Great question, and one that is often asked as soon as an organization has a failure with their existing on-premise solution, or if they find that it is time to scale up to accommodate a more sophisticated application like a call centre. The tremendous flexibility and peace of mind that a hosted solution brings to the table is gaining a lot of attention from companies of all sizes.
On-Premise phone systems often come with maintenance contracts that can become void if the software updates are not maintained and up to date. Hosted solutions are cloud based and all of the updates are done via the providers and pushed to their cloud based environment. Another powerful and important factor to note is that the equipment used by a hosted provider is enterprise grade regardless of your companies size, giving even the smallest company access to the best equipment.
Here’s a look at some cost comparisons. The on-premise solution comes with upfront hardware and software costs as well as deployment and training costs, including the time and effort IT personnel pour into monitoring the PBX system. While the hosted solution requires only a low monthly subscription fee, and the training is included. Many organizations are still under the impression that outsourcing their phone system would be great for scalability and disaster recovery, but surely this has to come at a greater expense then an on-premise system.
This is not the case because a hosted provider will provide service to a large number of their clients, which brings the overall cost down per user. This is a Costco style business model of keeping expenses down for the end user thru producing in large quantities to reduce costs. By sharing the PBX with many other organizations you get the highest quality product available at the lowest cost. Budgeting is also simplified to a flat predictable monthly fee, with no equipment to buy and no upfront capital expenditure.
The reliability of a hosted phone system is superior to that of an on-premises system as well. IT personnel are typically not focused on an on-premise phone system that isn’t broken, nor do they have the time to run tests to predict the next failure point on the system. But for a hosted VoIP provider, having their hosted solution go down is not an option. They are highly focused on reliability and withno down time. Hosted providers monitor for potential issues, perform upgrades and look and failure points which takes the worry out of the equation for the client.
A hosted phone system also comes with built in disaster recovery. On the contrary, when a on-premise phone system fails, an inbound caller will either get a busy signal or even no answer at all. This can be a huge expense and blow to an organization to have downtime that looks to the client like they have disappeared! In the hosted scenario an infrastructure failure would have little noticeable impact on the callers telephone interaction with the company. The company would still give the experience to the caller of being an active live company that is open for business. The client would be able to leave a voicemail in the worst of case scenarios, and that would allow the company to retain the clients overall trust and business.
The case for hosted VoIP is definitely strong for small to mid sizes companies due to having no upfront capital expenditure, while still being able to have access to the best technology available. Large companies are also looking at hosted VoIP because of the instant scalability of the model, the built-in disaster recovery and the add-on services available to the hosted solution. Hosted VoIP frees up a companies valuable IT resources to focus on core business infrastructure, and arms a company with the latest most technologically advanced phone system available and one that they can count on to grow with them.