IP Phone System -vs- Hosted System (Cloud System)

Purchasing a IP Phone System consists of buying all the hardware to connect to a call carrier like Engin and handsets. This includes a PBX and optional POE switch

For a Hosted System you do not have a PBX just the IP handsets and an optional POE switch.

In many cases network hardware such as modems, routers and switches may additionally be needed for both.

Let’s compare costs.

Initial outlays can be identical for IP phones (i.e. Snom branded IP handsets could be used either for  IP Phone Systems or for a hosted solution), but other equipment such as the VoIP phone system main equipment and gateways can be specific for the service.
Costs to expand.

Adding additional phones (users) to premise based VoIP phone systems can be as simple as adding another IP handset, unless additional licensing is required to increase capacity.

With a hosted solution you will need to add both the cost of the hardware (IP handset) and add to your service plan, which will increase your monthly cost.

A summary of the positives and negatives for comparing the costs for the two are:

IP Phone Systems
  • Higher initial equipment cost and higher setup cost.
  • Lower monthly call costs as you pay for only the number of lines, not the number of handsets.
Hosted VoIP Solution
  • Lower initial equipment cost and lower setup cost.
  • Higher monthly call costs as you pay rental per number of handsets.
  • Features that would be standard on a VoIP Phone systems are usually extra charges on a hosted system (Auto Attendant, IVR nodes, Service Flags)

Features and other important considerations

IP Phone System Positives
  • VoIP phone systems give you complete control allowing you to adjust, create, delete users, extensions and turn on or off all feature sets.
  • Advanced features that are not offered on a hosted solution.
  • Your choice of call carrier and the option of multiple carriers
  • Multiple trunk types for backup or GSM Routers for free calls to staff mobiles
  • Link multiple systems together or just use remote handsets.
IP Phone System Negatives
  • Hardware failure of the main equipment results in loss of all internal communications.
  • Extra initial costs
Hosted VoIP Solution Positves
  • Moving office is usually just a matter of plugging in the phone to a broadband connection
Hosted VoIP Solution Negatives
  • Locked in with hosts call carrier choice.
  • Loss of the internet will result in loss of ALL phone services – internal and external
  • Internal conversations voice quality are directly related to your internet connection.
  • Internal conversations use internet data and bandwidth
  • Flexibility and/or customization and new future features may be slow or non existent for some providers.  Hosted VoIP providers are unlikely to change or adapt services for single users, although there are some hosted VoIP providers that will customize feature sets for businesses.
  • Your provider’s stability, both operational and financial.