Hosted, Managed or Premise-Based: Which Phone System is Best for my Business?

Hosted, Managed or Premise-Based: Which Phone System is Best for my Business?

With the overload of information and options out there, figuring out what kind of phone system is right for your business can be difficult and even frustrating. And of course, you can't count on providers that only offer one type of solution to deliver objective advice, either. Below is a comparison of the three models of phone systems: Hosted, Premise-Based and Managed.

Hosted PBX (Hosted VoIP) Systems

Overview:

Hosted PBX, or Hosted VoIP (Voice over IP), represents the latest wave in phone system technology. With Hosted PBX, the phone system server resides in the provider's data center instead of your office. Voice and data traffic is routed over the public switched telephone network, or PSTN, to the hosted system. Since the system itself is offsite, Hosted PBXs offer Web-based access to configure the system, define how you want calls to flow, view call detail records and billing information, listen to and delete voice mail, and more.

Pros:

  • Cost-effective way for smaller businesses to get rich VoIP functionality
  • Minimal IT involvement needed to install solution
  • Easy, online access to administer features, manage the system, and add/delete users
  • Scales easily in small businesses (Service-Only/Bundled) or larger businesses (VoxScale)

Other Considerations:

  • System improvements and upgrades are performed on the provider's schedule and may not be available when you want or need them
  • Upfront costs can be substantial depending on level of VoIP infrastructure needed and phones that need to be purchased
  • Many providers are startups, so you'll need to decide if you have concerns about whether they'll go out of business or consolidate with another vendor

Premise-Based PBX/VoIP Systems

Overview:

Premise-based PBX and VoIP systems are solutions where the equipment - including phone system servers, cabling and routers - are installed and maintained locally at your company's place of business. System providers are typically affiliated with large, national or multi-national manufacturers with substantial staff dedicated to product development and engineering. This high level of support helps ensure system hardware and applications are constantly updated to meet the emerging needs of the marketplace. Premise-Based systems can be digital, VoIP or a hybrid of both. While many companies want to take advantage of the collaboration, productivity, and mobility solutions VoIP offers, hybrid Digital/VoIP systems (such as the Mitel 5000 system popular with thousands of businesses, including many ETA customers) offer a phased migration path to VoIP for companies without the financial or personnel resources to make the transition all at once.

Pros:

  • Systems and applications can be fully customized to business needs and requirements
  • Internal IT teams can make updates and changes to the system on the fly
  • Ongoing technology updates available to meet emerging business needs

Other Considerations:

  • Substantial upfront capital expenditure required
  • Ongoing provider maintenance fees typically increase annually
  • Repairs, replacement costs, upgrades, and updates can be hefty expenses if not included in a maintenance contract
  • System's business value may never be truly realized because a large number of features are available but never installed or used
  • Hardware is a poor capital investment because it loses nearly all of its value before you sell or dispose of it. By investing working capital into depreciating assets, you eliminate the potential for that money to generate positive cash flow back into your business

Managed PBX/VoIP Systems

Overview:

With managed phone system programs, providers offer all the equipment, software, and technical expertise needed for a company to reap the benefits of the system's functionality without the costs, risks, and headaches of owning the equipment. There are many flavors of managed phone system programs, but the best ones include some level of maintenance, remote access services, fixed pricing for commonly added items (i.e. wireless headsets), end-user training, discounts on future relocations and more. This allows companies to select the technology they need when they need it, eliminate financial risk and cost uncertainties, and get technical expertise and support from a team of specialists with extensive expertise deploying and maintaining the technology to a wide range of businesses.

Pros:

  • Get the benefits of premise-based technology without the upfront costs, annually increasing maintenance fees and replacement costs
  • Round-the-clock access to support and service by technicians and help desk personnel with extensive experience programming, servicing, and deploying the technology in a wide range of business environments
  • Control ongoing costs and reduce financial risk. Programs can include free or discounted software upgrades, technology refresh programs, free or discounted end-user training, site relocation discounts and more
  • Enjoy discounted, fixed price upgrade options for commonly added items

Other Considerations:

  • Internal IT staff not able to make programming changes on the fly
  • Companies with fixed, one time budgets may not be able to take advantage of managed programs
  • Best payment terms based on credit worthiness

We hope this overview helped answer some questions about the difference between Hosted, Premise-Based and Managed phone systems. If you'd like to learn more about the different phone options available, contact our phone provider partner, Expert Technology Associates today to help you make the best business decision for your organization.

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