Comparing On-Premise vs Cloud Telephony Solutions
Choosing which VoIP phone system is challenging enough with so many things to consider, i.e. comparing feature sets to match organisational needs, operating system compatibility and so on. Throw having to compare On-Premise vs Cloud Telephony solutions in to the mix and the decision suddenly becomes challenging enough to give most people a migraine, particularly if they are not extremely well acquainted with the technology.
Nowadays, all the rage is about Cloud Telephony, but does that mean that the days of the On-Premise solution are dead? Should you switch your company to a cloud based solution? The answer is a simple no, but how then should you decided?
As you may recall, last week we covered the Top 5 benefits of Cloud Telephony and now it is time to take a closer look at On-Premise vs Cloud Telephony solutions in order to help you make an informed decision, by helping you understand the differences, of which there can be a few.
Perhaps the most important aspect of either solution to consider is the feature set as this is where the most benefits in terms of boosting productivity, improving customer service and mobilising your workforce can be found.
Many Cloud Telephony Solution providers differentiate between their cloud and on-premise offerings, meaning that the feature set on offer is not the same for both. Moreover, features that are standard with on-premise solutions like IVRs, Queues and Team Management may not be included in the Cloud solution and could cost extra. If that is the case, such a solution may not be a viable option compared to a cloud solution like pascom’s mobydick which includes all the same features regardless of whether it is Cloud based or on-premise (either hardware based or virtualised).
Capital Expenditure (CAPEX) is one area where cloud solutions definitely have a distinct advantage. On-premise solutions entail shelling out for expensive server hardware, whereas with a cloud solution you will only need to budget for desktop phones. In exchange, instead of one large upfront cost, businesses who choose cloud based solutions are normally charged a lower monthly user based fee.
Cloud Telephony solutions, therefore tend to be very appealing to the smaller end of the SMB spectrum. However, as with all these things, there comes a point when purchasing is actually more cost effective than paying a monthly fee, and it is normally around the 20 user mark, making cloud solutions ideal for SOHO and SMBs with 5 to 20 employees.
That’s not to say that Cloud Solutions are not suited to larger enterprises, it’s more that the motivation behind a larger enterprise adopting a Cloud Telephony platform relates to a different set of benefits.
Total Cost of Ownership (TCO)
This is another area where Cloud based Telephony solutions appear to have the upper hand over On-Premise solutions. Cloud solutions can often have a very low TCO namely due to cost savings in terms of IT staff and also because often the solution provider is responsible for server configuration and maintenance.
Moreover, Cloud solutions also often have the so called “software maintenance” costs included in the monthly fee and depending what the On-Premise software maintenance costs are, this can greatly reduce operational expenditure (OPEX).
However, while it is true that cloud solutions have the upper hand here, you need to always bear in mind that the size of your business and the way it is structured plays a role here too, meaning an On-Premise solution may be more beneficial.
Last time around, we mentioned that one of the top benefits of a Cloud Telephony solution is its simplicity. This is true most of the time and can lead to significant cost savings in maintaining and upgrading your infrastructure, particularly if you still operate a legacy system to connect to the PSTN. Upgrading to an on-premise VoIP phone system can sometimes result in having to upgrade or replace large portions (if not all) of your existing infrastructure which is obviously a costly option which would not be necessary when implementing a Cloud based solution.
On the other hand, there could be a perfectly justified business reason as to why your company would like to retain its existing infrastructure and in which case, an On-Premise solution is the way to go.
At the top of this post, we mentioned that the feature set is perhaps the most important aspect to consider. Well here’s another one that challenges for that top spot – Scalability. Whether you call it future proofing, flexibility or scalability, this intangible word should play a critical role in your decision making process.
But what exactly constitutes scalability? When comes to Cloud solutions, aspects such as is it a converged solution need to be consider as if it is, you need to ensure that your voice services also meet your business objectives of not only today, but also the next few years. If choosing an On-Premise solution, you will need to consider your hardware capabilities with one eye considering future company growth.
It may seem like more questions that answers, but by answering these questions and carefully matching your answers to your business objectives, the decision as to whether to choose a Cloud based or Premise based solution is best for will become less challenging and will hopefully avoid you getting that migraine I mentioned.
Sign up to a free mobydick phone system consultation and one of our team will happily help you assess the best solution for your business, plus provide you with some useful insights, tips and advice along the way.