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  • There are pros and cons of both hosted PBX as well as
    on-premise PBX. There are some fundamental differences to each of the systems
    and they feature advantages that should be known prior to making a decision on
    one or the other. The move to an IP-PBX business phone system is beneficial
    regardless of which system is ultimately chosen. However Rick Nash
    , there are differences and knowing those leads to a better
    VoIP phone system and a higher level of satisfaction for the company, employees
    and even callers.

    Open source on-premise systems, such as Asterisk, are
    responsible for driving down costs for VoIP providers and manufacturers. This
    provides users with the ability to get the latest technology with many more
    features at a lower cost than what was traditionally available.

    What is
    Hosted PBX?

    Hosted PBX or hosted VoIP, otherwise known as an Internet
    phone system is one where the provider is responsible for housing the IP-PBX as
    well as handling the technology required to provide the services to the phone
    system. The desk sets will plug into a router and the calls Mats
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    , signaling, and features are handled through an
    IP-PBX server at the provider’s location. The provider of the hosted PBX charges
    a monthly fee that is inclusive of a minutes package and potentially certain
    features. Charges can also be at a per minute calling cost. Either one can be
    affordable depending on the rates. A company that knows the amount of minutes
    spent on the phone in a given month can make effective cost comparisons.
    Extended features may come with additional cost.

    What is On Premise

    On-premise PBX is also known as an IP-PBX phone system. It is
    similar to a traditional PBX system that resides at a location, such as a
    computer equipment room or phone closet. The main difference is that IP routing
    is done with more current technology. The signaling is done with an IP phone to
    the IP-PBX server using a LAN. Calls can go through a traditional phone company
    as well as voice over Internet (VoIP) using SIP trunking. Gateway cards are used
    to connect the system to the traditional phone company provider. The provider
    can be the one that already provides service, though a SIP trunk can be
    configured for use with an Internet service telephone provider (ISTP). An
    Asterisk based system is the most affordable option for on-premise PBX due to
    the flexibility that is offered with open source software.

    Hosted IP-PBX
    versus On-premise IP-PBX

    There are some differences between the two
    options. Understanding benefits and limitations makes it easier to determine the
    best option for any particular organization. Cost, expansion Henrik
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    , and other considerations are laid out to make it
    possible to compare the hosted IP-PBX and the on-premise IP-PBX within the same
    categories to learn of the greatest differences.


    an on premise IP-PBX phone system involves buying hardware, which includes a
    server with the proper number of interface cards (if needed) to be able to
    connect the telephone company with the IP phones. Hosted IP-PBX only involves
    purchasing IP phones, though a router and network switch may be needed to ensure
    there is one specifically dedicated to VoIP.

    Hosted PBX:
    Lower initial
    equipment cost and set-up cost
    Network qualification is performed by the
    customer. Any upgrades are at the customers expense
    All IP-PBX feature
    programming is done by the customer
    No maintenance costs of the IP-PBX, but
    all on-premise and remote phones and network devices are the responsibility of
    the customer
    Staff training is the responsibility of the customer
    monthly service cost
    Easy to add extra lines
    Upgrades and new features are
    Extended features, like conferencing Ryan
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    , may come with additional costs

    On Premise

    Higher initial cost and set-up cost
    Potentially higher
    maintenance costs
    Lower monthly cost after expenses are covered
    Ability to
    SIP trunk to get lower cost calls
    On-premise IP-PBX provider will qualify
    On-premise IP-PBX provider will install and program
    On-premise IP-PBX will train staff on feature use and "best

    IP phones can be identical regardless of layout. For example,
    the 12 Polycom 550 SoundPoint IP phones can be used for on-premise IP-PBX phone
    systems as well as hosted IP-PBX systems. The other equipment, such as server,
    software, routers New York Rangers
    , switches and battery backup can be very specific for the
    individual system. $3,000 to $5,000 is typical for purchasing a server with the
    necessary software and cards. Ongoing server maintenance with hosted PBX will be
    the responsibility of the provider, which if purchasing an on-premise PBX, the
    cost would become the burden of the owner New York Rangers
    , if not included in the IP_PBX package.


    There are costs to consider for expanding. Adding more phones to an
    on premise PBX is as simple as purchasing more IP phones, unless any kind of
    additional licensing is required. With hosted PBX, however, additional IP phones
    are purchased and added to the service plan requiring additional programming
    time by the customer. This can also increase the monthly cost, depending on how
    the company sets up the plan. An Asterisk based on premise PBX will use the
    administrator GUI interface Customized New York
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    , where additional extensions can be

    Other Considerations

    Satisfaction is the most important
    aspect of choosing a system, regardless of whether it is hosted PBX or
    on-premise PBX. Positives and negatives for each system are laid out

    Positives for Hosted PBX
    Providers have more resources than
    users, so new feature sets are possible
    New feature installation is handle
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