December 16, 2020

Benefits of on-premise Phone Systems 2020

Bones Ijeoma

CEO and co-founder

On-premise phone systems offer many advantages over cloud-based solutions. Find out how they can improve your business communication and security.

Business owners can often be found reminiscing about the best phone system for small business. The two most popular choices are on-premise phone systems and cloud based phone services. There are plenty of best on premise VOIP system options to choose from. Although the on-premise phone systems come with a larger upfront cost to set up the service, they are still recommended because of the reduced risk of security issues and the large degrees of customizability. Before making the decision between on premise phone system vs cloud, it is important that you compare the benefits, features, pros and cons of both so you can make the right choice depending on the needs of your business. Many people assume that on-premise phone systems are outdated and no longer have any sort of VOIP features and benefits, in reality, they are still quite relevant and are used by many small scale businesses around the globe.

on-premise Phone Systems

There seems to be an ongoing debate about whether on-premise or cloud based phone systems are the most appropriate choice for businesses and enterprises. After all communication is the backbone for any enterprise and it is important to ensure uninterrupted connectivity at all times. If you are someone who is going back and forth about cloud vs on premise phone systems this article will prove to be extremely helpful for you. We will go over the details of both cloud as well as on-premise phone systems and compare them to analyze the benefits of on-premise phone systems 2020.

What is an on-premise phone system?

on-premise phone system

On-premise phone systems are also known as PBX. This term simply refers to a physical phone system that is owned by the business itself. The phone is available on the business’s premise and the business is responsible for the maintenance, upgrade and overall upkeep of the phone system.

An on-premise phone system has a lot to offer for the businesses. From digital setup to voice over internet protocol services, a diverse range of features can be associated with a best on-premise phone system. When a business opts for an on-premise phone system they get the full control over the features and the extent of the services and settings of the phone. It means there is more responsibility but at the same time, the degree of customizability is worth the effort.

What is a cloud phone system?

On the other hand, the cloud phone system relies on internet connection rather than the traditional analog phone communication channels. The internet connectivity ensures that you can easily communicate with people from all around the globe. There is no restriction based on the location of the clients or the business. Since internet connectivity is easily available, therefore, businesses can communicate with their clients with ease.

Another perk associated with the use of a cloud phone system for business is the reduced cost. When compared with an on-premise phone system, the cloud phone systems seem to be a far more affordable choice. In case of a cloud phone system, the service provider is responsible for the upgrades, fine tuning and other settings of the phone system. There is not much room to customize the service according to the needs of your business but since everything is the responsibility of the service provider, the business does not have to put in any effort in this regard.

On-premise phone systems vs cloud phone systems:

On-premise phone systems vs cloud phone

Now that we have briefly discussed both on-premise as well as cloud phone systems, we can now move on and address the elephant in the room which is hosted vs on premise phone system which one is a better choice. Here is a detailed comparison of both a premise based phone system and a cloud based phone system.


When you opt for an on-premise phone system, the payments have to be made upfront. Not everyone who will be reaching out to you via the phone service is a valuable customer. There are plenty of calls that you might be receiving that may prove to be redundant and unnecessary at the end of the day. But since you will be paying upfront, you will have to bear the cost of these calls as well. Moreover, you will determine a specific number of callers to pay for. Changing this number of callers as the needs of your business fluctuate might be hassle in case of using an on-premise phone service.

In case of a cloud phone system, the businesses only have to pay for the features that are actually being used. Therefore, growing the extent of the services or contracting them is easier. Therefore, making use of an on cloud phone system is better for businesses whose needs keep fluctuating.

Scope Of Offices:

If your business is divided into multiple office locations, you will have to make sure that the offices are connected and can communicate with ease. On-premise phone systems can allow connections over remote locations but the connection requires special hardware arrangements and can be expensive.

But if you opt for the cloud based phone systems, connecting remote offices will be extremely simple and easy. You can simply make use of one cloud phone service provider and have them connect all your offices using the same line.

In a nutshell, if you have a small scale business that comprises a single office, the on-premise phone system would be sufficient enough to meet your needs. But in case your office setup is divided amongst different locations, connecting them via a cloud phone system would be the better option.

