One of the biggest decisions our clients face when considering a new unified communications solution is choosing between Hosted and Premise Based products. Over the last five years we have seen the shift in interest towards hosted/cloud based IT solutions and in the natural course of things voice and unified communications have followed suit.
Twinstate Technologies has been in the traditional voice business for over 50 years. The transition has been an intriguing one for our clients and us. With that said, we are in the interesting position of offering both types of unified communications platforms to our customers and are able to provide unique perspectives on each.
In the early days of hosted/cloud communications there were legitimate areas of concern regarding reliability and functionality. Most customers were not comfortable with the thought of their voice communications relying on internet connectivity that was often undependable. In addition the architecture of some cloud solutions was not done with the level of reliability often attributed to traditional premise based phone systems. Cloud providers also struggled to deliver the same feature sets used customarily by businesses.
The world has changed. Internet pipes are more reliable. Diverse internet solutions are more cost effective and readily available. More robust feature sets are being delivered and adopted by end users. So the question becomes: What is the best solution for my business and how do I choose? Here are some Pros and Cons often considered when choosing a Unified Communications platform:
On-Premise vs. Cloud-Based Phone Systems: How to Choose the Right Solution for Your Business
When it comes to selecting a communication system for your business, the decision between on-premise and cloud-based phone systems is critical. Both options offer unique advantages, and making the right choice depends on your business’s specific needs, growth plans, and technical resources. As your trusted advisors, we’re here to help you weigh the pros and cons, ensuring you make an informed decision that supports your long-term success.
What Is an On-Premise Phone System?
An on-premise phone system is housed physically within your business location, typically using a PBX (Private Branch Exchange) to manage internal and external communications. This setup provides a high level of control and customization, making it a popular choice for companies that require dedicated infrastructure and hands-on management.
Ideal for:
- Businesses that require full control over their communication infrastructure.
- Companies with complex communication needs, such as high customization or integration with legacy systems.
- Organizations with in-house IT staff—or a managed service partner like us—to maintain and manage the system.
Key Benefits:
- Customization and control: An on-premise system allows your business to customize features and manage configurations as needed. With the help of a managed voice service like ours, you can ensure your system is always up to date and tailored to your needs.
- Reliability: On-premise systems offer robust reliability, especially in areas with unstable internet, as they are not dependent on external networks.
- Security: You have full control over the security protocols in place, allowing your IT team or managed partner to implement solutions that meet your business’s unique security requirements.
Considerations:
- Higher upfront costs: Purchasing the necessary hardware and setting up infrastructure requires a significant investment. However, ongoing management costs can be mitigated by partnering with a provider like us, reducing the burden on your internal IT team.
- Maintenance and upgrades: On-premise systems require regular maintenance and updates, which can be time-consuming and costly if handled internally. Our managed voice service can handle everything from routine maintenance to troubleshooting, allowing your team to focus on what they do best.
What Is a Cloud-Based Phone System?
A cloud-based phone system, also known as VoIP (Voice over Internet Protocol), is hosted off-site by a third-party provider. This option is popular for businesses looking for flexibility, scalability, and ease of management, with no need for on-premise hardware.
Ideal for:
- Businesses with remote or distributed teams.
- Organizations that need quick scalability and flexibility.
- Companies looking to avoid heavy upfront hardware costs and rely on their provider for maintenance.
Key Benefits:
- Lower upfront costs: Cloud-based systems operate on a subscription model, allowing businesses to pay only for the services they use without investing in expensive hardware.
- Scalability: Cloud systems are ideal for growing businesses. You can easily add or remove users as needed, making it a flexible solution for dynamic environments.
- Automatic updates: Cloud providers manage software updates, security patches, and new features automatically, saving your IT team time and effort.
Considerations:
- Internet dependency: A strong and reliable internet connection is essential for cloud-based systems. If your internet goes down, so does your phone system. Planning for internet redundancy can help mitigate this risk.
- Less control over customization: While cloud systems are highly configurable, they may not offer the same level of deep customization as on-premise systems. However, solutions like Intermedia Unite and Mitel Cloud Solutions offer extensive integrations that meet the needs of most businesses.
How to Choose: Key Considerations for Your Business
When choosing between on-premise and cloud-based phone systems, several key factors should guide your decision:
1. Cost
- On-premise systems: Require significant upfront investment for hardware and installation. However, they can offer long-term savings, particularly if you have a partner managing your system for you.
