Business man holding his cell phone.

On-Premise Phone Systems vs. Cloud Phone Systems


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Host on-premise or on the cloud? This is a common consideration for many business owners and communication managers looking to upgrade their enterprise’s phone system in this digital era. 

This guide will explore the key differences between these two communication systems to help you decide which one is best for your operational model.

What makes cloud systems different from on-premise systems? 

Traditional systems involve the on-premise installation of linking all company phone extensions and subsequent connections onto public phone networks. Advanced on-premise phone systems also incorporate VoIP services. 

Cloud-based systems, on the other hand, facilitate the linkage of a brand’s network of phone extensions using the internet. Where on-premise systems use desk phones, cloud phone systems utilize softphones. 

Advantages of cloud phone systems vs. on-premise phone systems

Here are a few benefits you can expect when investing in a cloud phone system:

  1. Scalability: The most noticeable upside that cloud systems have over traditional systems is the degree of scalability they give businesses. It allows for service adjustments following seasonal and industry fluctuations.

    What’s more, cloud phone systems allow for automatic installation of updates, unlike traditional phone systems, which need manual upgrades that could be time-consuming and cause downtime.
  2. No Installation Costs: You don’t have to invest heavily in the initial installation or PBX maintenance — as is the case with on-premise systems. Cloud phone systems don’t require significant capital outlay, making them suitable for a wide range of businesses, especially start-ups and small businesses. 
  3. Flexibility: With cloud phone systems, your team doesn’t have to work from the office. They can perform anywhere with access to good internet. Remote working offers your team more flexibility to plan out their day, making them more productive. 
  4. Quick and Easy Call Management: Cloud phone systems come with extra features that allow your team to organize and manage business calls. Besides streamlining your processes, this enables you to easily collect data from your customer base.  

Advantages of On-Premise Phone Systems vs. Cloud Phone Systems

Some businesses still prefer on-premise solutions versus their cloud-based counterparts. Here are some of the advantages of on-premise phone systems:

  1. Control of Communication by Management: On-premise systems allow for on-site controllability by communication managers and business owners but will most likely require someone trained to do so. A cloud-based phone system can be easily configured and maintained by anyone, and changes can be made on the spot.
  2. Stable Voice Quality: While today’s cloud phone systems have top-notch voice quality, they can still be affected by a range of external factors that degrade communication quality. These factors include bandwidth, network configuration, and the type of devices used. Ensure you have the right network requirements before making the switch and look for vendors with financially-backed SLAs.
  3. Cheaper to Setup (but look for hidden costs): On-premise systems usually involve a one-time payment during installation but can cost you more in the long run with maintenance and downtime. Conversely, cloud systems typically require clients to pay a monthly hosting rate and upfront costs for the endpoints but can be cheaper overall.

Scale Up Your Business with Reliable Telephony Services

For reliable, unified telephone communication systems that’ll help drive collaborative partnerships for your small or medium-sized enterprise, reach out to us at Yeo & Yeo Technology. Whether you’re looking for seamless on-premise telephone system installation services or a fully integrated cloud-based phone system, we’re here for you. 

Information used in this article was provided by our partners at Intermedia.

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