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Do You Need an On-Premise or Hosted PBX Voice Solution?

The Headlines, VoIP, Unified Communications, Phone System, On-Premise, Hosted PBX, Voice Solution

Business person choosing between two options separated by a yellow border arrow concept

A critical question you will face when choosing a voice solution is “Does my business need an on-premise voice solution or hosted PBX voice solution?” On-premise solutions are the traditional choice, but hosted PBX solutions have become increasingly popular, and for good reason. In this blog, we compare both solutions and explain five major differences to help you determine which is the right fit for your business.

On-premise voice solution: The hardware required for your phone system is installed on an on-site server that your IT department manages and maintains. Dial tone is delivered directly to your location and connects to your phone system.

Hosted PBX voice solution: A cloud-based phone system where a third-party provider maintains your voice hardware at an offsite data center. Calls are connected through an Internet connection.

An illustration of telephones hanging from a cloud to represent cloud or hosted PBX voice solutions

5 Defining Differences: On-Premise vs. Hosted Voice Solutions

#1. Expenses and Installation Costs

For on-premise solutions, you pay for hardware, labor, and the space to keep it all. This means that the larger your business, the larger the cost. For hosted solutions, there's little to no hardware to install or purchase because your provider covers that for you, so you get instant start-up cost savings! Hosted solution providers allow you to pay as you go, so money and resources aren’t wasted on things you don’t need.

#2. Migration Difficulty

When trying to switch to an on-premise solution, you might experience downtime while replacing or installing all of the infrastructure required. This can cause frustration and lost productivity, especially considering that fully setting up an on-premise solution takes time. On the other hand, hosted solutions can be quickly and easily implemented for a seamless transition from your current voice set-up.

#3. Managing Moving Pieces

There are numerous "pieces and parts" that make Unified Communications (UC) work, which makes on-premise solutions a big task for your IT department to manage. With hosted solutions, you can enjoy streamlined UC without the hassle because your provider implements, manages, and maintains all of the infrastructure for you. This frees your IT department from the task, allowing them to get back to what they do best and increasing business productivity.

#4. Maintenance and Scalability

With an on-premise solution, you are responsible for the upgrades, maintenance, and expansion of the system, meaning you'll need to shoulder the costs and complex licensing that go with it. Not to mention that every expansion will create even more complexity for your IT department to manage.

Hosted solutions remove this burden because updates are instant and handled by your provider to ensure you're always up-to-date. Hosted solutions are flexible, fast, and easy to scale up or down, which your provider handles for you, saving your business time and money.

#5. Redundancy and Call Quality

Disaster recovery (DR) options are expensive and typically unrealistic for most companies that choose on-premise solutions, yet having that redundancy is crucial. With hosted solutions, the right provider can offer cost-effective redundancy options to ensure uptime.

Call quality for on-premise solutions will depend on your carrier. For hosted solutions, you'll need to make sure you have a solid Internet connection because poor Internet can mean dropped calls. However, if you choose a provider that also provides a reliable Internet connection, this won't be an issue you need to worry about.

Infographic comparison between on-premise and hosted PBX voice solutions

Which Solution is Right for Your Business?

When compared side-by-side, it's clear to see the huge advantages hosted solutions offer when compared to on-premise solutions. Interested in making the switch to hosted PBX? At LightBound, we host and manage everything so you finally get a single, simplified source for local and long-distance service integrated with enterprise PBX functionality.

Unlike most phone system OEM’s, vendors and integrators, LightBound is a CLEC, Managed Carrier Provider, and an ISP. Our solution runs over LightBound’s managed network with superior reliability, security, and disaster recovery. And after everything's set up, LightBound is there for you 24/7/365 to ensure continued success.

Want to learn more or find out if hosted PBX could help your business? Sign up today for a FREE, one-hour tech assessment to help you determine the best voice solution for your business.

Click here for your Free Consultation 


February 12, 2018 / by Dane Dittemore