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Home » Cloud based or premise based PBX, what's best for you?

Does the cost of managing owned PBX equipment outweigh the cloud based solution?

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The choice of cloud based or premise based solutions for most companies is often one of control versus economics. A premise based system give the highest flexibility in configuration and administration, but for most companies the cost of managing owned PBX equipment outweighs the cloud based solution.

Costs versus Control over a PBX lifespan

  • Physical System or Cloud Installation
  • Configuration and Management
  • Software development
  • Maintenance

PBX Installs

While cloud solutions trump premise based PBX in the area of installation, you need to be sure the associated recurring fees of your cloud solution are included in your TCO over the period you plan to keep your system. When comparing a premise based PBX, keep in mind the life span is likely to be no more than five years- conversely a Hosted PBX solution is always up to date.

Another risk with premise based solutions is the pre install evaluation of your network. With a cloud solution, your provider is more likely to have an experienced person evaluate your network quality to be sure it can handle the solution. In house appraisals might miss bottlenecks or performance stumbling blocks on your networks. Also, cloud solutions have less on-site to go wrong and an inherent reduction of risk as a result.

Ease of Install- while a on-site PBX often requires a forklift upgrade, hosted PBX allows for installations to occur a line at a time in parallel with the existing system. this means that future additions and changes can also be performed on a line basis without a truck roll or associated disruption of business.  

Configuration and Management

The cloud PBX shines in this realm as well with most solutions providing administrative features matching and often exceeding premise solutions. Features may be added on an ad-hoc basis often in seconds. Managing upgrades is handled by the service provider who often will have many years of experience in providing seamless changes and upgrade rollouts. Management of your system as it expands is also handled by your cloud vendor- and those often sporadic bursts in activity won't require a major change to accommodate- depending on the vendor, you should be able to arrange to have a call overflow  capacity on stand-by for much less than a premise system deployment. Consider how often that last line or two in your hunt group actually is used and you see cloud systems are on the plus here.

Software Development

Premise based PBX may have a suite of vendor apps ready to go but many cloud deployments offer enterprise level applications with remarkable flexibility  for a fraction of the cost of premise solutions as the development costs are shared amongst all users rather than a hefty up-front application cost or the cost of hiring in-house staff to write apps connect to an API.

PBX Maintenance

Saving the best for last- the higher reliability and predictable costs of hosted PBX really show when maintenance comes into play, but the lack of recurring costs on a premise solution seems an attractive alternative.  

With a cloud based Hosted PBX you know in advance what expenses to expect- it's not as subject to unpredicted expenses as an on-site solution.

Uptime of a cloud solution is improved as distributed infrastructure and architecture allow for a rapid expediting of service issues. Unlike a premise solution with repairs often requiring an on-site visit and the associated delays, or a dedicated set of technicians on stand-by.

Maintenance costs for a hosted PBX are including in your monthly product fees- there are no extra agreements to execute and hardware and software upgrades are included and managed as part of the service subscription itself and much more easily than any premise solution.

Which to choose?

Your choice in the end comes down to a variety of requirements. For most small to medium businesses- Hosted PBX will make sense and save money.  Larger companies may require the flexibility and control of premise based systems.

Have you deployed a cloud or premise based PBX recently? What other concerns or benefits would you share?

Is a Cloud Based PBX system a good choice for your business? Contact AVATAVA for a no cost PBX consultation.

About the author:  William Laakkonen is a consultant for AVATAVA which first offered cloud services worldwide in 2000. Among many solutions, AVATAVA offer hosted VoIP solutions for small and medium enterprises across the US. 

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