VoIP Guides | Hosted VoIP Vs On Premise

Hosted VoIP Vs On Premise: What’s the Difference and Which Is Better?

For successful business communications, VoIP solutions are the best way to go forward. There are two types of VoIP systems—hosted VoIP and on-premise VoIP. But which one is better for your business?

Hosted VoIP vs on-premise doesn’t have to be a heated debate. You just have to know the main differences and make an informed choice. Another way is to compare the market and get telecoms solutions suited for your business needs.

VoIP phone system

What’s a VoIP solution?

VoIP stands for Voice over Internet Protocol and it allows you to make phone calls over the internet using either a computer and a headset, a mobile device with an app or a traditional desk phone with a VoIP service.

You have two choices when it comes to VoIP phone systems:

  1. Hosted VoIP.
  2. On-premise VoIP.

We’ve talked about what VoIP is before, if you want a more detailed read.

Hosted VoIP vs On Premise: What’s the better choice for business?

Good and reliable telecoms solutions are crucial for any successful business. The technology you use to communicate, be it with your customers or team, can lay the foundation of profitable business communications.

With the ISDN switch off coming up sooner than you think, many businesses have started turning towards VoIP solutions. And so should you if you haven’t already.

Wondering whether hosted VoIP or on-premise would be a better choice for your business? The truth is both phone systems offer many benefits and help you serve your customers better. But let’s see what the differences are when we talk about hosted VoIP vs on-premise.

Hosted VoIP vs On Premise Hosted VoIP On Premise VoIP
Hardware No hardware Traditional desk phones with a voice over IP service
No. of users Unlimited Limited by the amount of hardware on premise
Security Ensured by the VoIP provider User’s responsibility
Maintenance None Depending on the scale of hardware, annual service is usually minimum
Costs Monthly fees:
System fee
License fee for each user
No other additional fees
Monthly fee:
SIP trunk line rental
Additional fees:
Servicing and maintenance (usually yearly)
The costs of hardware needed

What is hosted VoIP?

Hosted VoIP is basically a cloud-based system. That means it’s managed by the VoIP provider. So, there’s no equipment, no services or servers you have to maintain and manage.

Calls you make on your hosted IP telephony system pass through the provider’s server and the provider is responsible for the security of his servers.

Hosted VoIP on a mobile phone

Benefits of hosted VoIP

These are some of the most important benefits of choosing a hosted phone system:

  • Hosted VoIP can fit the needs of all businesses, no matter how small or big or how complicated their communication demands are.
  • It’s the ideal choice for companies that embrace remote working. Hosted VoIP can be accessed from anywhere anytime.
  • It’s highly scalable. Just add users with the click of a button as your company grows.
  • Hosted VoIP is low cost overall. Setup and installation are low cost and done really quickly. You don’t have to pay any maintenance fees for the server since it’s not on-premise.
  • Maintenance is easy. You don’t need a whole specialised IT team. Issues are usually quickly fixed on the back end by the service provider.
  • Hosted VoIP systems are highly customisable. You can pick and choose which features you want for your business, giving you more flexibility and control.

Cons of hosted VoIP

Like with every system and solution, there are always one or two drawbacks. For hosted VoIP, these are the cons:

  • You depend on the service provider to quickly fix issues and reduce your downtime.
  • You absolutely need a reliable network connection. Slow Internet can result in poor call quality.

These two drawbacks can be easily avoided with good service providers. To make sure you find the best ones, compare the market for telecoms solutions.

What is on-premise VoIP?

The name says it all. It means the VoIP phone system is physically installed at your office. So, you have the hardware, or office phones, that facilitates the transfer of calls on site. There’s an on-premise server and calls go through that server over a dedicated voice network connection.

On-premise VoIP is more popular with companies that have an in-house IT department.

On premise VoIP phone system

Benefits of on-premise VoIP

There are a few key points where on-premise VoIP wins in the hosted VoIP vs on-premise comparison:

  • You can customise the platform as you wish.
  • You get total control over data and security.
  • There’s no monthly subscription fee, like for hosted VoIP.
  • For large businesses with high communication requirements, on-premise VoIP is ideal. On-premise systems are probably the best option for a call centre with hundreds of phone lines.
  • The quality of your Internet connection is not as important as for hosted VoIP. You can keep phone calls separate from the internet traffic with on-premise VoIP.

Drawbacks of on-premise VoIP

While it has many advantages, on-premise VoIP has some cons as well:

  • The upfront costs will be significantly higher if you need to buy the hardware as well.
  • You need IT staff or consultant to maintain it.

Are these drawbacks serious enough to make you not choose on-premise? Probably not. And with the right provider, you can be sure you’ll find the best solution for your business. But you need to find the best VoIP provider first and we can help with that.

Hosted VoIP vs on premise—what you should know

The pros and cons of each VoIP system should give you a clearer idea of which one is better for your business. But you might need more information, which is why we gathered the most frequently asked question and answered them for you.

1. Do both VoIP systems work the same?

VoIP calls works basically the same on both systems. Plus, both VoIP systems have more or less the same features. And it’s not just about making calls. Either system can get you conference calling, video calls, file sharing, integration with other systems and more.
The location of the servers is where the main difference lies. And who maintains these servers.

2. What are the benefits of using VoIP for my business?

VoIP is the future of successful telecommunications for any business. As the business telecoms landscape quickly changes, it’s important to secure your VoIP solution as soon as possible so you don’t struggle when ISDN will be completely switched off in 2025.

Here are some of the most notable benefits you’ll get from VoIP:

  • Advanced features like cloud telephony, voice-to-email, call forwarding, conferencing, call recording, auto-attendant and many more.
  • More flexibility as you can own phone numbers worldwide. Remote work is also tons easier with VoIP.
  • Better sound quality which means better customer service.
  • Cost savings because it’s cheaper to install, cheaper to set up and cheaper to maintain. Overall, you’ll experience great cost savings with a VoIP system.

iCompario tip

Future-proof your business communications with complete telecoms solutions. VoIP is a great way to move forward but you should consider business mobiles too. They’re a great addition and highly useful in the fast-paced business environment.

3. Is VoIP worth it for a small business?

VoIP is ideal for small businesses due to its lower operational and calling costs. With a VoIP phone system for small business, you get access to enterprise-level tech at a low monthly rate.

Most VoIP phone systems for small business in the UK come with useful features and functionalities to make your business more efficient and competitive.

4. What’s the main disadvantage of VoIP?

Perhaps the biggest disadvantage of an IP phone system (another fancy word for VoIP) is that it requires a fast and reliable Internet connection. Which is not too hard to get, depending on where you’re located.

You can compare the market to find good broadband deals that easily support your VoIP system.

How do you choose the right VoIP solution for your business?

That’s the easy part. You compare the market with iCompario to find the right VoIP provider for your business.

All you have to do is fill in our online form with a few details about your business needs—which won’t take more than a minute of your time. Then we’ll give you the best recommendations and, once you choose one, we’ll send the details over to the right VoIP provider.

Read more about VoIP on iCompario

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