Hosted vs On-Premise VoIP – Which is Better for Your Business?

Wondering whether hosted VoIP or on-premise VoIP is the better choice for your business? Both types of phone systems are great for giving you a private telephone network. They both offer an abundance of features that can help make your office more productive and allow you to serve your customers better. But hosted VoIP and on-premise VoIP each have their own pros and cons, so it’s important to know the difference between the two.

Keep reading to learn more about hosted vs. on-premise VoIP so that you can determine which technology is better for your business’s unique needs. If you’re still not sure which one is best, contact Telco Data – our experienced installers would be glad to conduct a site survey and plan the best telecommunications solution for your business!

What is Hosted VoIP?

First, we’ll discuss hosted VoIP, which is a cloud-based phone system. Calls made on a hosted VoIP system will pass through your provider’s server. Hosted VoIP is a newer technology, and many small to medium-sized companies prefer it because it’s very hands-off – your service provider will take care of all the maintenance and system management for you.

The Pros and Cons of Hosted VoIP

Benefits of a Cloud-Based Phone System

• Hosted VoIP is great for any size of business, from the smallest startup to larger companies with extensive communications needs.
• Your hosted system won’t drain your in-house internet bandwidth.
• Setup and installation costs are low and it’s quick to get started.
• You don’t need an in-house IT staff to manage and maintain the system. Your service provider takes care of everything on the back end!
• Hosted VoIP is low cost! There are no maintenance fees because you don’t have a server onsite.
• It’s very easy to scale your hosted VoIP service to your exact needs, even as your company grows and expands.
• A cloud-based system is ideal for any company that has remote employees, as it can be accessed from anywhere at any time.

Drawbacks of Hosted VoIP

• The service provider has control over the system, so you may not have full control or customization abilities.
• You have to rely on your service provider to rapidly fix issues to prevent lengthy downtime.
• A poor network connection can result in poor call quality.

Despite these potential drawbacks, we highly recommend hosted VoIP as an excellent choice for many businesses! As long as you know about the potential drawbacks ahead of time, it’s easy to avoid having them turn into major problems for your business.

What is On-Premise VoIP?

On-premise VoIP is just what it sounds like: instead of being hosted in the cloud, all the VoIP hardware is located at your physical office. Traditional, on-premise VoIP is not as new of a technology as hosted VoIP, but it still works great for many businesses. Calls go through your on-premise server over a dedicated voice network connection. It is more commonly used by companies that already have an onsite IT department.

The Pros and Cons of On-Premise VoIP

Benefits of On-Premise Systems

• An on-premise phone system gives you full control and customization capabilities.
• On-premise VoIP is great for large businesses with high communication needs. If you have a call center with hundreds of phone lines, then on-premise systems are probably the ideal choice for you.
• You won’t be paying a subscription fee each month like you would with a hosted system.
• Since you have all the equipment on your premises, you won’t have to deal with any price hikes from a service provider.

Drawbacks of On-Premise VoIP

• On-premise phone systems don’t work as well for companies with remote workers because it is limited to your physical office location.
• On-premise VoIP is far more expensive and takes up physical space. You will need a temperature-controlled server room to house the equipment.
• Since installation costs are steep for on-premise systems, you’ll be responsible for significant upfront costs.
• You’re fully responsible for maintenance and management, which means that you’ll need extensive resources and an in-house IT department.

If you don’t mind the capital expenditure of installing a traditional PBX and your company’s IT team can handle the maintenance and support required, then on-premise VoIP could be the right solution for your business.

Hosted vs. On-Premise VoIP for Your Austin Business

A hosted VoIP system is the most common choice for most small to medium-sized businesses. That being said, there are still companies that benefit from an on-premise system. The first and most important thing is to know your business needs.

To figure out which system would benefit your Austin, TX business the most, you should first consider your budget. Consider the costs of installing the system you need as well as the potential operating costs involved. Talk to your IT team and figure out what their skills, resources, and capabilities are. You should also consider whether flexibility and scalability are major considerations for your company.

Talking to a trusted VoIP installer is the best way to figure out what’s right for your business. Telco Data can conduct a free site survey and provide you with quotes for the cost of a new VoIP system. Get in touch with us today to get started or to learn more!

Hosted vs On-Premise VoIP FAQs

Do both types of VoIP do the same thing?

For the most part, yes, you can get the same features in hosted and on-premise VoIP. It’s much more than just voice calls! You can get conference calling, video calling, integration with other systems, file sharing, and much more with either type of system. The main difference is the location of the servers.

Is VoIP based in the cloud?

Yes, you can get hosted VoIP that is completely cloud based with no on-premises hardware for you to manage! It is easy to scale, effortless to maintain, cheap to set up, and great for businesses of all sizes.

How do I choose the right VoIP service provider?

A trusted company with robust support is the best choice. Contact Telco Data to determine the best service provider for your business. Our expert installers would be glad to help you out!