, and effort.

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User Login

Instantaneously receive user login credentials via email once the extension has been deployed by the adminstrator.

Log in conveniently via any web browser for access to the user portal.

Integrations

Integrate various CRM software for better customer service and satisfaction.

Enable transcription of audio messages into text with integration of third-party transcription service.

Enable API for integration with various third-party integrations for advanced performance such as call center and hotel reception services.

System

Provision email SMTP and template settings for event notifications to be sent out.

Manage storage allocation and duration of various types of data being stored on the PBX.

Determine the types of event notifications to be sent out, and the parties receiving them.

IVR

Add various audio voice prompts to be played according to different call scenarios.

Add voice prompts on multiple levels for more effecient and precise inbound call routing.

Voicemail

Customize default voicemail settings for each user extension.

Add various voicemail messages for allocation to different call scenarios and users.

Provision specific rules to how voicemail messages are played over the PBX system for better caller experience.

Reports and CDR

All call log activities are stored, with the option of having audio conversations recorded by default or for specific extensions.

Use intuitive visual call reports, to check various call statistics over extensions, trunks, queues, ring groups, and more.

Call reports can be viewed and downloaded directly from the PBX, or scheduled to be sent via email to respective parties.

Security

Restrict a general group or specific IP addresses to prevent unauthorized access to your PBX.

Limit the number of otbound calls users are allowed to make within a time period to protect against toll fraud.

Restrict certain country codes for outbound calls either company-wide or on certain extensions.

User Login

Determine extension ranges for different functions.

Define use of different voice prompts depending on call scenarios or intended function.

Provision basic and advanced SIP settings to be used on the PBX.

Recordings

Record all calls made on specified trunks, including inbound and outbound calls.

Recordings

Record all calls made on specified extensions, conferences, or call queues.

Paging and Intercom

Create different types of paging and intercom broadcast groups for selected extensions.

Set a time schedule to automatically start your broadcast.

Maintenance

Check for and download firmware upgrades to ensure that your PBX is always up-to-date.

Perform back-ups to prevent data and settings from getting lost.

Perform troubleshooting on your own to debug.

Conference

Pre-set conference settings and dial-in passwords for security, and allow internal users to send conference invites to external parties.

Speed Dial

Create multiple speed dial numbers to respective external numbers frequently used for outgoing calls.

Speed dial is activated when the set prefix (default or customized) is dialed.

Ring Group

Create multiple ring groups and determine custom ring strategies and failover settings for each.

Call Queue

Create different call queues with specific ring strategies and failover settings.

Static agents permanently answer calls in queue, while dynamic agents can log in and out. Allocate different extensions to each group.

Determine what actions are to be allowed for Mangers or Agents to manage on the Queue Panel.

Call Control

Have calls received on specific SIP trunks routed to designated extensions or destinations within the PBX.

Set-up dial patterns so that outbound calls are routed to their intended destinations.

Determine how calls are routed and received at different times of a day.

Contacts

Store, retrieve, and share company contact details easily on your PBX.

Organize company contacts into dedicated phonebooks and determine accessibility rights to extension groups for each.

Bulk import a list of contacts instead of having to key details in individually.

Role and Client Permission

Pre-defined user roles within the PBX are conveniently available for allocation, or create your own set of permissions.

Restrict users from viewing specific extensions, departments, or extension groups with Extension Visibility.

Allow or resrict specific users from managing or viewing certain company contacts

Auto Provision

Pre-defined setting parameters specific to respective IP phone models are conveniently available for easy set-up.

IP Phones can be quickly provisioned to your Yeastar PBX with just the pre-defined template and device MAC address.

Trunks

Register multiple SIP trunks on a single PBX as needed.

Different types of trunks can be created, Caller ID can be customized.

Extensions

View, deploy, add, and remove user extensions within your PBX system.

Configure default call and user settings for individual extensions.

Customize allocation of user extensions to specific ring groups.

Portal Login Page

Receive your administrator log-in credentials and set-up guide via email.

Log-in on any web-browser to get started with PBX set-up.

Installation Wizard will guide you through basic configurations.

User Login

Access all company contacts made available to you by the administrator.

Create your own personal contacts list for easy reference and dialing.

Bulk import contact details for convenient data entry.

User Login

Access and manage user settings for softphone application and voicemail.

Manage call routing and presence status for your individual extension.

Retrieve or download your personal call logs and recordings.

User Login

Receive your log-in credentials and set-up guide via email, sent by your admin.

Log-in on any web-browser to get started with PBX set-up.

Configure contacts and personal settings from the web portal.

Auto Provision

Add, remove, or modify IP phone settings from your web interface.

Upgrade IP phone firmware conveniently from your PBX.

Upload various default setting parameters specific to respective IP phone models for greater convenience during set-up.

Contacts

Store, retrieve, and share company contact details easily on your PBX.

Have detailed contact information for your vendors and clients conveniently stored .

Bulk add a list of contacts instead of having to key details in individually.

PBX Monitor

Monitor the status extensions, whether they aren idle, in use, or unavailable.

Know whether your SIP Trunk running properly, or experiencing problems.

Monitor the number of call conferences currently running on your PBX, and their individual durations.

Maintenance

Check for and download firmware upgrades to ensure that your PBX is always up-to-date.

Perform back-ups to prevent data and settings from getting lost.

Perform troubleshooting on your own to debug.

Call Detailed Report

All call log activities are stored, with the option of having audio conversations recorded by default or for specific extensions.

Filter by date, time, or extension number to retrieve specific call logs or recordings

Playback call recordings directly from the PBX or download to store externally.

Event Center

Determine what events and logs are to be recorded and/or have notifications sent.

Specify particular notifications to be sent to respective authorized personnel.

User Permission

Set up vaious groups of users for allocation to certain sets of access rules.

Determine what features a certain group of extensions can or cannot access.

Determine if users can access, play-back, or download call logs and recordings from the pbx.

Security

Restrict a general group or specific IP addresses to prevent unauthorized access to your PBX.

Determine specific the range of SIP ports for connection between your PBX and endpoints.

Restrict country codes for outbound calls either company-wide or on certain extensions.

Voice Prompt

Upload and designate customised audio recordings at multiple levels of a call journey.

Upload recorded music to fill the silence that would be heard by callers on hold.

Upload customised voice prompts to create a professional call experience.

General

Customize general call preferences either company-wide or for individual extensions.

Set-up feature dial codes for convenient user navigation to specific call features.

Determine how voicemails are retrieved, and also upload custom voicemail recordings.

Call Features

Add multiple automated responses to be played at different phases of a call journey.

Designate specific extensions to ring concurrently based on an external caller's dial pattern.

Customize messages and waiting times to keep external callers engaged when put on hold.

Call Control

Have calls received on specific SIP trunks routed to designated extensions within the PBX.

Set-up dial patterns so that outbound calls are routed to their intended destinations.

Determine how calls are routed and received at different times of a day.

Trunks

Register multiple SIP trunks on a single PBX as needed.

Provision SIP trunk settings and dedicate them to particular extensions.

Bulk add DDIs on each SIP trunk, for allocation to an individual or groups of extensions.

Extensions

View, deploy, add, and remove user extensions within your PBX system.

Allocate and deploy specific extension numbers to respective users via email.

Set-up default ring and presence status settings for individual users.

Deal One View

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Deal One View

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View cases created for a Deal in One View.

View cases created for a Deal in One View.

Deal One View

View cases created for a Deal in One View.

View cases created for a Deal in One View.

View cases created for a Deal in One View.