What are the main differences between an on-premises phone system and a VoIP system hosted in the cloud?

For many years the only solution was to have a phone system on your premises. This box of kit connects up all your phone extensions and links them to the phone network, often using PSTN or ISDN telephone lines. You may have seen the acronym PBX (it stands for Private Branch exchange): that’s another name for an on-premises phone system.

Typically, a phone system is a capital purchase with a one-off up-front cost, although you may be able to spread your payments through a leasing agreement. Some customers don’t feel that they’re ready for the cloud, and like to have the security of having the actual phone system located on their premises.

A cloud system, sometimes called a hosted phone system, uses the internet to connect all your extensions to each other and the public phone network. There is no actual physical phone system hardware on site (apart from the phones). The system itself is easy to set up (often with a plug ‘n’ play option).  You usually pay for each user on a monthly basis (at least you do with our cloud-based systems: BT Cloud Voice, BT Cloud Phone, and BT One Phone) so there are no significant up-front costs.

Now, there is a quasi-third option. You can sometimes link to VoIP services on an on-premises system. This hybrid gives you the reassuring presence of an on-premises system with the cost savings of being able to make calls over the internet

So which is best for me?

As you might have gathered, there’s no simple answer to this. Which is best depends on your business, your expectations and requirements, and of course, your internet connection!

For a small business with simple requirements and a stable internet connection, a hosted cloud-based solution offers low up-front costs and a manageable monthly fee. But you also have the choice of an on–premises system, if you prefer to have the actual hardware on your site.

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