Choosing a phone system is a difficult business decision. In most cases, you’re stuck between a large capital expenditure and a lengthy service contract. By understanding how on-premise, on-premise VoIP, and cloud-based phone systems work, you can begin to look for a successful solution for your business.
Here, we’ll help you examine the characteristics of on-premise hybrid, on-premise VoIP, and cloud-based phone systems.
On-Premise Hybrid (Digital/IP) Phone Systems
An on-premise hybrid (digital/IP) phone system provides total ownership of your telephony with a combination of digital and IP services and endpoints. On-premise phone systems require dedicated facilities and equipment, including common equipment units, phone system cabinets, servers, and central processing units. Since you’re the owner of the equipment, you’re also responsible for the maintenance, support, installation, upgrades, troubleshooting, and repair of your on-premise phone system.
Unlike on-premise VoIP and cloud-based phone systems, on-premise phone systems using traditional analog trunks and digital endpoints often don’t rely on a network or broadband connection for call quality. This is beneficial for companies with less-than-optimal broadband connections.
On-premise phone systems can be a greater upfront capital cost for your business. However, there are usually limited reoccurring costs outside of the provider bill and any service or maintenance to the equipment. Additionally, there are often leasing programs available that allow for you to make payments and still own the equipment at the end of your term. On-premise phone systems also have optional network connection and/or application servers available to add more features, technology, and benefits to your phone system without the need to move to an all-IP solution.
On-Premise VoIP Phone Systems
Do you know what VoIP stands for? VoIP, or voice over internet protocol, is an internet-based voice delivery system powered by a broadband connection. This internet protocol is capable of distinguishing between voice packets and data packets transmitted over the connection.
Usually, on-premise VoIP systems have similar benefits to a cloud-based phone system. However, there are some distinct features to point out. Typically, with on-premise VoIP phone systems, you’re required to pay for the phone equipment upfront. With that requirement, you also own the system’s hardware. Just like the on-premise hybrid system, there are often leasing programs available that allow for you to make payments and still own the equipment at the end of your term. If space is an issue, oftentimes you can virtualize your on-premise VoIP phone system to reduce the amount of on-site hardware.
On-premise VoIP phone systems require dedicated power and internet connections for each IP phone. Additionally, your incoming and outgoing calls are transmitted by voice data packets using IP rather than by traditional circuit transmissions. With that in mind, your phone system’s call quality depends on the strength of your internet connection and your available bandwidth.
Cloud-Based Phone Systems
Cloud-based or hosted phone systems have similar benefits to on-premise VoIP phone systems and require an existing broadband connection. However, you typically don’t purchase the equipment upfront. Instead, most providers roll the equipment costs into your monthly recurring seat and user costs. Since you don’t actually own the hardware, the provider is responsible for the system’s maintenance and security. Cloud-based phone systems require minimal on-site hardware other than individual phones.
Instead of utilizing a traditional analog telephone connection, cloud-based phone systems rely on an existing broadband connection to make phone calls—your incoming and outgoing calls are transmitted by voice data packets using IP rather than by traditional circuit transmissions. Just like an on-premise VoIP system, cloud-based phone systems require dedicated power and internet connections. The system’s voice quality depends on the strength of your internet connection and your available bandwidth.
Most cloud-based phone system providers require a contract agreement. The cost associated with a cloud-based phone systems is typically a recurring monthly fee based on the feature set and number of users. Prior to implementing a cloud-based phone system, you should conduct a network assessment to ensure that your internet connection and current bandwidth can support your call volume.
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