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Differences between Hosted and On-Premise PBX

Source: https://www.3cx.com/pbx/hosted-vs-on-premise/

There are many points to consider when making a business communications upgrade and it’s probably a good idea to start with whether to go hosted or on-premise. This depends on a few factors; the size of the company, existing infrastructure, available budget, management resources, and what they wish to gain from their PBX.

To make a decision, it’s important to understand the differences between the two and the benefits that each option could provide.

Hosted PBX

A hosted PBX allows you to retain control of your phone system whilst remotely hosting the software from either the vendor or a third-party hosting provider. This is a great option for smaller companies who may not have the infrastructure available but still want to manage their communications.

Host your PBX in your cloud account with the likes of Google, Amazon and Microsoft Azure or have it hosted by 3CX.
Maintenance, operation and installation costs are reduced and possibly even avoided.

You get to choose your hosting provider and SIP trunk provider for a tailored solution that fits your needs and budget.

Cloud PBX

SaaS Diagram

Cloud and hosted are often used interchangeably but when talking about specific deployment options, Cloud refers to a managed service. With a Software-as-a-Service (SaaS) subscription, companies can go hosted with their communications system and have the management, maintenance and upgrades all taken care of. This is the preferred deployment for SMBs that have limited IT resources.

A third party provider handles the PBX and all responsibility of running and upgrading the Hosted PBX is shifted onto them.

There’s no need to worry about any network issues, like bandwidth, with a Cloud PBX; especially important for SMB’s that don’t have the bandwidth to accommodate Unified Communications and VoIP.

Dedicated personnel to manage the phone system are not required; less costs.

No training required on how to run the phone system, how to add extensions and so on. The PBX provider does all of that for the end user.

All upgrades are included in the maintenance costs and are automatically done by the PBX provider.

On-premise PBX

On-Premise Diagram

An on-premise PBX is deployed on servers belonging to the business, and thus is managed by them entirely if they so wish. For this type of installation, the company must have in place the appropriate infrastructure, including servers, network, devices and so on, or they must factor this into their budget. On-premise PBXs are more suited to larger enterprises that have the infrastructure and resources to run and manage the phone system, and are possibly in sectors that require strict security and confidentiality.

The end-user has more control over their phone system.

Ideal for large organizations that already have the infrastructure, bandwidth and network setting required to host their own phone system, unified communications platform and VoIP.

There’s no need to rely on the support of a third party PBX provider for simple tasks like adding extensions.

All the phone system data and settings are in the end-user’s hands.

Third party support and maintenance can still be acquired by the PBX reseller if the user wishes.

How to choose between on-premise & hosted/cloud

Choosing whether to go on-premise vs. hosted or full cloud service largely depends on a business’ infrastructure and resources. If you already have sufficient infrastructure in place, which is able to cover network, security, power and servers, and are happy to utilize it for your communications, then an on-premise PBX is a solid choice. Just keep in mind that, even if you purchase a support and maintenance package from a third party, you will still need an IT administrator on-hand who can run the PBX and perform small daily tasks.

If you’re looking to scale back resources spent on management of such services, then a hosted or cloud solution is ideal. The only thing to consider is how much control of your communications system you want to keep. If your company has a team with the skills and knowledge needed in order to run and maintain a software PBX, a hosted solution is a great way to outsource your hardware and infrastructure needs whilst still keeping control of the PBX’s data and settings. Another factor to consider is your internet connectivity. For most companies, this is a non-issue as high speed internet is widespread. However, for company’s in areas with limited access, an on-premise solution might prove to be more reliable.

Further reading

What is a hosted PBX?

What is a cloud PBX?

What is a PBX phone system?