In businesses and organizations across the world, rooms once humming with wires, black boxes and blinking lights now sit empty. In a lonely phone closet, there’s only dust, a single lonely terminal, or perhaps a foosball table where IT pros can let off steam.
The cloud – and more specifically, cloud hosted communications – is the source of the transformation, which has fundamentally changed the IT landscape. Some IT pros have embraced it. Some are working on migrating to hosted PBX systems over time. And others, through choice or necessity, are sticking with an on-premises PBX approach.
Read on to find out why some IT pros are shopping for game tables to go in empty server rooms while others are untangling wires and watching blinking lights—and which cases make the most sense for each approach.
Cloud Communications for Dummies: Download your complimentary copy >
Budgeting for hosted PBX vs on-premises PBX systems
How are we going to pay for this? It’s the question on every IT pro’s mind. And with shrinking budgets and rising demands on IT, it’s a question that gets harder to answer every year.
With an on-premises PBX approach to business communications, an IT pro can often save on phone system costs in years when they don’t have to replace hardware or conduct major software upgrades. They bought the phone system. Now it’s doing what it was designed to do.
However, IT pros can be caught off guard with unpredictable cost spikes when upgrades, replacement or expansion are required. The larger the business, the larger these costs. And as much as they try to plan for PBX technology hardware upgrades, replacement cycles are getting shorter and capabilities are advancing at an ever-increasing rate.
On-premises PBX servers can simply stop working with no regard for whether an IT pro budgeted a replacement. And when an integrated system undergoes an update, they can be caught with surprise compatibility problems that force an unplanned upgrade.
Even sudden business growth can wreak havoc with IT budgets, which may have predicted lower system usage rates. And costs for expanding, replacing or upgrading an on-premises PBX system are not scalable—they’ve got to be done in big blocks all at once.
Some IT pros prefer the relative predictability of cloud hosted PBX costs. Most cloud communications providers charge on a simple per-user basis per month, quarter or year. The company using the system won’t get the budget breaks they do with an on-premises system, but they also won’t have large, unpredictable spikes in costs.
The business grows? The hosted PXB system can grow with it—and not in awkward blocks that leave periods of strain and periods of underused capacity.
Replacing, expanding and upgrading hosted PBX vs on-premises PBX systems
Thanks to Moore’s Law, technology is advancing at an exponential rate. And business communications systems are not immune from this.
With on-premises PBX-based systems, IT pros know they must account for frequent planned replacement just to keep up with industry standards. And they know that sometimes, even if they can get away with older system hardware, the requirements and compatibility of new software may force their hand into upgrade or replacement earlier than expected. Unexpected projects like that are precisely the kinds of things that get in the way of the proactive projects most IT pros would like to pursue.
The IT pros that are gravitating toward cloud hosted PBX systems enjoy the fact that their hardware is never out of date and they never have to replace it. They’re no longer relegating technology to landfills every year.
Software updates are included and compatible with most cloud communications systems, and new applications are frequently added to expand capabilities. They also appreciate that scaling their phone system with the business is a simple as adding a user license—no complicated guesses on future capacity needs or improvised interim fixes required. No latent capacity.
Supporting BYOD with your PBX solution
With more flexible work arrangements and more powerful electronics available to the general public, users are getting more and more insistent on using their own devices. The more the expectations grow, the more pressure there is on IT to support those expectations.
It’s tough enough to keep up with business cycles, but it doesn’t compare to keeping up with the speed of consumer product upgrades—according to the EPA, the average life of a mobile phone in the US is only 18 months.
On-premises PBX systems may find this speed of innovation difficult to match, especially when new standards for mobile devices and tablets force software or hardware upgrades (or the company has to decide not to support certain employee devices).
A smart cloud communications provider, on the other hand, can pool resources from all of its subscribers to work on common compatibility requests, like mobile and tablet support. They can easily update software and push the updates automatically to all of the companies it serves. It’s for this reason that IT pros at many BYOD-friendly workplaces are choosing to opt for cloud hosted PBX systems.
Managing phone system integration across multiple locations
Managing communications for a business is challenging enough at one location, but even more challenging with multiple locations—which usually need to communicate with each other to get business done.
