With an on-premise VoIP system, IP PBX equipment and IP phones are installed on-site and connected to your LAN. You own/administer/maintain all related equipment and software. Calls come to the system from a communications service provider over traditional PSTN (Public Switched Telephone Network) lines—or over your T-1/PRI connections or SIP trunks—and are distributed to VoIP phones.
- Greater control over your telecom investment – Ownership means that hardware, software, devices, messages, records, etc. all remain on your company’s premises. You have tight control over updates and security – and with the system on-site – can quickly address outages and issues.
- Enhanced customization – Applications, system specifications and configuration details can be tailored to your exact needs, which is difficult to achieve with pre-packaged hosted solutions.
- Total Cost of Ownership – An on-premise solution requires a one-time capital outlay. After that, the only recurring costs are for maintenance and upgrades. Your service is managed internally. Generally speaking, companies with 100 or more users at any one location consider this solution to be more cost-effective in the long run.
- Superior QoS – On-premise solutions run on your infrastructure. With hosted solutions, traffic runs on the provider’s WAN, which can compromise quality and reliability.
- Network Convergence – Combine voice and data traffic on the same network to reduce network costs.
- Substantial capital outlay – The initial costs for IP-PBX’s, servers, phones, software and maintenance contracts, etc. are significant. Given the inherent robustness of hosted offerings, many companies feel it is better to reserve capital spending for other projects.
- Requires in-house resources to manage and maintain – Many organizations would rather focus their IT talent on other initiatives. Many IT staffs are limited and can become overburdened with maintenance/management tasks, which can delay upgrades, etc. Delayed upgrades can lead to operating on old versions that may no longer be supported by the manufacturer.
- Limited flexibility and scalability – Routine activities like Moves/Adds/Changes (MAC), adding new system features, configuring remote users, scaling to handle growth or peak call volumes, etc. require IT resources and/or hardware/software upgrades to execute. With hosted solutions, many of these modifications can be done – on-demand – through web-based administration.
- Time-to-solution – On-premise systems can require a lengthy implementation period, and the project is typically complex. Hosted solutions are more rapidly deployed.
- Total Cost of Ownership – Capital outlay aside – annual maintenance costs, additional licenses, hardware replacements and upgrades add-up over time. Company is also responsible for redundancy, downtime and power costs.