What are the main differences between a Premises Based PBX compared to a Cloud Based PBX?

March 31st, 2022 by admin

Smiling service representatives seated in a row at long desk answering phones.

Sometimes, one of the most complex decisions that a business leader can make is what to upgrade the company’s phone system to. For example, you might be using an on-premises PBX, but then you have recently discovered it doesn’t adhere to the needs of a remote team. On the flip side, you might have a Hosted or Cloud solution now, but you don’t have time to train all your employees on using the system, or you want more control over a custom voice solution that you and your IT staff can maintain.

As IT experts mull through their options, they often look into a cloud-based phone solution for their organizations. However, beyond the enhanced flexibility and reliability, there are many things to consider.

So, is a Cloud PBX a direct replacement for an on-premises phone system? The easy answer to that question is no. Not all scenarios fit the Cloud Based PBX Voice Solution scenario.

Let’s take a detailed look at the benefits of both a Premises Based PBX Phone System and a Cloud Based PBX Phone System.

So what is an On-Premises Based Phone System Really?

We can talk all day about all the technical aspects of a Premises Based PBX, but let’s keep it short and simple, so we don’t bore you with a ton of intricate details. An on-premises phone system (AKA PBX) is a physical phone system or equipment that is either owned or leased by the business and stored at the business’s main premises or in a data center away from the office.

On-premise phone systems can include on-premise Voice over Internet Protocol (VoIP) and digital setups. They are also backward compatible in case you are still using analog voice services like POTs lines.

Typically, you will be responsible for the upgrades, maintenance processes, and expansion of the system. However, many businesses do choose to partner with a PBX service provider when using an on-premises phone system.

PROs of an On-Premises Based PBX?

  • COST: In the long term, the cost for a Premises Based Phone System is lower because the business will eventually own the equipment over time.

  • FEATURES: Today’s Phone Systems are significantly more advanced than just a few years ago. Features like Collaboration Tools, Call Accounting, Messaging, Contact and Voicemail Storage, Auto Attendant Greetings, and App Integration are just a few.

  • CONTROL: If control is a top priority for your business, an on-premises based phone system cannot be beaten. With On-Premises Systems, without a doubt, you get greater control. Your IT staff will have complete authority over every aspect of the call flow system. Custom solutions can be created that meet your business’s needs – better than anything else on the market today.

So what is a Cloud-Based Phone System, then?

When talking about a cloud PBX, better known as hosted PBX, then we’re mainly talking about a business phone system that runs over an internet connection. You don’t need to have Private Branch Exchange (PBX) equipment in your location – a VoIP provider does it for you. Sometimes, this downside is that you need a high-speed and reliable internet connection for your voice to ride over. If your internet has an outage, your voice will also be down. If your internet gets really slow throughout the day, your call quality will suffer too. This is the most important thing to keep in mind when deciding to move forward with a cloud-based solution.

In short, a cloud PBX provides all the features needed in an On-Premises PBX, such as voicemail, call forwarding, and of course, calling. Instead of setting up a server you have to maintain; you’d use a VoIP provider or voice service carrier for your company’s communications.

PROs of a Cloud-Based PBX?

  • COST: If your business is small, with, let’s say, a few phones, and you don’t mind doing your own call flow maintenance, then a Hosted Solution may be a better fit. Sometimes, there is an option to buy your phones upfront or rent them over time. It still may cost a little more than a Premises Based system – depending on how long you stay with a service provider that is offering the Could Based Voice Services.

  • MOBILITY: Like the Premises Based PBX, Cloud-Based PBX’s have very similar features. Mobility and Mobile App integration can be a deciding factor for a specific business, so this is where this system shines. Text Messaging, Built-In Video Conferencing, Intelligent Call Forwarding, and Voicemail to Email Transcription are almost standard in today’s Cloud-Based Systems.

  • SCALABILITY: Expanding a phone system can be complex, and without a PBX vendor/provider, it’s your responsibility to execute changes without causing downtime. If you opt for a cloud phone system, then your provider shoulders that risk. They can scale your service very fast and effectively. All you do is place the order with them, and you don’t have to do anything. Additionally, software updates tend to happen automatically, so your phone system is always equipped with the latest features and security patches.

Finally, which system is right for your business?

After all this, which one do you think is the winner? Well, that all depends on IT staff, budget, and how much control you need. Which phone system works best for your business truly depends on your needs and staff/vendor limitations. Here is our conclusion:

  • If you are a Small to Medium-Sized Business with significant IT resources that require total control or a fully customized solution, then you should go for an on-premises system.

  • If you are a business of any size looking to stretch your IT budget or don’t have a lot of in-house IT resources, we recommend that you shoot for a Cloud Phone system.

ATEL Communications is a Leader in Business Class Phone Systems in both San Diego, California, and across the United States. We specialize in installing and maintaining both NEC Phone Systems & Cloud Based PBX services. Contact us today and let us help you get into the right Voice Solution for your Business.

Posted in: Business Phone Systems