Hosted or Premise Based Business Phone System, Which is Right for Your Business?

Many businesses are utilizing old phone equipment that has reached or is close to reaching end of life. End of Life occurs when the phone system manufacturer stops producing the replacement parts and software for a particular system. If your company is in a similar situation and a desk phone stops working or your voicemail system goes kaput, you’re going to need to scramble to purchase a new system or continue down a treacherous path by relying on eBay or some other unorthodox supplier for replacement parts.

If your company chooses to be more proactive (a strategy I would recommend) you’ll be faced with the decision of whether to purchase a premise based or hosted phone system.

First, what’s the difference? Premise based systems reside at a company’s location. I’m referring to the desk sets and the actual system itself. The system is installed in a phone closet, where it’s connected to that business’s phone service. A hosted phone system resides in the Cloud. The company utilizes phone sets or soft phones and then connects to the brains of the phone system through the internet. The hosted VoIP provider typically maintains more than one facility, for failover.

Here are three items to consider before choosing one or the other system:

• Maintenance – does your company have IT people on staff that can keep your phone and computer equipment up and running? If so, and your company resides at a single location, it would probably make more sense to utilize a premise based system. But if your company doesn’t employ IT people or has remote, hard to reach locations to service, a hosted system might be a better option.
• One throat to choke – if you want a single place to go should your company experience any voice communication issues, hosted would be your best option. If you’ve been in the situation where your phone service went down and when you contacted your phone service provider they recommended that you contact your phone equipment vendor, you understand what I am referring to. Maybe you want to avoid all that mess and deal solely with a hosted VoIP provider. A good hosted VoIP company will provide your phone service, equipment and the internet circuit it’s connected to. If there’s an issue, you only have one number to call.
• Taxes – Does your company wish to make a capital expenditure or treat your phone equipment as an operational expense? Typically, hosted phone systems are an operational expense and premise based systems are considered a capital expense. Now, some premise based system providers will let you “rent’ a system, therefore turning it into an operational cost, but I wouldn’t recommend doing that. The rental fees are just below the cost of purchasing the system and they never end. As long as you have the system, you’ll be paying for it.

If your company is utilizing phone equipment that is approaching end of life, contact CarrierBid today. CarrierBid telecom consulting offers both varieties of business phone systems – hosted and premise based – and can help your company determine the best fit. Call CarrierBid today or complete the web form on the right side of this page.