For many organizations making the switch to IP phone systems, the biggest problem they face is choosing whether to use on-premises systems or hosted phone systems.

On-Premises Phone Systems

Why hosted phone systems dominate on-premise

In an on-premises phone system, the physical hardware is located at your work site and is owned by the company or leased. A business's own IT staff is responsible for upgrades and phone-system maintenance. For those few institutions that require data to be stored on-site because of specific security regulations, on-premises solutions are preferred.

Hosted Phone Systems

Hosted IP phone systems are cloud based; the only physical infrastructure at the premises is a phone and a network POE switch, thus saving space at your office's site. The third-party provider carries out all server activities, upgrades and maintenance over the internet. Because upgrades are performed automatically, your software will always be up to date, while feature upgrades for on-premises systems can take months. The remote server of a hosted system also possesses the superior resources needed to ensure the safety of your data. For disaster recovery, most providers offer reliable redundancy. Finally, a primary advantage of a hosted phone system is that connectivity is provided by the cloud, so you don't have to deal with a telephone-company contract.

While hosted systems usually appeal to small and midsized businesses, large enterprises with 100-plus users may still prefer a hosted phone system due to the many advantages.


Users of hosted solutions incur lower upfront costs and are usually charged a monthly fee for each user. In a hosted system, the only hardware cost is for the physical phone. Conversely, users of on-premises systems have high upfront expenditures. The costs of an on-premises-system include the phone hardware, power, cooling, rack space and installation.

When you look at the total cost of ownership, a hosted solution is often the most cost effective because of the savings in IT personnel, since hosted providers handle the server configuration and ongoing maintenance.


If you are planning for the future when your business will most likely expand, a hosted option is ideal. New users can easily be added to the system, without the need for hardware upgrades.

For more information about hosted phone systems, contact TelWare at 1-800-637-3148 or TelWare is a national leader in the installation of voice, video, data and unified communications solutions. TelWare is an authorized Avaya, Star2Star, SimpleWAN and 3CX dealer.

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