VoIP: Should You Own Your System or Go with a Hosted Solution?

The pros and cons for a voIP solution are specific to each organization

VoIP: Should You Own Your System or Go with a Hosted Solution?

For organizations considering a Voice over IP (VoIP) solution, there’s a decision to be made: should their system be hosted or premise-based? In a premise-based environment, the equipment is owned (or sometimes leased), it’s installed onsite and it’s up to your company to manage it. This route has traditionally been more common, but hosted solutions—in which most of the equipment resides at a service provider’s location and the administration is handled for you—are gaining ground. In fact, Infonetics predicts the number of seats for hosted business VoIP and unified communication services is on track to more than double between 2012 and 2016.

The two flavors of VoIP each have their advantages and drawbacks, and there’s a solution available to match just about every company’s needs. But understanding how your organization’s size, location, internal expertise and financial resources play into the decision is critical to selecting the right platform.

Internal Resources

Is your company short on the time or resources needed to actively manage a phone system? Take a look at hosted VoIP. “Someone else is hosting your equipment, and someone else is taking care of all the IT infrastructure that VoIP requires,” says Gonzalo Escarrá, systems engineer at Aqueity, Inc. in Oak Brook, Illinois. Even if your company has a strong IT department, there are cases where they might not have the time or expertise to implement or manage a phone system in addition to the other data systems already under their purview.

Angie Reed, product marketing manager for Switchvox at Digium in Huntsville, Alabama, agrees. “I think initially one of the pros to a hosted solution is that you don’t need to have a robust IT staff on hand to maintain your phone system.” It’s something that can be extremely appealing to any company that doesn’t have—or it still establishing—an internal resource pool. Allowing a hosted VoIP provider to manage your organization’s communication system might be a significant advantage in this situation.

On the flip side, one advantage of premise-based equipment is that administrators have total control over their systems. Many companies like to know that “if there’s an issue, they’re the ones who are going to respond and fix it,” says Kevin Gavin, chief marketing officer at Sunnyvale, Calif.’s ShoreTel. Organizations that have the right expertise in-house might be more comfortable managing moves, adds and changes themselves. “There is a certain amount of control that you get with the physical proximity of having it on your premise and under your direct responsibility,” Gavin says.


Companies that don’t have much cash available to put into their phone system might find much to like in a hosted environment. “There’s less upfront investment that you need to make,” Escarrá explains. Instead of purchasing servers and the other backend equipment needed to drive an on-premise system, hosted VoIP customers simply need to buy the phones that will sit on their employees’ desks. Depending on your provider’s pricing structure, sometimes even the desk phones are included as part of the monthly service fee, leaving only a minimum requirement of cash to get the system up and running.

The cost factor cuts both ways, though—large companies often find that hosted VoIP is more expensive on a recurring basis than an on-premise solution. “As you get beyond a certain size, perhaps somewhere in the 25- to 50-seat range, it can become a little cost prohibitive to do it on a hosted basis,” saysSteve Sokol, marketing director for Asterisk at Digium. One reason is

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Trends & Advice · Business · Control · IT · Tele Conference · Telephony · VOIP · All Topics
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