Hosted PBX vs On Premise PBX | How to Choose The Right Solution
The key
to successful business is excellent communication. If you have this ability,
you can achieve success in a short period. Every business has its unique
choices in selecting the communication systems. Some go for the traditional PBX
systems, while some prefer modern hosted phone systems.
The new players entering the business industry are confused between traditional and hosted PBX solutions, as both the PBX solutions have different features. For businesses, it is a tough decision to choose between these telephony solutions.
Finding the right PBX system can become
challenging; that’s why you need to understand the difference between both
these services.
Here,
we will explain the concept of both communication systems and their pros and
cons. So, if you are confused about the system that best fits your business,
read ahead:
Hosted PBX
Hosted
PBX is a cloud based communication solution that ensures all communication
activities over the cloud. A third party service provider provides hosted phone
services and is responsible for data security, system upgrades, uninterrupted
communication, and server maintenance.
Traditional PBX
Traditional
or on-premise PBX resides at a business location, and the communication is done
with an IP phone using a LAN. In this, businesses maintain their servers and
take care of the entire communication system. Also, it requires a dedicated IT
team that can resolve issues that might appear during the communication
process.
Difference Between Hosted PBX And Traditional PBX
There
are numerous differences between hosted and on-premise PBX solutions.
Understanding the difference between both will help you to determine the best
solution for your business.
Here is
the quick comparison:
1. Cost Investment
When
you opt for an on-premise system, you also need to purchase new hardware and
compatible software. Also, it requires a vast infrastructure, IT, and
installation cost. Initially, the traditional PBX system incurs a considerable
loss to the business; that’s the reason it is not so much suitable for small
and medium-sized companies.
Whereas,
hosted PBX system has lower initial equipment and set up cost as it is hosted
over the cloud. Also, hosted PBX solutions ensure “pay as you go” plans. Due to
these customizable plans and pricing, it becomes easy for businesses to opt for
communication services. Most companies are switching from traditional PBX to
hosted PBX solution for its flexible plans and pricing.
2. Business Scaling
Businesses
need to scale up or down their telephone lines for various reasons like
increase and decrease in the number of agents or heavy incoming/outgoing call
volume.
In the
traditional PBX system, you are not able to add or remove telephone lines
instantly as you require hardware and dedicated IT staff to scale up and down
the phone lines.
But on
the other hand, hosted PBX solutions ensure easy scaling through which you can
add or remove phone lines instantly.
3. Business Reliability
Business
continuity and disaster recovery are both crucial factors for every business,
as no one wants to lose data. Natural disasters like fires, floods, the
earthquake can make your system fail to work. Also, breaks business continuity
by making computer system completely inaccessible. That’s why it is highly
recommended to ensure backup and recovery in your business.
On-site,
the PBX system can’t assure backup and recovery as data is available only in
inhouse storage. But cloud PBX systems won’t take your business offline as all
the data is available in the cloud that can be easily accessed and recovered
any time.
4. Geographic
Flexibility
Most
businesses want geographic flexibility to target customers globally. On-premise
and hosted PBX, both the systems ensure remote working. But in the case of an
on-premise PBX system, you need to invest considerable costs to facilitate
services in different locations.
Alternatively,
the hosted PBX system does not need any additional investment as you need to
connect with the network & login to the PBX system to start communicating.
Also, it removes redundancy from business operations as all agents have access
to the same pages and data. Agents’ can retrieve or share necessary information
whenever required.
5. Technical Support
The
on-premise system requires dedicated IT staff to troubleshoot day to day
problems of the PBX system. As on-premise PBX systems are hardware dependent,
you need to hire a team of IT members that again increases the upfront business
cost.
The
virtual PBX solution ensures an easy to use platform where the supervisor or
administrator can make changes to the system in just a few clicks. Also, any
significant issue that occurs in the communication process is resolved by the
service provider and does not need any attention from the business side.
6. PBX Installation
The
on-premise PBX system takes much time for installation, as it requires multiple
hardware to start the process.
Alternatively,
the cloud PBX system does not require any expensive hardware to be installed to
start business communication. Businesses can initiate conversations as soon as
they log in to the system.
7. Customer Service
On-premise
systems provide limited features that are not enough for ensuring excellent
customer service. Whereas the virtual PBX system offers a list of advanced
communication features that streamlines your business communication. Features
like voicemail to email, auto attendants, call forwarding, queuing, and
recording provide multiple opportunities to agents that help serve customers in
a better way.
How To Choose The Right Solution?
A study by Markets and Markets says that The global hosted PBX market was valued at USD 4.19 Billion in 2017 and is expected to reach USD 9.50 Billion by 2023, at a Compound Annual Growth Rate (CAGR) of 14.9% during the forecast period.
Now that you know all about both these communication systems, it is an easy choice to make. Analyze all situations and select the right solution for your business.