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5 Primary Differences Between On-Premise and Cloud Phone Systems

Remote worker explaining the difference between On-Premise and Cloud Phone Systems

The decision between onsite and cloud-based phone systems is incredibly important for your team’s ability to communicate and serve customers. Below, we’ll explore the differences in hardware requirements, reliability, total cost of ownership, and remote access capabilities between these two options, to give you the insights you need to make choices to fit your communication needs. 

Hardware Requirements 

Onsite phone systems require a physical PBX device that is installed and maintained the location of your offices. This device connects your phones to the public switched telephone network using copper wires or internet protocol technology.  

With cloud phone systems, your business doesn’t need any additional hardware or software on-site, which is a significant bonus. Instead, these modern systems use your existing internet connection and a web browser to access the phone system that is hosted by a service provider in the cloud. You can use any device that has compatible VoIP software installed, such as a computer, a smartphone, or a tablet. 

As you can see, cloud phone systems have lower hardware requirements than on-site phone systems, which can save you money, space, and time.  

Reliability and Connectivity 

On-site phone systems come with their fair share of vulnerabilities. They are susceptible to natural disasters, power outages, wear and tear, and hardware failures. This susceptibility poses significant risks to uninterrupted communication and operational continuity.  

Moreover, these systems demand regular maintenance and updates, which not only incur costs but also take up valuable time and resources. Additionally, their reliance on the Public Switched Telephone Network (PSTN) introduces variability in call quality and availability, contingent upon geographical location and service provider. 

Cloud phone systems are incredibly reliable. By leveraging the internet to connect calls and host phone systems in the cloud, they can avoid many of the vulnerabilities that onsite systems encounter.  

Geographical redundancy ensures uninterrupted service, with backup servers seamlessly taking over in the event of any disruptions. This keeps you connected to your customers in the way you value most. Approximately 86 percent of customers expect seamless call transitions between channels, emphasizing the growing importance of omnichannel communication facilitated by VoIP. Plus, automatic backups and updates guarantee that the system always remains secure and up to date, without needing any manual maintenance.  

Total Cost of Ownership 

Let’s break down the financial considerations for both onsite and cloud phone systems: 

When it comes to onsite phone systems, there’s the initial investment required for purchasing hardware and software, which can be substantial. Then there’s ongoing maintenance and operating costs, including technician fees and software updates. Plus, every piece of physical equipment has a finite lifespan, so future replacement costs have to be accounted for.  

Cloud phone systems typically have a recurring payment structure, and much lower upfront and hardware costs. This translates to more manageable budget expectations. Eighty-two percent  of companies report cost savings when transitioning to cloud-based VoIP solutions. Additionally, cloud solutions contribute to long-term cost savings.  Businesses can adapt their communication system to evolving needs without paying more to upgrade their systems.  

Remote Access 

Remote work has become more common in recent memory. In response, businesses have sought solutions to support teams and operations, regardless of location. An area where cloud-based phone systems have a clear advantage is in remote capabilities. On-site setups typically lack remote access features, confining users to specific physical locations. Cloud phone systems offer the flexibility of making calls from anywhere with an internet connection. 

The Gibson Teldata Difference  

We at Gibson Teldata provide trusted cloud-based phone systems tailored to businesses of all sizes. Our Cumulus Cloud Phone Systems offer customizable features and scalability to adapt to evolving business needs. Our systems foster unified communications, enabling seamless cross-team collaboration, messaging, video conferencing, web conferencing, and mobility—all on one platform. Our local support with a team of experts delivers hands-on training, 24/7 technical support, and strategic partnership. Contact us to get started.  


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