Weighing Up Cloud-Based Phone Systems Vs. On-Premise Options

Weighing Up Cloud-Based Phone Systems
Vs. On-Premise Options

Choosing the right phone system for a business is a critical decision that can influence operational efficiency and cost management.

It involves understanding the differences between cloud-based and on-premise phone systems – each of which offers distinct advantages and challenges.


In this guide, we’ll take a look at both telecommunications solutions and help you make an informed decision on which is best for your business – cloud-based phone systems or on-premise solutions.


Let’s get started.

Cloud-Based Phone System Vs On-Premise: A Comprehensive Comparison

The primary distinction between cloud-based and on-premise phone systems lies in their deployment and operational models.

Cloud-based phone systems are hosted on servers managed by third-party providers and are accessible over the Internet.

This contrasts with on-premise systems, where the infrastructure, including servers and hardware, is housed within the business premises.


Cloud-based systems offer a modern approach to telephony, leveraging the power of the internet to provide flexibility and scalability.

They are particularly advantageous for businesses with a dynamic structure or those requiring extensive remote working capabilities.

On-premise systems, on the other hand, provide a traditional solution where businesses have complete control over their telecommunication infrastructure.

These systems are typically favoured for their reliability and security, especially by organisations that handle sensitive information.


We’ll go into the pros and cons of both solutions in more detail below.

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Cloud-Based Phone System Vs. On-Premise: Pros And Cons

There are many advantages of cloud-based systems, and we’re big advocates for this business solution. We’ll share a few of our favourite pros below:


The Advantages Of Cloud-Based Phone Systems


They require a lower upfront investment, as there’s no need for physical hardware installations. This makes them an attractive telecoms option for startups and small businesses.

Cloud-based phone systems also offer remarkable scalability, allowing businesses to add or remove users and features with ease.

Finally, these systems are ideal for supporting remote and flexible working arrangements, providing access to the phone system from anywhere with an internet connection.


Further reading: What Are The Main Benefits Of Hosted VoIP?


The Disadvantages Of Cloud-Based Phone Systems


However, cloud-based systems have their downsides.

The most significant is their reliance on internet connectivity; poor bandwidth can lead to call drops and quality issues.

Additionally, while they have lower initial costs, the subscription-based model can result in higher expenses over time.

Security is another concern, as data is stored off-site and transmitted over the internet, potentially exposing it to cyber threats.


The Advantages Of On-Premise Phone Systems


Conversely, on-premise phone systems allow businesses to retain full control over their communication systems.

This control extends to customisation, security settings, and data management.

These systems often provide more stable and consistent call quality, as they are not dependent on internet connectivity.

Over time, they can be more cost-effective, given the absence of recurring subscription fees.


The Disadvantages Of On-Premise Phone Systems


The drawbacks of on-premise systems include their high initial setup costs, as they require a substantial investment in hardware and infrastructure.

They also necessitate space for physical equipment and demand significant in-house management and technical expertise for maintenance and upgrades.

Cloud-Based Phone System Vs. On-Premise: Cost Implications

The financial aspect of choosing between a cloud-based phone system and an on-premise solution is complex, yet it’s a key consideration for businesses.

Cloud-based systems are appealing due to their low initial setup costs and the fact that they do not require a significant capital expenditure on hardware.

This pay-as-you-go model, however, can lead to higher operational costs in the long term.


On-premise systems, while requiring a higher initial financial outlay, may prove to be more cost-effective over time.

The lack of ongoing subscription fees and the longevity of the hardware means that the total cost of ownership may be lower than that of cloud-based systems in the long run.

Should I Choose A Cloud-Based Phone System Or An On-Premise Solution For My Business?

The decision between these two systems should be based on a thorough assessment of the business’s current and future needs.

Consider factors such as the size of the business, its growth trajectory, financial resources, IT infrastructure, and workforce distribution – all of which play crucial roles in this decision.


For businesses with a fluid structure or those experiencing rapid growth, the scalability and flexibility of cloud-based systems might be more beneficial.

These systems are also advantageous for businesses with a significant number of remote workers or those without extensive in-house IT capabilities.


In contrast, larger businesses or those with a need for robust security and data control might find on-premise systems more suitable.

These systems are also preferable for businesses with the financial capacity to invest in long-term infrastructure and those with the space and technical expertise to manage such a system.

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How Do I Find The Best Providers For These Solutions?

Selecting the right provider is as important as choosing the system itself.

It involves researching and comparing various vendors, focusing on their reliability, service quality, cost, and customer support.

Seeking recommendations from industry peers and reading customer reviews can provide valuable insights into the experience and satisfaction levels of different providers.

Additionally, businesses should evaluate the provider’s track record, financial stability, and the level of technical support they offer.

At Flotek, we have an unwavering dedication to our customers and their business needs. Take a look at some of our case studies here.

Our Final Word

The decision to opt for a cloud-based phone system or an on-premise solution is a significant one for any business.

It requires a balanced consideration of the organisation’s operational needs, financial constraints, and future scalability.

While cloud-based systems offer modern flexibility and lower upfront costs, on-premise solutions provide more control and potential long-term savings.

This decision should support the company’s broader strategic objectives, ensuring that the chosen communication system aligns with its operational requirements and facilitates growth and efficiency.

If you’d like to discuss your business’s communication solutions, we’re here to help. Get in touch today.

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Malcolm Holland, the Managing Director of Flotek Group

Hi I’m Malcolm

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