A lot of buzz is being created regarding hosted phone systems, those systems that only require the business to purchase a phone for each user with the server located somewhere in the cloud. The on premise business system has been around for a while and has costs associated with the purchase over and above the desk phones. Which one is right for your business? Let’s examine the differences then you can make an informed decision as to which system is best for you.
Monthly fees: Hosted systems charge a fee per user that includes a phone line for each user. Insight Technologies system costs start as low as $24 per user per month. This fee is subject to federal, state and local telephone taxes. On premise systems are purchased with capital equipment budgets requiring either a lease or purchase agreement. These system generally begin at approximately $2,500 plus the cost of phone lines from a provider of choice.
Features: Hosted systems offer all of the most desirable feature required in business today. There may be some business requirements that require additional onsite equipment which may exclude the use of a hosted system. On premise system are not constrained by the onsite requirements since the equipment is located within the business. Features such as a contact center or analog phone lines are not available in the hosted model, these features would require an on premise system.
Moves, adds and changes: Hosted systems require only an additional phone when adding new users, additional features can be provisioned for all users or a small subset for a small monthly fee increase. These changes can be done remotely incurring little cost for the business. On Premise systems may require additional cost over the cost of the phone if the system does not have the additional capacity to accommodate the new users or new features. If new boards or licenses are required it may also require a technical installation expert to come on site to perform the upgrade.
Connectivity or bandwidth: Hosted systems require a high speed Internet connection to insure voice quality. There may be an additional requirement for analog telephone lines if a local analog fax machine or other analog devices are required. On premise systems support either internet connections or analog phone lines reducing the mandatory requirement of higher speed Internet or quality of service requirements.
Providers: Hosted systems are being offered by a lot of companies, many just new in the past few years. Insight Technologies with the assistance of its distributor partner performs due diligence on all or our hosting partners. Even though there still remains a risk that a provider may go out of business the systems are very portable from one provider to another. On premise systems use services offered by longer term providers, many of them regulated through state or federal agencies. There is always a risk of providers not being in business but somewhat less with the traditional telephony providers.
Multiple locations: Hosted systems connect their devices through Internet Protocols to servers that allow users to connect the phones anywhere and still perform like they are in the office. On premise systems generally require multiple systems for multiple offices but can connect the systems to share information between offices.
So with all of the information above what is a business to do when selecting the best communications system for them? Our recommendation is if you have less than 10 users you should strongly consider a hosted model, dependent upon the availability of a good Internet connection. If you are a business with more than 10 users we would recommend that review your feature requirements, look at your financial requirements then choose either of the systems that best fit your business. If you have more than 20 users in a single location you should consider an on premise system.