On Premise Vs Cloud-Based Voice

The definition and difference:

A premises-based PBX solution (also known as an IP PBX) is

dependent on a voice server kept on-site in the

equipment/server closet. Physical phones are located

throughout the office. Calls can route through a traditional

phone company as well as over the internet using SIP trunking.

Hosted PBX is a cloud voice solution where the provider

manages/maintains the voice server in a cloud data center.

The only equipment in the office are physical phones. Calls

route over the internet using SIP trunking.

On-Premise PBX

• Cost – higher upfront costs and set-up fee. Above certain

threshold it might be cheaper to own equipment than pay a

monthly fee, but servicing and maintenance can get expensive.

When using only basic call features with >25 phones per

store, total cost of ownership is less over 5-year period

• Scalability – purchase phones to expand (in addition to any

licensing required). PBX needs to be able to accommodate

growth and possibility of complexity with added features

• Failover – if issue with PBX in store, calling is affected and

potentially down until PBX can be repaired via service

contract

• Features – find Me / Follow Me feature requires adding a

mobility server to each PBX – can become expensive

• Presence, tablet/mobile apps for wireless calling can be

added– usually works together with Find Me / Follow Me for

seamless use across devices

• Maintenance – managed services contract (with phone

vendor) required for software patching and maintenance to

ensure security and uptime.

• Changes to system settings require PBX in store to be

adjusted on-site by phone vendor or internal IT team

• Can leverage traditional phone company service (PRI) for

inbound/outbound calling, or SIP trunks over the internet

> PRI is not affected by quality or busyness of internet

connection

• Handsets do not contain a lot of features/functionality –

providers push users to use the desktop application.

Hosted PBX

• Cost – usually low upfront costs, monthly fee per user.

Typically low total cost of ownership as hosted provider

takes care of server configuration, maintenance and

software patching.

• Scalability – purchased or leased IP phones added to

service plan, picking and canceling numbers and moving

phone system is easy and quick.

• Failover – calls can be rerouted to cell phones if issue with

SIP trunk quality, power at store or catastrophic event.

Safeguards at off-site facility includes back up power

sources, geographic redundancy of data centers,

active-active failover of servers, etc.

• Features – can integrate into CRM for advanced customer

analytics

• Can integrate contact center-life features for advanced call

routing or call analytics for advanced reporting.

• Dedicated internet bandwidth required to maintain high call

quality of SIP trunks.

• Tablet/mobile app allows users to make/receive phone calls

from app over wifi/cellular connections.

• Presence allows users to see who is available and on the

phone within store.

• Find Me / Follow Me feature included – will ring desk

phone, tablet, cell phone all at once or in order.

• Maintenance – no managed services contract required –

provider performs software patching, maintenance, upgrades

of PBX in the cloud.

• Changes to system settings performed through online portal

for remote management.

• Handsets do not contain a lot of features/functionality –

providers push users to use desktop/mobile app