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On Premise or Hosted PBX: Which is Better VoIP Choice for BusinessTelecommunication has an irreplaceable importance for the businesses. It is so important to some businesses that they have to provide a dedicated telephone extension to almost every employee to connect with each other. Private Branch Exchange (PBX) is the name of this dedicated connection between the employees of an organization. Traditionally, PBX was supported with the wired connection of phones lines on which calls were routed using switches and servers. In the recent years, as the internet technology developed to deliver the voice messages, the wired connections started to diminish. Now, Voice over Internet Protocol (VoIP) calling is popular among the businesses for its amazing features, such as- network flexibility, smartphone compatibility, etc. With lots of promising features on its side and still being an affordable option, VoIP calling is a clear choice for the businesses. However, the VoIP calling technology has groomed so well that it has some choices per se: On-Premise VoIP and Hosted VoIP. Since the technology is fairly new, most of the decision-makers for businesses are not clear what is the actual difference between the two and hence, they are not able to make their choice. To understand which of these VoIP service is better suited for your business let us first understand them individually. On-Premise VoIP On-premise VoIP service is very much similar to the Traditional PBX but the call connecting network is a LAN-based internet. This VoIP service has all the equipment located physically in the office premises. Hence, the maintenance has to be governed by the business itself. Hosted VoIP Hosted VoIP is a software-based technology in which most of the physical equipment for the PBX connections is located with the service provider at a remote location. The routing of calls is maintained with cloud technology by a service provider. Both of these VoIP services have their own benefits and negatives of usage. This article compares them on various factors that matters a lot for businesses: Setup and Installation As mentioned above, On-Premise VoIP has all the VoIP hardware in their office premises and hence, the setup and installation have to be executed by the business itself. Some of the hardware sellers may help in guiding with basics, but the overall burden lies with the business. Depending on the number of employees to be connected on the network, the complexities may grow. Its counterpart, Hosted VoIP, has a clear edge with setup and installation factor. Hosted VoIP needs a simple installation on the devices at the user’s end. It takes merely some minutes and usually the support staff of the service providers is available to help with that as well. Also, the number of devices to be connected on the network is not a major concern with Hosted VoIP. Cost Evaluation On-Premise VoIP system involves an expensive, but a one-time investment with the hardware setup and installation. For small businesses with low funding capacity, it might not suit well. But it does not demand periodical bills unless your hardware asks for repair. To maintain the smoothness of VoIP operations, you might have to hire a VoIP technician (or even a team). So, that increases the total expense a little more. Hosted PBX is straight and simple. Installation charge hardly costs anything, but then there will be periodic (usually monthly) charges applicable. Depending on your service provider, the charges may be fixed for each period or may vary as per the usage of the service. So, which is better with the cost evaluation factor? Hosted VoIP looks luring, but it has been noticed that in long term consideration, On-Premise VoIP is more cost effective. So, if you have a handy investment available then going with the On-premise VoIP can be a better bet. But, saving the hardware cost with Hosted PBX is not bad as well. So, it would not be wrong to say that bout for ‘Cost Evaluation’ ends in a tie. Performance and Maintenance Maintenance is easier for Hosted VoIP because most of the concerns are taken care of by the service provider. On the other hand, On-Premise VoIP is all on the business to handle. However, VoIP is blessed with the easy maintenance feature. So, it would hardly be a considerable deciding factor between different VoIP options. But the performance of VoIP service is critical for the businesses and this is a dicey situation. Hosted VoIP looks good because most of the service providers claim to be best with the service. At the same time, if On-Premise is your pick then it gives you complete control of customization and adoption as per your business needs and thus optimizes the performance to the best. Security All the calls made on VoIP are recordable. Hence, the first thought will favor the On-Premise VoIP service, but on a deeper analysis, the scenario changes. The reason for which is that most of the business have a tendency of taking data stored on the office premise lightly. However, when a third-party is hosting the data, it is likely to give in the best with security to maintain its service standards and market reputation. Most of the service providers have a strict data encryption policy that is usually better the security practices followed by businesses. So, Hosted VoIP has better chances of assuring the security and privacy of the calls made on the PBX. In case, you have got some real security experts at your service the scene might change. Conclusion: The assessment of Hosted VoIP and On-Premise VoIP on four factors results as 2-1 in favor of Hosted VoIP with one factor ending in the tie. However, if you are an owner of an MNC, then these results might not be very true for you. For a big established firm, it is easier to invest, get the proper security checks implemented, and find the perfect team to deliver performance from the On-Premise VoIP. But in the case of SMBs, Hosted VoIP is more than just amazing. It allows the expertise of service providers to maintain the PBX without much of hassles so that they can concentrate on their business. About Author Nishant Kadian is an explorer of Cloud Hosting and its unending applications for the business. He believes in the world with least hardware, endless mobility, and interminable connectivity. This belief entices him to learn the abilities and the limitations of Hosted PBX and with TheRealPBX blogs, he shares his learning. As a community-building service, TMCnet allows user submitted content which is not always proofed by TMCnet editors. If you feel this entry is of inferior quality or wish to report it for some reason, please forward the URL to "webedit [AT] tmcnet [DOT] com" with your comments. |