Hosted PBX vs VoIP? Cloud Based vs Premise Based?

Figuring out what kind of telecommunications system is right for you business can seem like a daunting task.  The experts at Teleco can help you make sense of all the choices in the marketplace today.

There are 3 types of telephone system available.  Cloud Based, Premise Based, and the Hybrid Solution.  Each has pros and cons with respect to cost, features, and ease of use.

Cloud Based:

Cloud Based telephone systems, sometimes called VoIP telephone system, are very popular and common today.  Some of the top reasons are:

  • Low upfront cost
  • Great feature set
  • Latest technology
  • Large selection of phones from big brands like Cisco and Polycom and from small brands like Yealink and Aastra
  • Very easy to integrate multiple locations
  • Upgrades and Maintenance are taken care of by provider
  • Very easy to move to a new locations
  • No more Verizon to worry about


However, cloud based systems have several issues that buyers need to be aware of:

  • Higher long term costs for most users. You pay monthly by the phone rather than by the line.
  • Reliability can be an issue.
  • Phones are much harder to use than traditional office telephones.
  • 100% Internet dependant.  If your Internet goes down, your phones go down.
  • No Land line Backup Possible
  • Call quality can be an issue sometimes
  • No major brand cloud carrier
  • Cloud phones are harder to use than traditional telephone system phones
  • No local vendor support
  • Network issues can crash phone system
  • Network upgrades and cabling may be required, especially for optimum call quality
  • Phones don’t last nearly as long as traditional business telephones.  They are more “retail” quality and need to be replaced every 2-5 years depending on the brand.


Premise Based:

Premise based telephone systems, often called PBXs or digital telephone systems, have been around for decades.  They are the most common type of telephone system installed today. There are many reasons the PBX has remained so popular.

  • Rock solid reliability.  PBXs are known to run for years, even decades without any downtime.
  • Best call quality
  • Easiest type of system to use
  • Local vendor support
  • Will work during an Internet outage
  • Major name brands like Toshiba, NEC, Panasonic, Samsung, and more
  • Lower long term cost of ownership.  Pay monthly by the phone line and not by the phone.
  • Built to last 12-15 years
  • Works off of the wiring most people already have in their office
  • No network upgrades required
  • Flexibility.  You can use Verizon lines, VoIP lines, PBX phones, SIP phones, Polycom conference phones or any combination.

However, premise based telephone systems have issues as well.

  • Larger upfront costs
  • Limited choices of phones.  All PBXs use proprietary telephones.
  • Traditionally have used more expensive landlines
  • Local hardware to maintain and upgrade
  • Advanced features can cost extra.
  • Integrating multiple locations more difficult than a cloud based system
  • Often seen a legacy technology
  • Moving to a new location will require vendor support

Hybrid Solution:

That’s where the Hybrid Solution comes in.  It takes the best of both worlds and combines them into a seamless solution.

  • Hybrid systems use premise based phones with low cost cloud based dial tones and optional land line back ups.
  • Best long term cost of ownership. Pay monthly by the phone line and not by the phone.
  • Local vendor support.
  • Ease of use
  • Systems built to last 12-15 years.
  • Major name brand equipment from NEC, Toshiba, and more.
  • You can use traditional PBX or VoIP telephones from brands like Cisco and Polycom
  • No more Verizon to worry about
  • Easy to move your phone number to a new location anytime, even if you move to a new area code.
  • Advanced features like private phone numbers and caller ID control
  • No network upgrades or wiring required.
  • Flexibility.  You can use Verizon lines, VoIP lines, PBX phones, SIP phones, Polycom conference phones or any combination.

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