Hosted vs. Premise

Hosted or Premise?

A lot of businesses these days find themselves faced with tightening budgets and outdated phone systems deployed 10 or more years ago. I speak with these types of businesses every day; owners or IT administrators looking at exploring whether or not a VoIP system is a good fit for their organization and how to approach putting a system together or approaching a service provider.

While hybrid solutions exist and the use of a VoIP gateway can allow many companies to deploy VoIP using their existing infrastructure, most people I speak with these days are interested completely replacing their existing phone system.

For this there are two ways to approach this project:

• Hosted VoIP Phone Service
• Premise VoIP Phone Systems

Each of these solutions bring with them benefits. How substantial these benefits are to you, will of course depend on your situation.

Let’s look at the three main points to consider when looking at how each solution would benefit your business.

Cost Flexibility Support

The benefits of going with a hosted VoIP phone service include a lower entry cost and the ability to let your IT Staff be your IT Staff and run your network, not your phone system. Your features are relegated by the plan that you select when you choose your service provider.

The majority of organizations using hosted services receive support from the provider. If you are a business without an IT staff you have the opportunity to ‘point the finger’ back at your hosted provider for some help with any configuration issues or if something were to ever go wrong.

The benefits of a premise based VoIP phone system include a lower total cost of ownership and the ability to pick and choose what features you would like to implement and develop on your phone system. Many businesses that are looking to go this route are integrating an ERP or CRM system together with the phone system to allow for a smoother work flow and increased level of customer service.

You are typically supporting yourself with premise based systems, but many of the manufactures offer very good phone and email support options. If you are running asterisk or a variation of asterisk you have more limited support options, and should probably count on having your IT department spend a little more time setting up and managing the phone system.

Cost of Dialing

When first examining VoIP people usually picture an internet cloud and dialing out through the cloud until your call reaches its destination. VoIP that is illustrated like this, over the WAN, is a great way to reduce costs on long distance calls but does not necessarily result in large savings unless the majority of calls are long distance or more noticeably international long distance. Hosted providers typically have flat rates for international, domestic, and local calls but still allow you to utilize features that result in greater productivity.

Premise based VoIP systems allow for a little more variety. Your business can choose between integrating PoTS lines, T1 or PRI connections or using SIP Trunks. You can take advantage of using your existing analog lines (they have been around for over 100 years and will probably be around for another 100 years) and still use a premise based VoIP system. Businesses utilizing existing analog lines are generally not looking to save money on their phone bill but are looking to take advantage of the features of VoIP (think of this as VoIP on the LAN).

There are also many service providers that offer T1 or PRI at very aggressive rates and will still interface with your premise based system. Many businesses look to integrate SIP trunks on a premise based PBX which allows them take advantage of reduced calling rates and the possibility of eliminating analog lines. Premise based VoIP phone system users will often mix and match these multiple ways of receiving dial tone to increase redundancy and decrease cost.

Cost Versus Features

Cost is just one component when choosing between a hosted provider or premise based system. Each provider and phone system offers its own set of unique features. After you have created a budget, the features on the phone system /provider will differentiate one over the other. A closer examination of these features will allow you to make the decision as to which option provides the best value for your business.  Unified Communications is the buzz word in the industry, and an important issue to review for Hosted or Premise-Based.  See the teXium Unified Communications page to explore the benefits of UC.

Summing it up

Each VoIP solution brings with it a unique set of benefits, and also potential disadvantages.  While it is easy to talk in general about how the different solutions can benefit your business, the best way to discover and decide on the proper solution is my speaking with a knowledgeable professional who can listen to your unique position and provide guidance from there.

When you are ready to choose a platform for your business, contact the teXium team to find the best option available!