An IT pro managing multiple locations with on-premises PBXs has to contend with the fact that different locations could be running disconnected systems of different ages with different capabilities. Systems may not even be from the same vendor. Capabilities may be lost to interoperability problems. Productivity may be lost to inefficient communications. Getting every location onto a single standard may be next to an impossible task.
Those are many of the reasons that some IT pros today prefer the unity they can achieve through hosted phone systems. They benefit from standardized capabilities and total interoperability across locations. When upgrades happen, they happen everywhere simultaneously. Maintenance is outsourced to the hosted PBX provider and far fewer resources are required to understand and use systems across the business. And processes and procedures can be standardized for greater efficiency.
For IT pros who want phone systems working together across multiple locations, or even multiple campuses, cloud hosted PBX systems present a simpler option to implement and maintain.
Some IT pros even start with a cloud-based system at one location as part of a larger hybrid cloud communications system, and then move other locations onto the cloud as their on-premises PBX systems reach end-of-life. It’s a clever phased approach to phone system migration that’s gaining more and more steam among businesses that don’t want to rip-and-replace all at once.
Differences in staffing requirements for hosted phone systems vs on-premises PBX systems
With a hardware-centric approach, IT pros rely on their own employees to maintain their business phone system. That means they get to hire from a talent pool with varying degrees of skill level and technical knowledge about their specific communications platforms.
Those employees can get sick, forget things, leave for other opportunities or simply fall short of expectations. They may even be responsible for other IT tasks that take priority over PBX system fixes and enhancements.
With hosted phone systems, the only thing IT pros are responsible for is maintaining regular payment. The responsibility for running and maintaining the PBX system falls entirely on the service provider. Unlikely outage? It’s the service provider’s problem. Big software update? Same thing. Interoperability problem? The service provider is on the hook. They’re the experts on the phone systems they provide because it’s all they do, and in the rare event of a problem, there’s just one throat to choke.
Maintaining phone system reliability and continuity
An IT system is only as strong as its weakest link. And business phone systems have a whole lot of links—to users, administrators and other systems.
Some IT pros feel safer managing hardware nearby. It’s easy to run down the hall to a server closet if something goes wrong, right? And by itself, the system may be pretty robust. But an on-premises PBX system may also be dependent on forces outside a company’s control, like an electrical grid outage, an Internet outage or half-mile wide tornado barreling toward your facilities.
If an organization takes the same level of precautions to ensure the same service reliability and continuity as a tier 4 data center, their phone system should stand up to a myriad of potential threats. But most companies don’t have things like dual-powered cooling equipment, multiple independent distribution paths or fault-tolerant site infrastructure.
For the companies that don’t, a hosted phone system delivers a level of reliability and redundancy that’s difficult and expensive to achieve at facility level with an on-premises PBX.
With a cloud phone system, that reliability is built in. No need to spend resources monitoring the system for service levels. No scrambling when a server goes down and business comes to a halt. The cloud marches on.
Managing disaster recovery with on-premises vs hosted phone systems
Natural disasters are probably among the most catastrophic failures a phone system can encounter. They’re also probably one of the least predictable. It’s no wonder that countless books, manuals and courses on disaster recovery are produced each year.
Disaster recovery is one area where an on-premises PBX is outright hard to defend. If a company’s facility gets hit, its phone system hardware can be obliterated beyond repair. Its investment may be floating down the street in several pieces. System settings, set-up, provisioning—all gone. The company will have to start over from scratch, which will take plenty of time and lots of money.
With a hosted PBX system, however, the company can set up shop in a new location – or work from home– and get back to business almost like nothing ever happened. The company’s entire setup is still sitting in the cloud, just waiting to re-connect, settings and all.
In addition to avoiding hardware replacement costs, many IT pros prefer hosted PBX systems because they can reduce revenue lost to a natural disaster, since the time to return to normal operation with a cloud-based phone system is typically much shorter than an on-premises PBX. If a company’s revenue is strongly dependent on communications, limiting downtime is critical.
IT pros are smart. It’s their duty to look out for what technology is best for the business. Some need on-premises PBXs to fit their needs. Others are choosing hosted cloud phone systems that open up new possibilities as well as floor space. Either way, there are technological and fiscal hurdles to avoid so technology runs efficiently and affordably.
Discover the advantages of our cloud communications systems >
Educate yourself more on cloud communications solutions >