Because cloud-based software offers real advantages over the alternative, many business owners have looked to cloud-based solutions for their telecommunication needs. A cloud services provider can take over various telecom services, which can be beneficial across all industries. But, setting up an IP phone system that runs on the company’s own network could be the right option for some businesses. The benefits of making the leap to an IP phone service you own can be substantial, but should you build your VoIP services? Compare the pros and cons of each option, then consider the specific circumstances that make an on-premises system the right choice.

Comparing Cloud Services and On-Premises VoIP Options

The core of any business phone system is not the phones but the private branch exchange (PBX) system that routes calls. Phone companies traditionally operated analog PBX equipment to serve their customers. VoIP phones that communicate with digital signals have begun replacing analog phone systems, but they still use an IP-PBX (Internet Protocol Private Branch Exchange) to route those digital calls. As with those legacy analog phone systems, almost everyone outsources telecom services.

Some organizations prefer to have their own phone system. An on-premises IP-PBX system is a phone system that is physically located on a company’s premises, and its maintenance and management are done in-house by the company’s IT staff. On the other hand, a cloud services solution is hosted and managed remotely by a third-party provider and is accessed over the internet. An IP-PBX gateway carries calls to and from the business. It may need to be supplemented by additional hardware, for example, an audio-conferencing bridge or an analog-to-SIP gateway. Companies with numerous analog devices may have to invest in one of these converters to keep those legacy devices running.

Deciding Whether to Host or Outsource

The primary consideration in the purchase versus outsource decision may be the cost, as setting up your VoIP services comes with some added expenses. Those costs may make sense regarding other business benefits of having your own PBX. The decision between an on-premises IP-PBX and a cloud-based solution will depend on various factors, including the company’s size, budget, security requirements, and need for customization.

Companies with many employees, complex call flows, or require advanced customization of their phone system may benefit from an on-premises IP-PBX system because it offers greater control and flexibility, allowing for more advanced configuration and integration with other on-premises systems. This factor is critically important for companies that build their marketing or other functions around enterprise software like Salesforce, Microsoft Exchange, or Sage cloud-based accounting.

Conversely, smaller companies with fewer employees, limited IT resources, or a need for greater scalability and flexibility, may benefit from cloud services. Cloud-based solutions typically have lower upfront costs and require less maintenance, as the provider is responsible for updates and upgrades.

Additionally, companies with strict security requirements or handling sensitive information may prefer an on-premises solution, as they have complete control over the security and management of their phone system. DirecTech offers HIPAA-compliant IP phone services. Regulatory compliance and cybersecurity are only two of the operational things you want to consider when buying a phone system instead of outsourcing.

A few companies may have special considerations in choosing hosted versus on-premises. If your business uses temporary facilities, such as a tax preparation firm, a hosted solution may be better because the service can easily scale up or down as business needs change. If you plan to move within the next year, a hosted IP business phone system might be better because you don’t have to disconnect, move, and reconnect as much hardware. Some companies rely on legacy analog devices like postage meters and fax machines. Other businesses have access control systems that cannot be operated via IP phone lines. Those companies need to either replace the hardware, often not a cost-effective move, or go with an on-premises PBX.

Ultimately, the decision between an on-premises IP-PBX and a cloud phone system depends on the specific needs and requirements of the company in question. It is essential to carefully consider these factors before deciding, as the choice will significantly impact the company’s communication infrastructure and operations.

Numerous Factors Affect the Build or Outsource Decision

Hardware and software requirements, cost, security considerations, and the company’s strategic direction are some of the variables that determine whether building your own business phone system makes more sense than using cloud services managed by DirecTech. Some companies can save money by running their own VoIP services, but security and flexibility are also important considerations. If you want to talk about setting up an on-site IP-PBX for your organization, we can help. Call the VoIP experts today to help you pick the best IP phone system solution for your company.