On Premise vs Hosted VoIP: Which Is Right for Your Business?

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By now we’ve become used to the idea of Voice Over Internet Protocol (VOIP) strategies to connect with one another. When it comes to business technologies, the days of landline phones have gone the way of typewriters, palm pilots and, well, dial-up internet service.

VoIP in today’s business landscape simply makes calls and connections over a broadband Internet connection rather than the old analog platforms.

And so in today’s fast-paced, often work-at-home virtual landscapes,  choosing the right VoIP platform can save your company time, money and integration headaches. VoIP has literally changed the way companies connect with each other internally and with clients  and friendly competitors externally. When it comes to IT services in Los Angeles and all across the globe, VoIP is the not-so-new standard. So, how did we get here?

The History of VoIP: How This New Tech Came To Be

Way back in the early 90’s as global businesses emerged, executives and employees alike were frustrated with the old-school calling technologies. They were being held hostage by the monopoly of standard, hard-wired, phone companies. Recall, back then, every landline charged extra for making calls out of the area code. Remember “long distance” calling? Then they charged an even more exorbitant fee for any sort of international calling.

For small and medium-sized businesses, the cost of necessary interactions made a severe dent in a company’s bottom line. Profits were literally being consumed by the very necessary nature of actually doing business – interacting with remote workers and clients not in your city.

Choices, however, were limited and for most businesses But, there was no other way. You needed a phone and your local phone company was all you had. There were no other choices.

Then came the internet. With the internet revolution, came brand new ways of communication. Suddenly, workers could send written communications to anyone in the world instantaneously and free of charge via email. Next, we would see the rise of real-time communication through instant messaging and chat rooms.

The next progression of this real-time communication was VoIP. This magic technology allowed your voice or texts to travel as data packets across the internet. This means you could speak, just as you would on the phone, to anyone in the world at no additional charge. You would only need to pay for your internet provider which, in the case of expanding industries, most likely already were.

While this may not seem extraordinary now, back then this technology saved people thousands of dollars. Those who had clients family in another timezone or country would incur hundreds of dollars a month in long-distance fees. Suddenly, people could make their most expensive calls via the internet and not be held hostage to the phone companies fee schedule. They could use their IP to make their phone calls. Which brings us to the choices of today’s modern world and which platform best suits your needs.

So you know your business needs VoIP instead of a traditional phone system. But, should you go with an in-house system or hosted VoIP?

Take a look at advantages and disadvantages of both. This way you will be able to make an educated decision about what is right for your business.

Hosted VoIP: The Pros and Cons

Let’s break down the pros and cons of this option.

The Pros
The number one pro for hosted VoIP solutions is not having your phone system drain your in-house internet bandwidth. If you have ever called a company only for it to take ages because their “computer is running so slow” you’ll know why this is frustrating. The more systems, hardware, and strain you put on your in-house network the slower it becomes.

In addition to speed, using a hosted VoIP PBX means you don’t have to make a major hardware investment. The cloud VoIP provider can do a lot of the heavy hardware lifting for you. They can even provide the best hardware choices that work best with their systems.

If the provider has hardware options they will also provide professional installation. They will work around your existing office. You will not have to provide a specialized room for the equipment.

The obvious benefit to hosted VoIP providers is the cost. Hosting is far less expensive than bringing in an in-house VoIP system. But, with savings come other considerations.

The Cons
Hosted solutions have their cons as well. If you’re a smaller operation, a cloud-computing solution without phones or other physical devices could save much more money. In this case, you’ll only pay for what you use on their servers and you don’t have to invest in infrastructure.

VoIP on the cloud is great if your primary workforce is remote or spread out all over the world. It uses cloud programs to manage your network so you can access it from anywhere. All you need is an internet connection and you’re in business.

The con of using a system like this would be the potential for downtime. But, a reputable provider should have fail safes in place to prevent crashes and keep you in business. Employing an IT support company in Los Angeles can help any local business sleep well at night, no matter where in the world your company is located. As long as you ask lots of questions, there is a support team in place, and you are secure with your ability to access the internet you’re golden.

Looking at all the pros of a hosted solution it’s hard to see why you would need an on-premise service. However, depending on your business, in-house IP-PBX could be a viable solution to serve your clients and employees best. But, let’s look at that option now to see if your business would be better served by keeping things in-house.

On-Premise IP-PBX: The Pros and Cons

For those businesses where calling is the company’s bread and butter – like tech support, customer service or call center-driven companies, then you may consider other alternatives. If you have a large business that depends on deep integrations for call centers, call accounting, real time phone dashboards, and the like an in-house option may be better.

How does your business run? Are you constantly running 300 phone lines or more? Does the majority of your business run on phone calls and not online? Is your customer service team primarily phone based with little other option?

If you answered yes to a few of these questions it is worth the expense to install an in-house IP-PBX system. An in-house system provides limitless line potential and guarantees that you will always be up and running. However, be aware that this kind of system can run into the tens or even hundreds of thousands of dollars. It is phenomenally more expensive than the hosted solutions would be. So, you have to make sure it’s really what your business requires before pulling the trigger.

You also need a lot of dedicated space to house the equipment necessary to support your network demands. You will need a server room since the equipment will be larger than normal and need temperature controlled environments. Large servers can also be loud so soundproofing is a good idea. You can hire a professional installation team to help you with all of this and hard wiring all your devices around the business. Be Structured is one of the best managed services companies in Los Angeles that can provide additional support and security to supplement that which comes with your basic purchase.

The next step is to make sure your in-house IT team is well-versed on the ins and outs of the specific system you’ve chosen. This way if something goes wrong they will be able to address it.

How to Pick A Good Hosted VoIP Provider

In most instances, a hosted VoIP is going to be the best option for your business. But, how do you make sure you’re using a reputable provider? Do some research and pick someone who knows the game. Research the team of professionals that will make up your core support department. Make sure they are experienced and knowledgeable.

The provider you choose should be able to offer hardware if you need it as well. They can recommend and provide products so you don’t have to research them. Make sure they offer professional installation services for any hardware needs you have. This way you make sure the installation is done right the first time. There should also be a support guarantee should anything go wrong.

Explain your needs fully to guarantee that the provider you pick can handle the network demands of your business. Make sure their cloud system has backups in place and ask what their protocol is if things were to go down. If the network crashes how do you maintain your business? Ask any potential providers about their support team. If you need technical assistance is there always going to be an IT professional available to help? Will you have a 24/7 emergency number to get things back up and running right away?

Make sure you know exactly what you get. Ask about all the different options they provide. There are a number of different setups that are possible. If you don’t ask questions and clarify exactly what you need you could cost yourself and your business money.

Which Is Best Depends On Your Business Needs

As we have seen a hosted VoIP service is going to be suitable for a lot of businesses. But, if you have a large business with lots of phone lines, employees, and a major part of your business is run on the phone rather than in-house may be your best bet of all.

You need to do your research. Know your business needs inside and out. Have your numbers figured out. This way when you call providers you can get accurate quotes based on real data.

Either way, make sure you go with a company that is true professionals. Whether they are helping you only with the initial installation of your on-premises system or becoming your cloud VoIP provider they need to know what they’re doing.

Are you looking for a quality hosted VoIP provider for your business? Let Be Structured helps take your business to the next level.

About Chad Lauterbach

CEO at Be Structured Technology Group, Inc. a Los Angeles based provider of Managed IT Services for small business. I desire to help small businesses better utilize technology by assisting in high level planning to make sure that new systems will benefit them both operationally and financially. I am careful to implement and support systems using industry best practices.