Hosted or On-Premise? How to decide the next chapter for your business communications


As legacy telecoms technology ages, the skills to maintain it become rarer and more expensive, and essential upgrades cost the earth.  Inevitably, you’re left writing off obsolete systems.  The biggest issue of all isn’t the money it costs you, but the productivity and customer experience benefits you risk losing out on.

So you join the IP revolution and enter a new dimension in communications capability – or perhaps you joined several years ago and the time has come to reconsider your options.  The question is what is best for your business – an on-premise IP PBX deployment, or one that’s hosted in the cloud?

Here are some pros and cons for each, broken down into areas that your business can prioritise.


ON-PREMISE: The fact that sophisticated IP PBX technology will be situated on your premises increases energy and facility costs for housing equipment in the datacentre/comms room, plus it may cost more for external parties to come out and install and maintain it for you.  However, depending on how much internal resource you have available, you can choose to do much of this yourself and lower the bill.

HOSTED: One of the beauties of the hosted model is paying a predictable ongoing cost for your communications, safe in the knowledge that technology experts have your system under control.  Just be careful of entering into contracts where costs can go up unexpectedly, leaving you unable to do anything about it.


ON-PREMISE: In this model, you are in total control of how you use your IP PBX, and how quickly changes are implemented.  The downside is the management burden that this creates, and the focus it takes away from your core business.  Modern IP PBXs have excellent management interfaces that make this easier than ever, but you still shouldn’t underestimate the risks and complexities that you may need to confront from time to time with this approach.

HOSTED: Make no mistake, organisations with hosted PBX deployments still have a great deal of control over every aspect of their communications infrastructure – they just don’t ever get dragged down into the minutiae of periodic software updates and the like.  But it isn’t total and utter control – like you get with an on-premise approach.  You need to decide whether ‘control’ is something you can or want to handle.

Scaling Up

ON-PREMISE: Sizing your choice of IP PBX to match your business needs is a crucial part of getting the on-premise model right.  Then, with total control at your fingertips, adding users and expanding services is straightforward.  The greatest pitfall is managing the complexity that arises as your user base expands.  Over time, if you potentially need to migrate to a new, larger IP PBX platform, this can be more challenging than in a hosted model.

HOSTED: The hosted PBX model comes into its own in a multi-site scenario and to support the dynamic, mobile needs of modern working.  That’s not to say that on-premise models don’t have the exact same capabilities – it just often makes more sense to centre these around a logical nerve-centre in the cloud.

Range of Features

ON-PREMISE: There’s very little – if anything – to choose from between on-premise and hosted in terms of feature sets.  The major difference comes in how new features are added and controlled over time (see above).

HOSTED: A key point about the hosted model is the speed at which you can be up and running using these features, compared to an on-premise approach.  Deployment times can be significantly faster, though – in both instances – good project management skills are essential to plan and execute a successful migration.


ON-PREMISE: Risks are undoubtedly greater in on-premise situations, but in absolute terms there is no reason to be overly concerned about this approach.  For obvious reasons, business communications are extremely sensitive to downtime – think how your company would be affected if all your comms went offline –  so the IP PBX needs to be protected from disaster scenarios such as flood, fire or power outage.  These issues are not insurmountable but do require sound planning and integration with a coherent business continuity strategy.

HOSTED: Hosted PBXs typically reside in hardened, highly available datacentre facilities with failover to secondary disaster recovery locations.  This assures continuity and quality of service.  However, not all providers are alike so be careful to scrutinise their environments to your satisfaction.

Making the move to a new IP PBX system is an easy decision in principle, but making the choice between on-premise or hosted demands a lot more consideration.

Comtec offers both approaches, working with best-of-breed IP PBX vendors like Avaya and Cisco and backing it up with a range of connectivity, business continuity and ancillary managed IT services.  If you’re still not sure about which route to take, we’ll be happy to discuss your needs.