Advantages and Disadvantages of On-Premises, Hosted, and Hybrid PBX Solutions

In businesses and organizations worldwide, phone rooms once humming with wires, black boxes, and blinking lights now sit empty. Those spaces might be repurposed for hybrid conferences, flexible desk sharing, or staff relaxation. Or they might simply remain empty save for a spare terminal or a few pieces of backup hardware.

The evolution in communications technology means IT experts can choose between cloud-based, hybrid, and on-site private bank exchange (PBX) systems. While some have adopted cloud-hosted unified communications as a service (UCaaS), others are exploring hybrid models or sticking with on-premises PBX systems due to their specific needs.

Read on to find out why some IT professionals are emptying their server rooms in favor of the cloud while others are relying on in-house solutions – and why still more are opting for the best of both worlds with secure hybrid cloud PBX.

Budgeting for On-Premises, Hosted, and Hybrid PBX Systems

How are we going to pay for this? Every CIO and CTO asks this question, especially as demands increase and budgets continue to shrink.

An on-premises PBX solution might seem like a one-time cost: you buy the phone system, and it does what it was designed to do. However, expenses can spike with the need for upgrades, extra hardware, or expanding networks. With the rapid evolution of communications technology, IT departments must plan for more frequent replacement cycles or risk relying on obsolete systems.

In contrast, UCaaS and private cloud PBX solutions offer more predictable, subscription-based pricing. Most charges are calculated per user, allowing businesses to scale without requiring significant infrastructure changes or additional unforeseen expenses.

A hybrid PBX model provides flexibility for businesses that prefer a tailored approach to communications. Hybrid cloud solutions give organizations access to modern UCaaS applications and software with hardware that fits their everyday workplace needs. This option allows them to maintain existing on-premises systems while integrating cloud components, optimizing costs, and managing risk over time.

Replacing, Expanding, and Upgrading: On-premises, Hosted, and Hybrid Solutions

Moore’s Law states that technological capability doubles approximately every two years, but lately, it might underestimate how quickly things can change. With AI, remote work, and evolving infrastructure, today’s communications technology is almost unrecognizable from just a few years ago.

On-premises PBX systems require frequent hardware and software updates to meet industry standards. While old solutions may hold out for a while, the costs needed to maintain compatibility (and even competitiveness) with new software can take resources away from more strategic initiatives.

On the other hand, UCaaS solutions are designed to handle updates seamlessly. Cloud communications providers take care of maintenance, ensuring systems remain up to date without requiring in-house resources. Scaling systems by adding licenses is easy, and new capabilities are added whenever they’re available.

Hybrid cloud solutions strike a balance, enabling businesses to leverage their existing on-premises investments while providing access to cloud benefits like flexible scalability, continuous compliance, and minimal maintenance overhead.

Bring Your Own Devices (BYOD) with PBX Options

As remote and hybrid work models emerge as the new standard, employees expect companies to provide equal experiences on whatever device they choose to use. However, bring-your-own-device (BYOD) initiatives can pressure IT teams to keep up with a constant barrage of consumer product upgrades.

Organizations with on-premises PBX systems may find this speed of innovation challenging to match, especially when new standards for personal devices force software upgrades. Conversely, employees who hold on to older hardware might be unable to use modern communications and collaboration tools.

UCaaS and private-hosted PBX solutions solve the BYOD problem. Providers can rapidly deploy software updates and ensure compatibility across various devices, enhancing flexibility and ensuring employees can work however they want. Hybrid systems can also support BYOD by integrating cloud updates within existing infrastructure.

IT departments might be concerned about BYOD's security, but a secure hybrid cloud option gives CIOs peace of mind. Traditional servers offer on-premises data control, while regular cloud updates automatically maintain compliance with privacy, security, and regulations.

Integrating Communications Across Multiple Locations

Managing business communications is challenging enough at one location and only becomes more complex across multiple sites. Different sites might have on-premises PBX systems of varying ages, capabilities, and vendors, making achieving consistent communications standards and interoperability difficult.

Hosted PBX solutions simplify this by providing unified capabilities and seamless location integration. Updates and maintenance are managed centrally, allowing the organization to roll out updates.

For those using a hybrid cloud communications model, this allows employees to maintain productivity while allowing for some differences at the server level. Once the overall system is established, IT teams can work on standardizing technology.

A critical element of integrating communications is providing employees with a reliable, convenient way of collaborating, no matter where they are. A hybrid workplace framework with full communications abilities and a comprehensive set of endpoints, including DECT, maximizes hardware investments while leveraging the cloud for secure, high-performance meeting experiences.

Staffing Requirements for On-Premises, Hosted, and Hybrid Models

One of the most significant ongoing costs for any IT department is payroll. On-premises systems require dedicated staff with specialized knowledge to maintain and troubleshoot hardware. Finding someone qualified to work on outdated or bespoke PBX solutions might be incredibly challenging.

With hosted phone systems, IT professionals need only maintain regular payments. The UCaaS provider performs maintenance, updates, and troubleshooting, allowing CIOs to focus on strategic initiatives rather than routine system upkeep.

Hybrid solutions can also reduce staffing demands by offloading certain functions to the provider while a smaller IT team retains control over critical on-premises components. This makes for cost-efficient, agile use of in-house expertise with an approach tailor-made to business needs.

Reliability, Availability, and Disaster Recovery for Business Continuity

Any system is only as strong as its weakest link. And business phone solutions have many links – to users, administrators, vendors, separate locations, and other IT solutions. It’s critical to business continuity that one broken link doesn’t lead to a system-wide failure.

On-premises PBX offers technology professionals a sense of control since they can just go down the hall to reboot the server. These solutions can be resilient against disruptions and outages but require substantial investments in redundant infrastructure and failover systems.

However, on-premises solutions can be vulnerable to natural disasters. Physical damage can lead to significant downtime as equipment needs to be repaired or replaced. In contrast, cloud-hosted PBX solutions are distributed across multiple data centers to ensure high availability and reliability.

With cloud or hybrid solutions, businesses can rapidly switch to remote work or relocate, as their data can be securely accessed from anywhere. However, they rely on a stable internet connection, which can pose a challenge when service is down.

Hybrid cloud PBX systems combine the control of on-premises solutions with the go-anywhere flexibility of the cloud. This approach ensures critical functionality is maintained on-site while the cloud provides redundancy and failover protection. This allows for a comprehensive disaster recovery strategy, improving continuity so you can return to “business as usual” faster.

On-premises, Hosted, or Hybrid: A PBX Solution for Every Business

As an IT professional, you must find the best communications technology for your business. Maybe an on-premises PBX is still your best solution. Perhaps you’ve considered a hosted cloud phone system for flexibility (and to free up a little floor space). If you need the best of both worlds, a hybrid cloud PBX model might be the right choice for your organization.

Mitel offers customers unparalleled deployment flexibility with private, public, and on-premises solutions. Our focus on hybrid cloud UC infrastructure allows businesses to find the right communications system for their needs while ensuring reliability, security, and compliance.

Mitel and Zoom offer users a versatile hybrid UCC solution that combines Zoom Workplace and Zoom AI Companion with Mitel’s flagship communications platforms. Functional with any deployment you choose, this unique hybrid solution delivers security and control for mission-critical communications.

Contact us to explore your options. We’ll help you choose the right PBX solution for your organization.