Cloud PBX vs Onsite PBX: What’s the difference?

Cloud PBX vs Onsite PBX: What’s the difference?

Have you heard the terms Cloud-PBX and On-site PBX? Did one make you scratch your head while the other made your mind race with possibilities?

If so, then this post is for you. You'll learn the core differences between the two, their unique benefits, and significant factors to help you choose which fits your business best.

What is a Cloud-based PBX?

With a Cloud-based PBX, a service provider manages your system off-site and delivers it via an Internet connection and desk phones are the only piece of hardware you’ll need to buy.

And in addition to providing voice services, the hosted service provider takes care of all updates and maintenance, but you still have some control over the system.

The majority of hosted voice solutions charge by the minute or on a subscription basis with minute packages.

Benefits of a Cloud-based PBX

Should your company opt for a cloud-based PBX phone system? There are certainly many attractive features here. Here are a few of the benefits you might enjoy:

• ● Reduced Set-up time
• ● Instantly add and make available new lines.
• ● Users can connect using desktops, smartphones, or VoIP phones, offering some of the best device flexibility.
• ● Less on-site management of hardware resources.
• ● Extremely affordable.
• ● 200+ customizable features
• ● An highly scalable solution.

What is an On-Premise PBX?

With an On-premise VoIP solution, calls are routed through traditional phone lines as well as SIP trunking.

With this solution you purchase and own the phone system hardware, networking, server equipment, etc. and this is kept on your premise.

This in turn means that your IT staff manage all the necessary updates and system maintenance. Your hardware will be installed and used locally, at your office or data center.

Benefits of an On-premises PBX

If you’re weighing the benefits of a PBX that is kept and maintained on your premise instead of hosted by your providers, here are some arguments in favor of that:

• ● Long-term costs are lower with premise PBX.
• ● Possibility of cost savings thanks to SIP trunking.
• ● Owning your own network, server systems, and keeping them on-site gives you more control.
• ● Freedom to choose the level of protection that best satisfies your needs.
• ● Your IT security team can implement their own solutions.

What’s the core difference between Cloud/Hosted PBX and On-premise PBX?

A Cloud PBX system is a virtual phone system that provides calls through an internet connection and is hosted on the Cloud, whereas an On-Premise PBX is a closed-off network of phones within a business that routes calls through traditional phone lines and SIP Trunking.

This is just one of the many key differences between Cloud-based PBX and On-Premise PBX.

While On-premise PBX systems keep all of their equipment on-site, Cloud PBX systems don't, with the exception of VoIP phones, in contrast to the On-Premise solution, which requires your IT team to manage your system, Cloud PBX takes care of all system updates and maintenance.

How to choose between a Cloud-hosted or On-Premise PBX?

Unsure of which PBX solution will work best for you? Depending on your business model it may be difficult to decide which solution suits you best between on-premise PBX or Cloud PBX.

While both provide unique benefits, we’ve found the following four factors helpful in considering which is best for your business:

1. What is your preferred pricing model and budget?

The upfront cost is one of the main distinctions between on-premises and cloud PBX.

This is because Cloud PBX typically uses a more affordable model, with less expensive monthly or annual fees, initial equipment costs, and setup costs, all of which result in lower initial startup costs.

Service providers offer a variety of subscription plans with various licenses, features, and minute bundles.

In contrast, the hardware and interface cards (if required) for the on-premises option must be fully paid for up front in order to ensure complete ownership of the system.

2. Do you prefer full control of your business phone system?

Ultimately, it comes down to choosing between responsibility and control. More management of the system entails more responsibility for its ongoing maintenance.

Housing your PBX system on-site means you have full control of business communications.

Given that your service providers can alter it as necessary, it might be a better fit for businesses with complex and changing communication requirements.

You can also still use traditional phone lines in the event that Internet service is interrupted to prevent serious service interruptions.

3. Do you employ remote workers or have multiple offices?

As unified communications have become the wave of the future, many on-premise and cloud solutions can now offer mobile and desktop softphones in addition to a full range of unified communications features, such as VoIP, conferencing, collaboration, unified messaging, and more.

By combining every employee's phone extension under one system, a cloud PBX system can connect the headquarters with outlying offices and a small number of teleworkers.

While an on-premises PBX can manage multiple offices and remote users, it may be a little more complicated and expensive than a cloud-based solution.

4. Is your IT staff capable of maintaining the system?

If you choose the on-premise PBX solution it's important to know that your IT team will be in charge of installation, upgrades, and maintenance.

Therefore, you should assess their IT capabilities before investing in a premise PBX.

For small businesses and start-ups lacking in technical resources or expertise, a cloud-based hosted phone system leaves system management to the service provider, which leaves you and your team to focus on generating revenue.

Final Thoughts

Both on-premises and cloud PBX are efficient and dependable phone systems, but when you choose between the two, you need to consider what best fits your business model.

Keen to experience the business phone system wave of the future without committing? Request a live demo from a top-rated Cloud-hosted PBX service provider