Hosted VoIP versus On Premises VoIP
Author: TheOfficePhone
Hosted VoIP versus On Premises VoIP
There are two major ways to purchase VoIP services, and both have advantages and will yield good results in terms of cost savings and increased features. Once you have made the decision to move to VoIP, then it's time to decide whether you want a hosted service, or wish to deploy on site. The decision-making process is not always cut and dried, so it pays to know in advance how each one works.
Hosted VoIP
A hosted VoIP implementation is the simplest, and can often be provisioned in a single day. Because the actual equipment (except for your phones) is hosted at a third party facility, you don't have to worry about installing and maintaining a PBX. As a result, up-front costs are minimal. Month-to-month costs may still be slightly higher than if you were to run an on-premises system, but still less expensive than using the public switched telephone network (PSTN).
Because a hosted VoIP system relies on your service provider's PBX system rather than your own in-house system, you are much more likely to have a higher-end, powerful, and more feature-rich system handling your calls, and one that is being managed 24x7 by skilled staff. Another advantage is that you are also likely to have a service level agreement and a guaranteed level of performance and minimal downtime, which to any business is quite valuable. When your internal PBX fails, downtime could result in dramatic losses—but your hosted provider is more likely to have a redundant backup, and the ability to get up and running very quickly in the event of a failure.
Another key advantage to hosted VoIP is the ability to scale quickly in response to changing needs, or alternately, to scale downward if you find that you need fewer services and have less capacity requirements.
On Premises VoIP
An on premises VoIP system places all the equipment, including the IP PBX, cables, routers, and other devices directly on your premises. This option is more often used by larger companies that have skilled in-house staff capable of maintaining the equipment on a day-to-day basis. From a cost perspective, an on premises system will be more expensive up front because of the capital expenditures, although on a month to month basis, it will be less costly than a hosted system.
When installing your VoIP equipment, some companies will have skilled internal staff to handle the installation, but more often the equipment will be purchased from a value added reseller or integrator, who will handle the installation process for you. This of course, will add to the overall cost.
The advantage to an on premises system is that you retain the maximum amount of control, and can modify and customize your VoIP system to meet your very specific needs instead of being limited to a menu of options from a third party hosted provider. An open source system will be especially useful in this regard since your in-house developers will have access to the source code for easier modification.
A variation of on premises VoIP is a managed VoIP service, where a third party provider, which may be the VAR who did the installation or another provider, handles all of the management of your on premises system, including day-to-day management such as adds/changes/moves, ongoing maintenance, and remote monitoring. Although this will add to your monthly cost, you will have the advantage of having access to skilled personnel who can handle everything on a remote basis 24 hours a day, and typically will provide you with a service level agreement.
There are two major ways to purchase VoIP services, and both have advantages and will yield good results in terms of cost savings and increased features. Once you have made the decision to move to VoIP, then it's time to decide whether you want a hosted service, or wish to deploy on site. The decision-making process is not always cut and dried, so it pays to know in advance how each one works.
Hosted VoIP
A hosted VoIP implementation is the simplest, and can often be provisioned in a single day. Because the actual equipment (except for your phones) is hosted at a third party facility, you don't have to worry about installing and maintaining a PBX. As a result, up-front costs are minimal. Month-to-month costs may still be slightly higher than if you were to run an on-premises system, but still less expensive than using the public switched telephone network (PSTN).
Because a hosted VoIP system relies on your service provider's PBX system rather than your own in-house system, you are much more likely to have a higher-end, powerful, and more feature-rich system handling your calls, and one that is being managed 24x7 by skilled staff. Another advantage is that you are also likely to have a service level agreement and a guaranteed level of performance and minimal downtime, which to any business is quite valuable. When your internal PBX fails, downtime could result in dramatic losses—but your hosted provider is more likely to have a redundant backup, and the ability to get up and running very quickly in the event of a failure.
Another key advantage to hosted VoIP is the ability to scale quickly in response to changing needs, or alternately, to scale downward if you find that you need fewer services and have less capacity requirements.
On Premises VoIP
An on premises VoIP system places all the equipment, including the IP PBX, cables, routers, and other devices directly on your premises. This option is more often used by larger companies that have skilled in-house staff capable of maintaining the equipment on a day-to-day basis. From a cost perspective, an on premises system will be more expensive up front because of the capital expenditures, although on a month to month basis, it will be less costly than a hosted system.
When installing your VoIP equipment, some companies will have skilled internal staff to handle the installation, but more often the equipment will be purchased from a value added reseller or integrator, who will handle the installation process for you. This of course, will add to the overall cost.
The advantage to an on premises system is that you retain the maximum amount of control, and can modify and customize your VoIP system to meet your very specific needs instead of being limited to a menu of options from a third party hosted provider. An open source system will be especially useful in this regard since your in-house developers will have access to the source code for easier modification.
A variation of on premises VoIP is a managed VoIP service, where a third party provider, which may be the VAR who did the installation or another provider, handles all of the management of your on premises system, including day-to-day management such as adds/changes/moves, ongoing maintenance, and remote monitoring. Although this will add to your monthly cost, you will have the advantage of having access to skilled personnel who can handle everything on a remote basis 24 hours a day, and typically will provide you with a service level agreement.
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