On-premise vs Hosted VoIP Phone System for Your Business

Woman on phone taking notes

VoIP phone systems offer huge advantages for today’s businesses but buying a VoIP phone system can be difficult. Educating yourself on the benefits and potential challenges that come with using either an On-premise or Hosted VoIP phone system can help you make a good decision to ensure your business needs are met and you get the greatest value for your investment.

One critical decision that must be made is determining which is the best fit for your business.

Are you going to choose an On-premise or Hosted VoIP phone system for your business?

On-premise VoIP phone systems reside in places such as computer equipment rooms or phone closets and Hosted VoIP phone systems reside in a cloud or off-site data center. While location is the biggest difference, there are many factors to consider before making your final choice.

Here are 4 key factors to consider when purchasing a business phone system and trying to decide between an On-premise or Hosted VoIP phone system.


On-premise VoIP phone systems typically have a lower total cost of ownership compared to Hosted VoIP phone systems – especially as your business grows; however, Hosted VoIP phone systems have a lower setup cost and no maintenance fees.


Hosted VoIP phone systems have numerous features but aren’t very flexible if you need something that’s not available by default. An On-premise VoIP phone system can be customized to fit your exact needs.


Hosted VoIP phone systems are worry free when it comes to upkeep as the maintenance process is handled by the provider. Either someone in your office or your phone technician must provide maintenance to an On-premise VoIP phone system.


On-premise VoIP phone systems can work with landlines, analog circuits (PRI) or SIP Trunking. This is the best choice if you plan to use your existing phone service. On-premise VoIP phone systems are also the best choice if you need to integrate with an intercom or PA system as well. Hosted VoIP phone systems don’t offer many options for these types of installations.

Purchasing the right phone system is important for the success of your business

There are many factors that come into play when deciding between an On-premise or Hosted VoIP phone system. Each has its strengths and weaknesses. To make the best decision, sign up for a free consultation with one of our engineers. We will provide you with additional information, tips and advice regarding your communications needs to ensure you end up with the best VoIP phone system for your business.

Starting your search for a better phone system?

Download our Beginner’s Guide to learn how VoIP can help your business.



One Comment
  1. A hosted VoIP phone system does indeed offer many benefits and represents a sensible model for many organizations. However, that doesn’t make it the right approach for everyone. With an on-premises system, you choose the technology, own the infrastructure, and retain complete control of your system. There are pros and cons of both hosted PBX as well as on-premise PBX. The move to an IP-PBX business phone system is beneficial regardless of which system is ultimately chosen. The VoIP service provider of the hosted PBX charges a monthly fee that is inclusive of a minutes package and potentially certain features.

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