Choosing Between On-Premise Phone Systems and Cloud Phone Systems: Here’s How

Choosing between traditional and cloud-based phone systems is a common concern among business owners and communication managers seeking to update their phones in today’s digital age. Reports show that 85% of employees use multiple communication devices to communicate at work, but is today’s workforce using the right tools to communicate efficiently?   

From on-premise to cloud-based phone systems, we’ll explore the world of business communications below. 

On-Premise Phone Systems: Are they Worth It? 

An on-premise phone system is a communication solution where all the hardware and software components are physically located within your office. Unlike cloud-based alternatives that operate over the internet, on-premise systems rely on your internal network infrastructure for communication. 

Let’s delve into the key Components of On-Premise Phone Systems: 

  • PBX (Private Branch Exchange): PBX is responsible for managing internal and external calls, call routing, and other communication features. It serves as the central hub for all your phone-related activities. 
  • Physical Hardware: On-premise systems involve physical components such as desk phones, wiring, and networking equipment. These components are directly installed and maintained within your office. 
  • Control and Customization: One of the standout features of on-premise phone systems is the level of control they offer. You have the ability to customize features, settings, and security protocols to meet your specific business needs.  

What are the Advantages of an On-Premise Phone System? 

Despite the belief that on-premise phone systems will soon be off the market, organizations continue to utilize on-premise phone systems. Why? We’ll explore some of the advantages below.  

Full Control Over Hardware and Software 

On-premise systems can be advantageous for businesses that prioritize data security and compliance. Since the hardware and infrastructure are located within your premises, you have more direct control over the equipment. 

Enhanced Security through Internal Management 

With software and hardware being managed internally, you can have complete control over your data and can implement security measures tailored to your specific business needs.   

Suitable for Businesses with Strict Data Compliance Needs 

On-premise systems offer businesses greater control over their communication data. Since all the hardware and infrastructure are located within the company’s premises, sensitive communication data remains under the direct supervision and management of the business. This control is essential for compliance with industry-specific regulations and data protection laws. 

What are the Disadvantages of an On-Premise Phone System? 

While advantages do exist for on-premise systems, which is largely why they’re still utilized, it’s essential to acknowledge why many organizations opt for modern alternatives. Let’s delve into some drawbacks of this traditional technology below.   

High Upfront Costs for Hardware and Installation 

A notable downside of on-premise phone systems is the significant upfront investment needed to get the necessary hardware and cover installation expenses. Not only does it involve the cost of the physical phone units but also the associated networking infrastructure and other essential components. 

Lack of Disaster Recovery and Redundancy 

On-premise phone systems often lack robust disaster recovery and redundancy options compared to cloud-based solutions. Maintaining communication continuity can be challenging in the event of a natural disaster, power outage, or other unforeseen disruptions. 

Limited Remote Accessibility 

On-premise systems can pose challenges when it comes to remote accessibility. By 2025, 32.6 million Americans will work remotely. The business world has changed, and the ability for employees to stay connected and communicate from anywhere is crucial. On-premise systems may require complex configurations or virtual private networks (VPNs) to enable remote access, which can hinder seamless communication for remote and traveling employees. 

Maintenance and Upgrades are Time-consuming and Costly 

Maintaining an on-premise phone system is not just a one-time investment—it involves ongoing costs and effort. Regular maintenance, troubleshooting, and updates demand dedicated resources, including IT personnel who are skilled in managing the system. 

Limited Scalability 

Scalability can be a challenge with on-premise systems. As your business grows and you need to add more phone lines, extensions, or features, the process can be complex and time-consuming. 

What Is a Cloud-Based Phone System and Their Role in Future-Proofing Businesses  

Cloud will be the preferred tech consumption model by 2024 in North America. As more and more businesses migrate towards cloud phone systems, you may have found yourself wondering what all the buzz is about. But what is a cloud-based phone system? A cloud-based phone system is a modern communication solution that operates over the internet, allowing businesses to manage calls, messages, and other communication features through a centralized online platform rather than relying on traditional on-premise hardware. 

