Business Telephone Systems

Hosted VoIP

Hosted PBX vs. Premise-Based PBX

The comparison between hosted PBX services and premise-based PBX services can be separated into four categories: Installation, Maintenance, Configuration Management, and Customized Application Development.


Overall, the installation/implementation costs for hosted solutions are almost always lower than for premise based solutions. However, because hosted solutions do have recurring fees, the total cost of ownership on a multi-year basis should be evaluated to determine if this is creates an actual net saving over the planned operational life of the system.


Configuration Management

Hosted solutions allow businesses to concentrate on the areas of their business that they do well, rather than having to expend resources on an area that someone else (a hosted provider) could do better.

Customized Application Development

In the past, one of the weakest areas for hosted solutions was their ability to support customized advanced applications. However, companies like LignUp, Broadsoft, Tekelec, and Sylantro now offer customer site API interfaces that bridge the gap considerably.


It is true that premise-based solutions allow customers to have the most control over their systems, but that control brings with it added costs associated with the responsibility for and management of premise equipment. Because of this, for many customers, the benefits of hosted telephony solutions will be greater than those associated with premise-based solutions.

Finally, for those customers who like the idea of a hosted solution but want to maintain control over certain features, it is often possible to create umbrella solutions that combine both premise and hosted components.