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On Premise vs Hosted VoIP: Which Is Right for Your Business?

You need to call Janet to set up the big business deal. The problem? Janet is in Singapore. How do you call her without busting your company’s budget? VoIP.

You know your business needs voice over internet protocol (VoIP) instead of a traditional phone system. But, should you go with an in-house system or hosted VoIP?

Here we will go over the benefits and disadvantages of both. This way you will be able to make an educated decision about what is right for your business.

On-Premise vs Hosted VoIP: Which Is Right for Your Business?

Before we begin looking at your best business VoIP solutions, let’s learn a bit about the history of VoIP.

The History of VoIP: How This New Tech Came To Be

Way back in the early 90’s people were annoyed. They were being held hostage by the monopoly of standard, hard-wired, phone lines. These landlines charged extra for making calls out of the area. They charged a lot for any sort of international calling.

But, people had to deal with it because there was no other way. You needed a phone and your local phone company was all you had. There were no other choices.

Enter the internet. With the internet revolution, came brand new ways of communication. Suddenly, you could send written communications to anyone in the world instantaneously and free of charge via email. Next, we would see the rise of real-time communication through instant messaging and chat rooms.

The next progression of this real-time communication was VoIP. This magic technology allowed your voice to travel as data packets across the internet. This means you could speak, just as you would on the phone, to anyone in the world at no additional charge. You would only need to pay for your internet provider.

While this may not seem extraordinary now, back then this technology saved people thousands of dollars. Those who had family in another country, or even on the other side of the US, would incur hundreds of dollars a month in long-distance fees. Suddenly, people could make their most expensive calls via the internet and not be held hostage to the phone companies fee schedule. They could use their IP to make their phone calls.

Now that we know about how it came to be let’s start making some tough decisions. Should you use hosted VoIP or go on-premise? Let’s look at the pros and cons of each option.

Hosted VoIP: The Pros and Cons

Let’s break down the pros and cons of this option.

The Pros

The number one pro for hosted VoIP solutions is not having your phone system drain your in-house internet bandwidth. If you have ever called a company only for it to take ages because their “computer is running so slow” you’ll know why this is frustrating. The more systems, hardware, and strain you put on your in-house network the slower it becomes.

In addition to speed, using a hosted VoIP PBX means you don’t have to make a major hardware investment. The cloud VoIP provider can do a lot of the heavy hardware lifting for you. They can even provide the best hardware choices that work best with their systems.

If the provider has hardware options they will also provide professional installation. They will work around your existing office. You will not have to provide a specialized room for the equipment.

The obvious benefit to hosted VoIP providers is the cost. Hosting is far less expensive than bringing in an in-house VoIP system. But, with savings come other considerations.

The Cons

Hosted solutions have their cons as well. If you’re a smaller operation a cloud-based solution without phones or other physical devices could save you a bunch more money. You’ll only pay for what you use on their servers and you don’t have to invest in infrastructure.

VoIP on the cloud is great if your primary workforce is remote or spread out all over the world. It uses cloud programs to manage your network so you can access it from anywhere. All you need is an internet connection and you’re in business.

The con of using a system like this would be the potential for downtime. But, a reputable provider should have fail safes in place to prevent crashes and keep you in business. As long as you ask lots of questions, there is a support team in place, and you are secure with your ability to access the internet you’re golden.

Looking at all the pros of a hosted solution it’s hard to see why you would need an on-premise service. However, depending on your business, in-house IP-PBX could be a viable solution to serve your clients and employees best. But, let’s look at that option now to see if your business would be better served by keeping things in-house.

On-Premise IP-PBX: The Pros and Cons

If you have a large business that depends on deep integrations for call centers, call accounting, real time phone dashboards, and the like an in-house option may be better.

You need to consider how your business runs. Are you constantly running 300 phone lines or more? Does the majority of your business run on phone calls and not online? Is your customer service team primarily phone based with little other option?

If you answered yes to a few of these questions it is worth the expense to install an in-house IP-PBX system. This system would give you limitless line potential and guarantee that you will always be up and running. However, be aware that this kind of system can run into the tens or even hundreds of thousands of dollars. It is phenomenally more expensive than the hosted solutions would be. So, you have to make sure it’s really what your business requires before pulling the trigger.

You also need a lot of dedicated space to house the equipment necessary to support your network demands. You will need a server room since the equipment will be larger than normal and need temperature controlled environments. Large servers can also be loud so soundproofing is a good idea. You can hire a professional installation team to help you with all of this and hard wiring all your devices around the business. Ask this team if there is an additional support that you get with your purchase.

The next step is to make sure your in-house IT team is well-versed on the ins and outs of the specific system you’ve chosen. This way if something goes wrong they will be able to address it.

How to Pick A Good Hosted VoIP Provider

In most instances, a hosted VoIP is going to be the best option for your business. But, how do you make sure you’re using a reputable provider? Do some research and pick someone who knows the game. Research the team of professionals that will make up your core support department. Make sure they are experienced and knowledgeable.

The provider you choose should be able to offer hardware if you need it as well. They can recommend and provide products so you don’t have to research them. Make sure they offer professional installation services for any hardware needs you have. This way you make sure the installation is done right the first time. There should also be a support guarantee should anything go wrong.

Explain your needs fully to guarantee that the provider you pick can handle the network demands of your business. Make sure their cloud system has backups in place and ask what their protocol is if things were to go down. If the network crashes how do you maintain your business? Ask any potential providers about their support team. If you need technical assistance is there always going to be an IT professional available to help? Will you have a 24/7 emergency number to get things back up and running right away?

Make sure you know exactly what you get. Ask about all the different options they provide. There are a number of different setups that are possible. If you don’t ask questions and clarify exactly what you need you could cost yourself money.

Which Is Best Depends On Your Business Needs

As we have seen a hosted VoIP service is going to be suitable for a lot of businesses. But, if you have a large business with lots of phone lines, employees, and a major part of your business is run on the phone than in-house may be your best bet.

You need to do your research. Know your business needs inside and out. Have your numbers figured out. This way when you call providers you can get accurate quotes based on real data.

Either way, make sure you go with a company that is true professionals. Whether they are helping you only with the initial installation of your on-premises system or becoming your cloud VoIP provider they need to know what they’re doing.

Are you looking for a quality hosted VoIP provider for your business? Read more about us here to see if we would be the right fit for you. Let us help you run your business.