Anavon Technology Group: Hosted vs On Premise vs Cloud Phone Systems- Pros and Cons

Like many things in the 21st century, something as simple as choosing a phone plan has become a major headache for many business owners. There are an almost dizzying array of systems available from a wide range of companies and within each major type of phone system, there are an almost unlimited number of features and options, all with long lists of pros and cons. To help cut through the clutter and mess, there is an overview of three basic types of systems and the pros and cons of each one.

Hosted

A hosted system is an internet based (VoIP) PBX (Private Branch Exchange) system and is generally provided through an internet provider. The positives of a hosted system is that it offers an almost unlimited number of lines both internally and externally and offices around the globe can all use the same system. In addition, an employee working out of an office in Spain can use the same phone number to make outbound calls with that they use at home in their Boston office.

Another benefit of this type of system is that it’s one of the most economical to set up initially, running as little as $25,000. This makes it a great option for small businesses, businesses that are growing or expanding, seasonal businesses or businesses that move frequently for a wide variety of reasons.

One of the pitfalls however, are that if the internet is down, so are your phone lines. In addition, the heavier internet traffic is, the more it will affect voice quality. VoIP lines are also susceptible to all of the same problems that internet based data is, including fraud, viruses and worms, Vishing (VoIP Phishing), SPIT (Spamming over Internet Telephony), call interception, hacking and denial of service attacks.

On Premise

An On Premise system is a Private Branch Exchange (PBX) system that is essentially controlled via an on site computer. It utilizes the Public Switched Telephone Network (PSTN), sometimes referred to as Plain Old Telephone Service (POTS), with makes it far more secure than VoIP systems. The pitfall is that it can cost up to $75,000 in up front costs for installation. Over time, however, there is significant evidence that an on premise PBX system will eventually cost less over a 5 year period than VoIP systems.

One of the pitfalls of this type of system, however, is that it has a limited number of internal extensions and public trunk lines for outgoing calls. If too many people need to make an external call at the same time, they won’t be able to get an open line.

Cloud

Unlike the previous two systems that actually have hardware on site to manage traffic, a cloud service has no hardware to install. This means your phone system can be up and running in a few hours with no service call from a technician or team of technicians. On the other hand, businesses have the least amount of control with this type of system and are completely dependent on their provider for both service and tech support. This type of system is also susceptible to all the same problems existent on all internet systems, such as viruses, Vishing, SPIT, call interception, hacking and denial of service attacks.

Cloud systems are great for micro-businesses, entrepreneurs or individuals that run more than one small business. Not only are they economical, but they can make a business seem much larger than it actually is. These systems generally utilize an 800 number (or 888, 877, 866, 855, or now 844), so even if your business only has one employee, it will seem like a much larger company or corporation. With these systems, you also provide your own phones, so you can also save money on hardware because you don’t have to purchase your phones and other equipment from your phone provider at whatever price they set.

One great thing about phone services today is that there are a wide variety of options for almost all sizes and types of businesses. From single person entrepreneurs to global endeavors, there is a system that is almost tailor made for your type of business. While deciding on the right option for you might take some time and careful consideration, the good news is, there are plenty of options available. With a little study and careful consideration, you can find just the system you need at a price you can afford and you can even find a system capable of expanding with you as your business grows or expands. Looking for a business phone system provider near you? Anavon services all of Northern Michigan and we come to you!