- Cloud systems: Typically have lower initial costs, but ongoing subscription fees may add up over time.
2. Scalability
- Cloud systems: Excel in this area, allowing businesses to scale up or down easily based on user needs.
- On-premise systems: Scaling requires purchasing additional hardware and infrastructure, which can be more complex and costly.
3. Maintenance
- On-premise systems: Require in-house IT management or support from a partner like us to handle regular maintenance, upgrades, and troubleshooting.
- Cloud systems: Maintenance is handled by the provider, relieving your team of the responsibility.
4. Security
- On-premise systems: Offer full control over security configurations, which can be critical for businesses with stringent compliance requirements.
- Cloud systems: Rely on the provider’s security protocols, which may be sufficient for many businesses. Providers like Intermedia and Mitel adhere to industry standards for compliance, including HIPAA for healthcare organizations.
4. Flexibility
- Cloud systems: Are highly flexible and ideal for businesses with remote teams or those expecting rapid changes in user numbers.
- On-premise systems: May offer more stability but less flexibility in terms of scaling and remote work capabilities.
6. Reliability
- On-premise systems running SIP over the internet: While on-premise systems typically provide higher control over local communications, running SIP trunks over the internet introduces internet dependency. If your internet connection fails and there’s no redundancy, this could disrupt external communications through the SIP trunk. However, local call control can still be maintained within your internal network, allowing continued functionality for intra-office calls. Building resiliency into an on-premise system—through measures like redundant internet connections or backup systems—can be more complex and costly, especially for smaller businesses. That said, it is achievable depending on the organization’s specific uptime needs
- Cloud systems: Cloud-based phone systems rely on a stable internet connection for both local and external communications. However, cloud providers like Intermedia and Mitel often include robust redundancy and failover mechanisms, such as geographically distributed data centers, which minimize downtime even if there’s an issue at one location. Cloud systems can continue to operate even if your local internet connection is lost, provided users have access to mobile data or another internet source, and the cloud provider is not experiencing a major outage. This makes cloud systems highly resilient in most cases, but they still depend on the quality and stability of the internet connection.
How We Help You Make the Right Decision
At Twinstate Technologies, we understand that each business is unique. That’s why we offer tailored solutions to help you navigate the decision between on-premise and cloud-based systems. Our managed voice service provides comprehensive support, ensuring your communication system—whether on-premise or cloud-based—meets your operational needs while staying within budget.
Our process includes:
- A thorough evaluation of your current system and future needs.
- Cost-benefit analysis for both on-premise and cloud-based options.
- Guidance on compliance and security considerations for your industry.
- Ongoing support through our managed voice service, reducing the burden on your internal teams.
Bringing It All Together: Making the Right Choice for Your Business
Choosing between an on-premise and cloud-based phone system is a decision that will impact your business’s communications, scalability, and overall efficiency. Both systems offer distinct benefits, but the right solution depends on factors like your budget, IT resources, and long-term goals.
On-premise systems provide unmatched control, reliability, and security, making them an excellent choice for companies with specific compliance needs or those that prefer to manage their infrastructure directly. However, the higher upfront costs and maintenance requirements can be a challenge. That’s where our managed voice services come in, offering the support you need to keep everything running smoothly, without overburdening your team.
Cloud-based systems, on the other hand, shine in their flexibility and scalability, perfect for businesses with remote workforces or those looking for a cost-effective, low-maintenance solution. While you sacrifice some control over customization, cloud providers like Intermedia and Mitel offer robust solutions with built-in security and compliance features that cater to most business needs.
At the end of the day, the decision isn't just about technology—it's about choosing a system that aligns with your business’s strategic goals. We’re here to help you evaluate your unique requirements, weigh the pros and cons of each option, and ensure that you have the right communication system in place to drive your business forward.
Whether you’re leaning towards the control of on-premise or the flexibility of cloud, our team is ready to guide you through every step of the decision-making process, from consultation to implementation. Reach out to us today to schedule a conversation, and let’s work together to optimize your communication strategy for the future.
References:
- Mitel: A leading provider of on-premise and cloud communication solutions. Mitel Website
- Intermedia: A leader in cloud communications offering robust VoIP solutions. Intermedia Unite
- UCToday: Industry insights on cloud communications and VoIP. UCToday