The hidden costs of an on-premise PBX
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The hidden costs of an on-premise PBX

21st May 2018
By Candice Choo

When you’re starting to think about setting up or changing your phone system for your business (whether on-premise or cloud-based), it’s important to know everything you’re going to be paying for. And as with all purchasing decisions, different products suit different businesses. Some companies prefer the initial investment of a physical platform that and on-premise PBX system has, whereas others may be put off by those larger upfront costs and choose to go with a cloud-based solution instead. What a lot of business don’t realise, are the hidden costs that come with an on-premise PBX system, so here’s what you need to consider about an on-premise solution and why more businesses are moving towards cloud-PBX for their company phone systems.
 

  1. Flexibility

An on-premise PBX solution requires considerable upfront investment. Although it can be handy to have this initial investment out of the way, because you’re purchasing a system for a set number of years you’ll need to predict your future business needs. As businesses are continually changing, it becomes difficult to add extra lines to your system if your on-premise system is not set up to support it. This is different to a hosted system where you can easily add or remove lines depending on whether your company is upsizing or downsizing.

  1. Redundancy

As its name indicates, an on-premise PBX is located on your company site. In order to maintain business continuity (in case of events like a flood or electrical failure), your system will need to have a back up, which will come at an extra (although necessary) cost. This means keeping a physical copy for backup, which often comes at a cost which is higher than a cloud-based solution.

  1. Capacity

An on-premise PBX relies on servers that usually have a fixed capacity. When they reach maximum capacity the only way to continue using certain features, such as call recording, will be to go in and manually delete some of the current storage, which no doubt will take quite a bit of time. With a hosted phone system however, you won’t have this issue as it’s easily scalable. Being hosted in the cloud means that it’s easy to purchase more storage space with only a few clicks.

  1. Cost of obsolescence

With technology constantly improving and the usual lifespan of an on-premise PBX being seven years, often this means that your hardware will become obsolete. If you are planning on replacing or changing phone system you might want to consider moving to a hosted voice solution to always have up to date technology which integrates the latest features with your phone system. With industries, companies and people evolving at a pace far more than a seven-year cycle, hosted voice ensures you to keep up with new features and technologies that will appear on the market without having to reinvest in your equipment.

  1. Mobility

More and more businesses are moving towards more flexible ways of working, which means that we are now more mobile than ever. Mobile phones are preferred to desk phones and integrating both devices for each user to an on-premise PBX will come at an extra cost. Whereas mobile integration is offered by hosted voice providers such as Powwownow.

  1. Fraud costs

Smaller systems are particularly prone to fraud attacks which can cause a big threat to your security and costs. A cloud-based PBX provider however, runs on a highly secured and protected network where the provider constantly improves their technology and data protection given to their customers. Therefore, your provider can focus on the security and maintenance side of your phone systems and you can focus on your business.

  1. Maintenance of hardware

An on-premise solution will require IT resource for maintenance and support. You can either outsource or keep it in-house but either solution will come at an extra cost on top of your system. This will be resources that will have to be used at the cost of running higher priority projects for your business, whereas with hosted PBX, your provider will take care of the maintenance and the support for you.

  1. Performance

Because the system is located on-site, you will have to invest in all the hardware to get the system of your choice. This will allow you full control of your system and you can set it up and manage it as you like. However, it is important that you think ahead as each feature you will want to add in the future will increase the complexity of your system and require more equipment, which makes future proofing your business difficult to account for changes in your business.
 
To find out more about the differences and the benefits of the on-premise and hosted PBX you can read more here.