Cloud vs. Premise-Based: What is it?

With all of the information and different options in the marketplace, determining the best type of phone system for your business can be overwhelming. One of telecom’s hot topics is “cloud (or hosted) versus premise-based” – but what does that mean? Below we explain, in layman’s terms, exactly what hosted and premise-based phone systems are.

Cloud (or Hosted) Systems
Hosted PBX, or Hosted VoIP (Voice over IP) – also referred to as cloud systems – embody the latest phase in phone system technology. With a hosted or cloud system, the customer does not own or house the physical server in their office – instead, the phone server resides in a service provider’s data center. Since the system itself is offsite, hosted solutions use web-based access to configure, manage, and maintain the system.

Companies pay a monthly fee to use and access the Hosted PBX. Typically, this monthly fee includes access, features (voicemail, call forwarding, eFax, etc.), maintenance, and upgrades. In some cases, providers allow you to purchase phones that are certified to work with the hosted system, with the cost of equipment wrapped into your monthly fees to avoid upfront costs.

Some of the key benefits of a hosted/cloud solution are:
• Updated VoIP functionality can be acquired by smaller businesses in a cost-effective manner
• IT involvement to install and maintain the system is minimal
• Hosted systems are easily scalable for both small and large businesses

Premise-Based Systems
With premise-based PBX and VoIP systems, the physical server resides on the customer’s site, along with all other hardware associated with the phone system. Equipment can be maintained by the customer, requiring knowledgeable internal IT staff, or serviced by the provider through a maintenance contract.

Equipment for premise-based systems is purchased up front, with companies owning all of the hardware. This means that there can be a substantial upfront cost associated with a new system, in addition to any monthly fees associated with network infrastructure and equipment maintenance.

The main benefits of a premise-based system are:
• Companies can fully customize systems and applications to meet their specific business needs and requirements
• Updates and changes to the system can be done in real-time by internal IT staff
• Cost of the system is upfront, rather than recurring monthly

Now you know what hosted and premise-based systems are, but how do you determine the solution that is right for your business? A Parallel team member will be happy to discuss your options in further detail – just give us a call or email sales@paralleltech.com for more information.