CloudVoice or Premise IP-PBX

Choosing a new communications platform

When it comes to updating your voice communications there are two primary options. The traditional option is to build and manage premise-based phone system often called a PBX, IP-PBX or Key system. A newer option is to leverage the cloud with a Cloud Voice or Hosted Voice solution.

The key difference between a traditional premises-based PBX and a Cloud Voice solution is where the majority of infrastructure elements are physically located, and who owns and or manages them.

Understanding benefits and limitations of each solution makes it easier to determine the best option for any particular organization. Cost, expansion, and other considerations should be laid out to make it possible to compare Cloud Voice and an on-premise PBX within the same categories to learn of the greatest differences.

A very important consideration for either solution is your businesses Business Continuity/ Disaster Recovery plan.

What is a Cloud Voice Solution?

A Cloud Voice or Hosted Voice Solution is where the main system of the IP-PBX is housed off site at a hosted provider’s location who is responsible for providing and managing hardware and software technology required to provide the services to the end user.

Calls are routed to the Cloud Voice provider via SIP Trunking from the PSTN and to the end user via a data connection. This can be a dedicated data connection or via an internet connection at the end user’s location.

The provider of the Cloud Voice solution charges a monthly fee that can be inclusive of a minute’s package and certain features. Advanced features and applications are usually available for an additional monthly charge.

The end-user desk phones will plug into a POE (Power over Ethernet) switch and the calls, signaling, and features are handled through an IP-PBX server at the provider’s location.

Changes and updates to your system’s configuration, call flows, functionality & user setups are made via a service ticket.

What is a Premise based solution?

A premise based PBX is a traditional PBX system that resides onsite in a location such as a computer equipment room or phone closet. Calls can be routed via traditional phone lines ie: POTS lines, T1 or PRI or SIP Trunking via an internet connection at the end users location. The business will usually have someone on staff to manage Moves, add and changes as well as a phone system provider who will be called out for repairs, upgrades or major changes.

Benefits of a Cloud Voice system include:

  • Little or no upfront costs
  • Reduced amount of hardware onsite
  • Built-in disaster recovery business continuity
  • Lower hardware and software maintenance
  • Yearly software updates and feature enhancements are part of the service
  • Improved performance and reliability
  • Pay only for what is used
  • Scalable easily grows with your business
  • Relocation is simple

With Cloud Voice the loss of Internet or catastrophic event has no effect on operations because calls can be sent to voice mail or a mobile phone. This is because of redundancy within the Cloud Voice providers Data Center that has safeguards including back up power sources.

Benefits of an on premise PBX

  • Having on premise PBX gives user control to create, adjust and delete users as desired
  • Current carrier does not have to be changed
  • Own the equipment / capital expense
  • Potential lower TCO over the long term
  • Ability for high levels of customization

Weigh the pro’s and cons

CloudVoice/Hosted Premise
Capital expenditure or Operating Expense Little to no up-front costs. No hardware costs — except for potentially the phones. Large upfront costs. Expenses include phone hardware, software licenses for users and applications, rack space, power, cooling, etc.
Installation costs Low installation costs because little/no hardware needs installing. High installation costs because hardware needs to be installed and more onsite work for vendor.
Migration strategy Software is upgraded along with manufactures releases so it’s easy to stay current on new features and solutions. New unified Collaboration features/services can be readily available, allowing IT to roll out new functionality at will. IT teams usually must do large overhauls to existing infrastructure. This can result in communication downtime. On-premise solutions can a very long time to roll out company-wide and normally at a very high cost.
CloudVoice/Hosted Premise
Infrastructure required The hosted infrastructure required to provide UC functions (chat, presence, etc.) resides in the data center of your service provider. Your IP connection to the cloud allows users to access that functionality. Back-end infrastructure is all bundled in a monthly fee. On-premise infrastructure may vary by vendor but will typically include: multiple server(s) for the IP-PBX and voicemail; UC functions (chat, presence, etc.); and sometimes management/administration functions.
Provisioning requirements Connectivity to the PSTN is provided in the cloud. So, there is one less contract to worry about — since the cost of this connectivity is bundled into your per-user fee. For in/outbound calling, traditional phone service contracts for voice lines, analog, PRI or SIP are required. This can lead to finger pointing if there is a problem.
Licensing Providers typically charge a per-user licensing fee. Pay for features per users as needed. Easy to add applications and functionality only to those users who need it. Licensing is more granular and complex. There are OPEX costs for software maintenance on the licenses to ensure support and functionality upgrades. Usually a large initial investment in an application functionality then the user licenses.
CloudVoice/Hosted Premise
Maintenance and updates Software updates are maintained by the cloud provider, so subscribers will always be up to date. Updating features may need to be repeated a number of times, depending on the architecture of the on premise solution. There are costs associated with doing the upgrades and often systems are out of date requiring an even larger upgrade.
Total cost of ownership (TCO) Cloud Voice with Hosted Unified Collaboration TCO savings can be substantial. On-premise Unified Collaboration TCO costs can high. Don’t base your calculation on the fact that your existing system lasted 15 years. Your new system most likely will not.
Disaster recovery (DR) Cloud Voice makes you reliant on your Internet service and hosting service. Most providers do offer reliable redundancy. It can be expensive to include redundancy into on premise IP-PBX.  Only larger enterprises can typically afford investing in DR. One pro is that you have access to equipment for troubleshooting at any time.


In Conclusion…

There are pros and cons to both solutions. Knowing the differences and understanding the benefits and potential disadvantages of each will assist you in making the best decision for your organization.

2017-02-01T21:56:56+00:00 October 14th, 2016|News|

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