From the moment we first began to explore the opportunities afforded by hosted Unified Communications (also known as UCaaS / unified communications-as-a-service), businesses across the globe have been moving away from their on-premise PBX solutions and replacing them with apparently more versatile cloud-based options. While some organisations remain wary when it comes to trusting the cloud completely, others have thrown their investment into cloud-hosted UC with vigour – apparently ready to take on the innovation that lies ahead.
If you’re not sure whether you’re ready for the world of cloud phone systems yourself, it may be a good idea to look at the way On-premise and UCaaS differs to help inform your decision. Some of the areas that we’ll look at today to help you make your choice will include capital expenditure, installation expenses, migration strategies, and more.
CAPEX versus OPEX
Cost will always be an important factor to consider when it comes to implementing a new business strategy.Cloud phone system services are known for offering minimal capital expenditure costs, because you don’t have to pay for any server hardware, power, rack space, or anything else. At the end of the day, all you need to purchase is phones – and this means a huge reduction in initial investment when you compare all the buying you might have to do for an on-premise solution. Indeed, the larger your enterprise is, the greater your capital expenditure costs will be.
Of course, capital expenditures aren’t necessarily the only costs that your business must think about. Installation costs are often a concern too – particularly in on-premise PBX solutions. With on-premise options, the installation costs are high because you need to pay for engineers to install the system. With a cloud solution the installation time is much less or ‘DIY’ therefore the installation costs are virtually eliminated in some cases.
Overall, the UCaaS total cost of ownership savings can be substantial, as many aspects of owning an on-premise solution are far more expensive than working through the cloud.
Migration Strategies and Licensing
Implementing on-premise PBX can be a challenge if you haven’t got the in-house skills. Your teams need to remove and replace all the existing infrastructure that might be in place, which often leads to significant communication downtime and some problems along the way. For an on-premise UC solution to be implemented across an entire company, the process can take weeks if not months.. On the other hand, IT teams can implement new cloud telephony features along the existing communication systems in place. As you grow and thrive as a business, you can scale your hosted offerings as you see fit, allowing IT to roll out additional features at will.
Additionally, licensing can be very simple on a hosted telephony service and the service is charged for on a per user, per month model.
Read our CapEx versus OpEx buyers guide
As your company progresses, software updates on a hosted solution will be maintained by your cloud provider, so you’re constantly up to date, whereas with an on-premise solution you may need to update features several times depending on your architecture. Enhancements can take weeks if not months to fully integrate. What’s more, UCaaS can ensure that you are reliant on your internet hosting service, and most providers offer reliable redundancy, but you will not have immediate access to equipment like you would with an on-premise PBX. However, it can be very expensive to include redundancy with on-premise services, and only larger enterprises can typically afford to invest in disaster recovery solutions.
Hosted vs On-Premise Unified Communications
When you examine the obvious benefits of switching to UCaaS, it’s clear to see why adaptation has sky-rocketed in recent years. While the decision to move to cloud solutions will always depend on the unique needs of each business, it seems that the cloud has far more to offer in terms of agility and scalability. But it comes at a price.
However, it’s often a case of horses for courses. If you require the security and in-house control of an on-premise solution then deploying unified communications on-site is a very good way of achieving these goals.
Many small business IP-PBX systems like contain a huge amount of features and right now many can offer tighter integration with critical business applications like CRM and ERP.
On a final note, like most things it comes down to price, unified communications as a service (UCaaS) is typically charged out on a price per seat per month model, if you have cash and want to own your solution then you’ll soon discover that deploying a UC on-site can be much lighter on the pocket.
Take a look at our ‘PBX versus Cloud‘ article and opinion poll where we have an open debate on the pros and cons of deploying UC on-premise or in the cloud.