Now that you know what a cloud-based phone system is, let’s talk about what makes them so great. Yes, a traditional phone system has some advantages, but the negatives significantly outweigh it, and many seem to be migrating towards the cloud. Why are so many business owners making this transition? Because various advantages can benefit your organization, including the following: 

Lower Upfront Costs  

One of the primary benefits of cloud phone systems is their cost structure. Unlike on-premises systems that require significant upfront investments in hardware and infrastructure, cloud phone systems operate on a subscription-based model. This means businesses can avoid the substantial initial costs and instead pay a predictable monthly fee. Cloud telephone systems can trim initial costs for startup businesses by roughly 90 percent. 

Scalability & Flexibility  

Cloud phone systems are designed with scalability and flexibility in mind. As your business grows or experiences fluctuations in communication needs, you can quickly scale the system up or down to accommodate changing requirements. Adding new users, phone lines, or features can typically be done with minimal disruption, allowing your communication infrastructure to align seamlessly with your business’s evolving demands. 

Automatic Updates and Maintenance  

Keeping communication technology up to date is essential for optimal performance and security. Cloud phone systems relieve businesses of the burden of manual updates and maintenance. Service providers manage these tasks, ensuring that your system remains current with the latest features and security patches. 

Reliability and Business Continuity  

Cloud phone systems often operate across multiple data centers, enhancing reliability and redundancy. In the event of a network outage or technical issue in one location, calls can be seamlessly rerouted to another center, minimizing disruptions to communication. 

Remote Work Enablement  

The rise of remote work has highlighted the need for communication solutions that support flexible work arrangements. Cloud phone systems excel in this area by enabling remote and mobile employees to access communication tools from anywhere with an internet connection. 

Advanced Communication Features  

When thinking about what is a cloud-based phone system, its advanced features stand out. Cloud phone systems often come equipped with a wide range of advanced communication features, including call forwarding, voicemail-to-email transcription, video conferencing, and more. These features contribute to improved collaboration, enhanced customer interactions, and streamlined workflows. 

Examining the Disadvantages: Do Cloud-Based Phone Systems Have any Flaws?  

Naturally, cloud-based phone systems also have some disadvantages. These include potential reliance on stable internet connectivity and a subscription-based model. However, these minimal drawbacks are easily outweighed by the convenience, flexibility, and cost-effectiveness that cloud phone systems bring to modern businesses.   

What Factors Influence the Decision to Make the Switch? 

  • Company size and growth projections: Evaluate current and projected number of employees and communication needs as your company grows. 
  • Budget considerations: Assess the financial resources available for communication technology investments, including upfront costs and ongoing expenses.  
  • IT infrastructure and expertise: Determine the capabilities of your IT team to manage and maintain the chosen communication system, including hardware, software, and troubleshooting.  
  • Data security and compliance requirements: Consider the industry regulations and data protection standards your business must adhere to, and ensure the chosen solution meets those requirements. 
  • Remote and mobile workforce needs: Take into account the communication requirements of employees working remotely or on the go and choose a system that supports their connectivity needs. 

How to Make an Informed Decision for my Business 

 To choose the best communication solution for your business, consider the following steps: 

  • Assessing Business Requirements and Priorities: Understand your unique communication needs, employee roles, and customer interactions to determine the features and capabilities you require. 
  • Comparing Costs: Initial Investment vs. Long-Term Expenses: Balance the upfront costs of implementing a system with the long-term savings and benefits it offers to ensure a favorable return on investment. 
  • Evaluating Scalability Options: Anticipate future growth and assess whether the chosen solution can seamlessly accommodate your business’s expansion. 
  •  Weighing Security Concerns Against Convenience: Analyze the level of security your business demands against the convenience and accessibility offered by the solution. 
  • Considering Integration with Other Business Tools: Explore how well the communication system integrates with your existing software tools, enhancing overall efficiency and productivity. 

By considering these factors, you can make an informed decision that aligns with your business’s unique communication needs and goals. 

Ready to Make the Switch? Complete Computers Has You Covered 

If it’s time for your business to make the right choice and upgrade your phone system, we have you covered. Contact Complete Computers today, and let our expertise guide you towards the ideal solution for your business. We can help fulfill your needs, whether it’s on-premise or a cloud-based phone system for small businesses. Ready for real change? Give us a call today!