Added: 09/18/2017 • Written By: John Noblin
Like it or not, business phone systems are headed to VoIP. So, if you haven’t made the change already, you will soon. And when you do there will be decisions. Do you choose on-site or cloud-hosted PBX? There are some fundamental differences between the systems and knowing what those are will simplify the decision and deliver a higher level of satisfaction for the company, its employees and even callers.
In a hosted PBX or hosted VoIP system, the provider is responsible for housing the IP-PBX and managing the technology required to deliver service to the phone system. The desk sets connect to your network and the calls, signaling, and features are handled through an IP-PBX server at the provider’s location. The provider of the hosted PBX charges a monthly fee that includes calling time and many options and features
On-premise PBX is also known as an IP-PBX phone system. It is similar to a traditional PBX system because it is installed at the business locations, usually in a computer equipment room or phone closet. The signaling is done with an IP phone to the IP-PBX server using a LAN. Calls can go through a traditional phone company as well as voice over Internet (VoIP) using SIP trunking. Gateway cards are used to connect the system to the traditional phone company provider. The provider can be the one that already provides service, though a SIP trunk can be configured for use with an Internet service telephone provider (ISTP).
There are some differences between the two options. Understanding benefits and limitations makes it easier to determine the best option for any particular organization. Cost, expansion, and other considerations are laid out to make it possible to compare the hosted IP-PBX and the on-premise IP-PBX within the same categories to learn of the greatest differences.
Purchasing an on-premise IP-PBX phone system involves buying hardware, which includes a server with the proper number of interface cards (if needed) to connect the telephone company with the IP phones. Hosted IP-PBX only involves purchasing IP phones, though a router and network switch may be needed to ensure there is one specifically dedicated to VoIP.
IP phones can be identical regardless of layout. The other equipment, such as server, software, routers, switches and battery backup can be very specific for the individual system. $3,000 to $5,000 is typical for purchasing a server with the necessary software and cards. Ongoing server maintenance with hosted PBX will be the responsibility of the provider, which if purchasing an on-premise PBX, the cost would become the burden of the owner, if not included in the IP-PBX package.
Adding more phones to a hosted PBX is as simple as purchasing more IP phones and plugging them into existing network jacks or computers, unless any kind of additional licensing is required. With on-premise PBX, additional IP phones must be purchased and the PBX may have to be expanded, depending on the number of card slots available in the server.
Your phone system needs to fit your particular business, in terms of size, features and functionality, and budget. Here are a few considerations supporting each type of system.