Dominic Norton, Direct Sales Manager for Spitfire, outlines the pros and cons of hosted and on-premise business communication systems.
The benefits of going hosted
Today, hosted telephony provides a far more cost-effective solution with huge benefits for flexible working and business continuity for all sizes of business. Hosted telephony offers significant financial advantages because it requires minimal capital expenditure as billing is based on a monthly service charge, which is tax deductible, whereas capital expenditure on a PBX system is only partially tax allowable. Consequently costs are estimated to be about 50% less than a conventional on-premise phone system.
All businesses benefit from the disaster recovery potential of hosted telephony. If it is not possible to operate from their normal premises, staff still have access to a hosted telephony service from another location.
In operation, hosted IP phone services offer all the features and functionality of a conventional phone system, such as extension dialling, plus a number of additional benefits. The system can be controlled via an on-line administration portal, allowing change of feature set-ups as required, without incurring any engineering charges.
For organisations with remote workers, hosted IP phone systems provide a means of presenting a professional face to the outside world without the need for dedicated or additional business premises. Staff working remotely from home have full access to phone system functionality, just as if they were in the office, and can join in office meetings using the audio and video conferencing facilities of the systems.
Hosted IP is also ideal for multisite operations because colleagues can call each other using abbreviated extension numbers and without incurring public network charges. External calls in to the business can be distributed easily to users over multiple sites, who can also transfer and forward calls to other extensions as a part of a centralised hosted system.
The benefits of staying on-premise
While there is a clear shift towards hosted telephony, there are still circumstances where the more traditional on-premises deployment of a phone system is the best option. Even though there is usually a higher capital expenditure with this route, as the system is usually purchased outright, the ongoing costs of this sort of solution are often much lower than a hosted system, and there is always the option of leasing on-premises systems to avoid any upfront cost.
Despite the multiple benefits a hosted phone system can provide companies operating out of multiple sites, many companies still only have a single site. A company with high staff numbers in a single site can still be served well from an on-site deployment, as the new phone systems available today can provide the same level of functionality, whether deployed on site or in a hosted set-up. New IP-based phone systems, such as leading IP system 3CX, can also be deployed in a virtualised environment. This means they can easily be incorporated into existing virtual environments without the historical limitations of a traditional analogue or digital phone system.
Systems such as this can also be backed up to other locations, such as a data centre, to overcome problems caused by loss of functionality at the premises where the phone system is located.
One of the main drivers for a new phone system in the current climate is to move away from traditional analogue and digital (ISDN) lines for the purposes of cost saving and flexibility. Companies that have invested in phone systems connecting to these lines do not necessarily have to change their system to benefit from Voice over IP (VoIP), such as Spitfire SIP Trunks, as many phone systems can be upgraded to handle this new technology.
Alternatively, a gateway can be deployed in combination with an existing on-site system to make the transition even easier. This approach can also get around the limitation of older style cabling as new IP systems, both hosted and on-site, will need CAT5e or CAT6 cabling in place.
Another important factor to consider is connectivity to the site in question. The performance of hosted systems is dependent on the quality of the internet connection they are connected over. If the connectivity options at a particular location are limited or of low quality, then a traditional on-site phone system with analogue or digital lines may still be the best choice.