If you are just starting the process of updating your phone system, you may be surprised with all the options available these days. With Voice over Internet Protocol (VoIP) technology advancing and high-speed Internet getting cheaper and more accessible, more businesses are jumping from traditional landlines to VoIP phone systems.
Once you’ve made the decision to go with VoIP, the next step is in choosing whether an on-premise, hosted or hybrid solution is right for you. As an end-user, you get the rich features of VoIP with any of these options, but where these systems differ is in where the main system server is located. Each has its pros and cons but ultimately, understanding the features and advantages of each one can help determine best fit for your business.
An on-premise system often means the hardware equipment resides on location in your office, like a computer equipment room, phone closet or server room. In this setup, your company owns or leases-to-own the hardware, giving you greater control over hardware, software devices and increased customization of features.
Using VoIP with an on-site server has a higher cost upfront for setup, but then no recurring monthly fee. Adding more phones to an on-premise PBX is as simple as purchasing more IP phones. The drawbacks are limited flexibility for scaling up or down and you need in-house resources to maintain and manage the system. In the chance that you lose power or the PBX fails, there may be a period where calls can’t come through without a solid backup plan in place. On-premise is most cost-effective with more users so mid-size to larger businesses are typically the types of companies that go this route.
In a hosted system, calls are converted to a data stream connected via the Internet to the offsite equipment in a central location which provides communication services to multiple customers. The provider is responsible for housing the IP-PBX and handling the technology required to provide the services you’re using.
In your office, the desk sets will plug into a router and the calls, signaling, and features are handled through an IP-PBX server at the provider’s location. Costs are managed with a monthly fee and the only expense involved is purchasing IP phones or making a router or network switch to ensure it is specifically dedicated to VoIP.
With a hosted system, there’s a lower initial cost and setup fee. It’s easy to add extra lines and extend features at additional costs and because a hosted provider has more resources and can offer new feature sets and install patches and upgrades directly, you can get the latest functionality and upgrades pushed out almost immediately.
If you lose Internet or there is a disaster that compromises your operations, it doesn’t halt your operations because calls can be sent to voicemail or mobile phones; the redundancy in an offsite facility means there are safeguards and backup power sources and 24/7 monitoring.
Hosted VoIP is less expensive in the beginning, but may become more expensive in the long run due to monthly payments and a solid internet connection is key to the success of this type of deployment. Keep in mind that overall system improvements aren’t in your control and there’s limited customization. This option is most attractive for businesses with fewer employees as new users can easily be added to the cloud phone system as needed.
Hybrid VoIP is a combination of the above two options and is capable of supporting both TDM (Time Division Multiplexing) and IP communications. Typically, this means a hosted system run on a premise server and hardware, offering the best of both worlds. It’s an option for companies ready to move to VoIP but that don’t necessarily want to invest in rewiring or recabling. In a hybrid solution, the VoIP device can be connected using existing handsets and extension lines through a VoIP gateway.
Hybrid systems are a good fit for companies that have some money to invest but don’t want to outright purchase and manage the entire system. This solution is an inexpensive way of implementing a VoIP system without the costs related to a complete rewire. Generally speaking, hybrid VoIP is suited for smaller businesses.