Extent Of Controls:

Another significant factor that you need to take into consideration when determining whether you should go for an on-premise or cloud based phone system is the extent of controls you require. If you want to take control of every setting and features, opting for the on-premise phone systems would be ideal for you. On-premise phone systems are completely managed by the business itself. Therefore, you have the freedom to customize the extent of the services as you like.

However, if you are someone who does not mind a more generalized phone service, you can choose a cloud based phone system. The controls and settings will be in the hands of the service provider but you can always reach out to them in case you want to make any change.

Tech and IT Department:

As already discussed earlier, an on-premise phone system is demanding and you have to take care of all the technical details and responsibilities yourself. If you have an established tech and IT department that can manage the best on-premise VOIP phone system, you should undoubtedly prefer the on-premise phone setup.

However, if you are in the initial phase of setting up your business and therefore do not have a dedicated team or department that can manage the phone, it is better for you to invest in a cloud based phone system. In case of the cloud based phone system, the service provider will be responsible for the upkeep and the maintenance of the phone and alteration of the services to meet the needs of your business, therefore, this option is the best for the businesses which do not have a team to look after the phone.


The cost is a factor that can be divided into two main categories. The first type of cost is the money that will be spent on setting up the service. It is known as the initial setup cost. The initial setup cost in case of a cloud based phone system is lower. This is because you don't need to invest in a lot of hardware to avail this facility. The charges are based on the number of phone lines that will be used on a monthly basis and you can always choose to downgrade or upgrade your package based on the needs of your business. The payments are also scheduled on a monthly basis and the fee includes all the relevant charges like the maintenance and the upkeep expense etc.

On the other hand, the initial setup cost can be higher when setting up an on-premise phone system. This is because the company has to spend money on acquiring the relevant hardware and ensuring that everything is maintained. Some money will also go towards the IT team or department which will be responsible for the smooth running of the on-premise phone system.

Therefore, it is obvious that the on-premise phone system is an expensive choice. It comes with a lot more expenses as well as responsibilities.


As indicated by the name itself, the on-premise phone system is available only within the office premise. Therefore, the employees and the administration can have access to the phone while they are in the same building where the phone system has been deployed. Many on-premise phone systems can be modified to allow remote access but it does come at an additional cost which not many businesses are interested in bearing.

However, the hosted or cloud based phone system is remote. This means that the employees can always stay connected with one another and with the customers or clients as well. The employees do not have to be restricted to the office in order to make use of the phone service.

In terms of productivity, ease of access and mobility, the cloud based phone systems are therefore better and highly recommended.


When you choose a cloud based phone system, the security of the data and the features etc. is in the hands of the service provider. Therefore, it is critical for the business to be vigilant and choose the right service provider in this regard. Make sure that the service provider makes use of two step authentication and encryption to ensure that the data remains secure and free from any risk.

However, in case of a cloud based phone system, the business’s IT department or the team handling the services is responsible for the security. This gives the businesses freedom to choose security protocols and ensure a foolproof mechanism to secure the phone’s data.

If you choose the right service provider, security would not be a concern. But when you are trusting a third party for this service, the security risks are higher as compared to the on-premise phone systems where the business itself can take care of the security.

Data Recovery In Case of Disaster:

Cloud based phone systems have the data stored on a cloud storage location. Therefore, the recovery of data in case of a natural or physical disaster is easy. But this is not the case when an on-premise phone system is taken into consideration. All the data is stored within the office location. If anything was to go wrong or the business meets any disaster, the data recovery will not be an easy task. And in some cases, it might even be impossible for one to be able to recover the data.  If you want to opt for an on-premise phone system and ensure that your data also remains safe, make sure that you backup the data regularly to have a disaster recovery plan at hand. This will prepare you to deal with any type of unplanned disaster.


Both on-premise and cloud based phone systems have their own pros and cons. Which option is the best for you depends on the scope and needs of your business. The choice of an on-premise phone system is well suited for you if you want to have full control over the service and can take the responsibility of managing the phone. The major benefits of an on-premise phone system is the degree of customizability as well as the fact that security is not a concern. Moreover, if you have a small scale business where the need of remote based phone systems is not a concern, the on-premise phone system will be an optimal choice for you. It may come with a higher upfront cost but in the long term, it will be a great investment that will benefit the business greatly.