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

Switching to VoIP is a sensible decision for many companies: compared to more conventional telecommunications solutions, VoIP is cost-effective, customizable and scalable. But once you've decided that your company is going to move towards VoIP technology, you still have to decide whether you want a hosted VoIP solution or an on-premise VoIP solution. Neither is inherently better than the other; it all depends on your company's needs and budget.

Desired Features: What Do You Need Now?

Though hosted VoIP solutions can be extensively programmed and customized, they usually do not offer as many features as on-premise solutions. For companies that rely on a complex telecommunications network, an on-premise VoIP may be required. For companies that only use relatively basic telecommunications features, a hosted VoIP service may be a better fit.

Scalability: What Will You Need in the Future?

Any telecommunications system is an investment. For companies who are interested in scaling upwards in the near future, a hosted VoIP service often offers an easier path. A hosted VoIP solution can be upgraded to an on-premise solution at any time and can have additional lines and features added as desired. An on-premise VoIP solution tailored to your company's current needs might have to undergo significant physical upgrades to handle scaling upwards.

Infrastructure: What Can You Support?

If your existing infrastructure is hosted on a PBX or you want to keep existing telecommunications solutions, an on-premise VoIP service could work for you even if it wouldn't make sense to install it from scratch. A VoIP telecommunications company can review your existing technology to determine whether it could be integrated into a VoIP system.

Cost: What Is Your Budget?

Naturally, hosted VoIP solutions are generally quite a bit less expensive than on-premise VoIP services. There is usually a low or no upfront cost to a hosted VoIP solution and the rest of the service is paid for through a low monthly fee. On-premise VoIP solutions require installation and extensive maintenance, which can require a much larger budget.

A hosted VoIP solution is more affordable and easier to manage and maintain, but it may not be suitable for businesses that require a high capacity or extensively customized solutions. An on-premise VoIP solution is usually more expensive and requires some expertise to manage and maintain, but it offers more in terms of raw power and control. For smaller companies, a hosted VoIP service is usually preferable. Larger enterprises may require on-premise VoIP.

No matter which solution you choose, hosted or on-premise VOIP, you need to consider who will be managing it. Keep in mind that with both solutions, monitoring and management can be handled by an experienced external partner.

Image Source: Roland Tanglao