What is the difference between a Hosted Phone System and a Premise-Based (often called On-Premises) system? Here is a quick breakdown of the basic differences and what they mean to the average business phone system consumer.
2. What Does “Premise” or “Hosted” Mean?
• Hosted – A phone system where the
“brains”(servers and applications) are
housed at your provider’s data centre.
• Premise – A phone system where the
“brains” belong to you and are set up at
your premises.
4. Pros of a Hosted Phone System
•Access to enterprise grade features
•A “pay-as-you-go” low monthly cost
•No system obsolescence (though phones
will need eventual replacement)
•Built in Disaster recovery
•No need for maintenance or upgrades
•Any major issues are handled by your
provider
5. Cons of a Hosted Phone System
•Reliant on internet for connectivity & quality
•Pre-set features – not as customizable
•Payment in perpetuity – continuous monthly
charges
•Built in Disaster recovery
•Changes & upgrades are done regardless of
consent
6. Pros of a Premise Phone System
•Fully customizable – tailored just for you!
•Better ROI for businesses with more than
20 users.
•Works over phone lines – not dependant
on internet quality.
•More features available
•You own it!
7. Cons of a Premise Phone System
•Higher upfront cost (though no longer
necessary with leasing/monthly payment
options)
•You are responsible for upkeep &
upgrades
•Need to set up disaster recovery in case of
emergency.
8. Example Cost Comparison
www.totalcomm.ca
Hosted Premise
Install cost (per user) – $50
Monthly cost (per user) – $29.95
(base model including service plan)
x 20 users = Monthly cost ($599)
+
Auto Attendant ($10 per month)
=
$609 (per month)
Totals:
Monthly – $609 (x 60 Months)
Install Cost – $1000
Total over 5 years – $37,540
Totals:
Monthly – $575 (x 60 Months)
Buyout Cost – $2000
Total over 5 years – $36,500
x20 phones + full backend system
Install cost – $34,500
(Including – service plan)
Cost broken down to (optional)
monthly lease + buyout price:
$34,500/60 months = $575 (per month)
This example is based on a 20 phone system. This is not intended to convey exact pricing.
There are many variables that contribute to phone system pricing which should be discussed
with your phone provider.
9. In Conclusion
As you can see, these are just two different ways of getting the phone
system you need.
As a company that provides custom solutions of both models, we are not
recommending one over the other.
What matters most is that your telecommunications consultants are getting
a thorough understanding of your business, your goals, and your
infrastructure to provide you with a tailor made solution specifically
for your business.
