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Premise-based vs Cloud-based VoIP | Which is better? - VOIPE
Premise-based vs Cloud-based VoIP | Which is better?

Premise-based vs Cloud-based VoIP | Which is better?

If you’re considering buying or upgrading to a hosted VoIP telephone system, you may have the consider whether you want it as an on-site/premises-based solution or a cloud-based phone system (where your phones are connected via your Internet, to a provider that maintains the equipment at an off-site cloud data centre.) Here are some of the specifics which may help you decide:


An important area to consider is understanding what features are offered by your provider, as they can vary. In most cases, cloud-based services will be more feature-rich than their premise-based counterparts. This can include features such as call queuing and video conferencing. Some providers may have these for on-site packages, but will cost extra outside of your subscription.

Upfront Cost

Hosted VoIP solutions have low upfront costs and will typically be charged at a monthly fee per user. Using VoIP with an on-site server has a upfront higher cost, but then no recurring monthly fee. In terms of business scenarios; a Hosted VoIP solution will be the best for businesses typically with 5 to 20 employees. Larger businesses with 100 or more employees however, may want to consider a cloud phone system.

Total Cost of Ownership

A cloud phone system will likely have a  low total cost of ownership due to the savings in IT and general tech personnel because your hosted provider will take care of of the hardware and maintenance on their own site. The savings can be substantial in some cases. As always, decided on cloud or premise-based systems will depend on the structure and size of your business.


Consider how much your business could grow in the coming year or two. If you foresee potential for rapid growth you may need to consider how this will impact on your purchase. If you’re going with a premises-based solution, you may want to purchase a larger appliance than is initially needed to accommodate growth. It likely won’t be used to it’s full capacity for a while but if you anticipate more staff in your office as the months roll by, then this may be something to consider. With hosted VoIP, new users can be added to the cloud phone system as and when required.


Purchasing the right phone system is important for the success of your business. There are many factors that come into play when deciding between a premises-based and cloud VoIP phone system. Each has its strengths and weaknesses depending on your current situation. It is wise to consider all options and then decide what is best for you, and your business.

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