Looking for a new phone system for your business but confused by telecoms terminology? You may have gathered that an IP PBX would be beneficial to your business but are unsure of the difference between on-premise PBX and a hosted PBX. There are important distinctions between the two, but which is the right choice to meet your business needs? Fortunately, we can break down fundamental differences between on-premise and hosted PBX to help you decide which is best for you.

What is hosted PBX?

Hosted PBX, also known as VoIP PBX, combines the functions of tradition PBXs with Intranet functionality. Hosted PBX is so-called because the telephony provider is responsible for hosting the PBX, as well as installing and maintaining the technology. Your office handsets will plug into a router, and all calls, signalling and features are managed through an IP-PBX server.  The location of the server is with the provider, who charges an all-inclusive monthly fee. Hosted PBX systems can come with advanced, Unified Communications features – allowing for multi-channel communications.

What is on-premise PBX?

On-premise PBX is an IP PBX that is very similar to traditional PBX systems. This means that is located within your premises, such as an IT room in your office building. The main difference between on-premise PBX and older PBX systems is the use of current technology for IP routing, such as a LAN connection. Calls can either go through a private phone company or VoIP using SIP trunking.

On-premise PBX vs. hosted PBX

There are some major differences between the two PBX systems that will help you decide which is better for your business.

Costs

Hosted PBX systems have a lower cost when it comes to initial equipment and setup. Because they are hosted by your provider, who handles maintenance, they also typically have much lower maintenance costs. On-premise PBX systems can be unwieldy, and will usually require a member of your team, such as your IT manager, to use their valuable time ensure its maintenance. Therefore, if keeping initial costs down is a priority for your business, hosted PBX is better for you.

Features

Because telephony providers have more resources for new feature sets than customers, and will handle new feature installation, hosted PBX systems are usually better for keeping up-to-date with advanced features. Cloud-based hosted PBX services also allow for CRM integration, multi-channel communications and features that expand users’ collaborative capacity. If you’re looking for a phone system that offers game-changing features, a cloud-based hosted PBX has the advantage. An added bonus is that your provider will handle patches and upgrades, saving you time.

Which is better for your business?

Larger businesses, with separate IT teams to manage, upgrade and maintain their phone systems may prefer on-premise PBX. This does, however, require an on-premise expert who understands the technology and equipment in depth.   Cloud-based hosted PBX systems have the advantage of being suitable for businesses of all sizes, since they do not require a dedicated on-site IT manager and have accessible price points. Smaller businesses benefit from the low-maintenance patches and upgrades, as well as a simple monthly price-plan, while larger businesses can get scalability from new feature sets. Disaster recovery prevents you from losing any important data in the event of downtime, since this is all stored in the cloud.   For more information on hosted PBX and on-premise PBX, and for advice to decide which is best for you, get in touch with PBX hosting.