Comparing Costs of a Premises-Based Phone System & A Cloud Phone Solution

  • July 11, 2018
  • Author: Keith Young


When comparing the costs of a premises-based phone system and a cloud phone solution, the long-term costs must be considered – not just the initial hardware and installation. There can be hidden costs due to hardware/software limitations.

There are 10 main factors that contribute to the costs of any phone system. Ask the following questions to help you determine which system has the best value.

The Cost of Mobility

Mobile integration with all phone systems are not equal.

With a premises-based system, mobile integration can be cumbersome and costly.

Integrating mobile calls with a cloud phone solution is seamless and affordable.

  • How is mobile integration supported on this system?
  • Are calls routed in and out of the system? If so, what are the additional costs involved?

The Cost of Capacity

On-premises systems do not have an infinite storage capacity. When you run out of space on your servers, you are unable to record any more calls.

With a cloud-based system, your storage is delivered via the cloud, freeing you of the worry about on-premises storage capacity.

  • What is the call capacity?
  • What does it cost to increase the call capacity?

The Cost of Obsolescence

In today’s ever-changing technological landscape, staying up-to-date is more important than ever. Wanting to add a new feature to your system only to discover that your hardware doesn’t support it is frustrating.

The hardware of a premises-based system typically has a lifespan of 7 years.

Cloud-based systems are an evergreen solution that continually adds new features and improvements.

  • What is the lifespan of this system?
  • Can it still be upgraded?
  • Is the manufacturer still developing features for it? If so, for how long?

The Cost of Maintenance

With premises-based systems, maintenance costs must be factored in. You cannot afford hardware failure, resulting in loss of communications (even temporarily).

With a cloud phone system, direct maintenance costs are not your responsibility because the system hardware is located elsewhere.

  • What are the annual maintenance costs of the system hardware?
  • What are the annual maintenance costs of the system software?
  • How much can costs be expected to rise as the system ages?

The Cost of Integration

Integrating your phone system with your CRM (Customer Relationship Management) system can greatly increase your productivity, streamline communication, and enhance the level of customer service your business provides.

Third-party integration with an on-premises system normally requires a system integrator, which is an added cost and can be a complex task.

Integration with a cloud-based system is generally easy and can be switched on and off with the click of a button.

  • Which third-party applications has this system been integrated with?
  • How much does integration cost?

The Cost of Redundancy

Sometimes bad things happen – for example, flooding, fire, or electrical failure. When your communications system is impacted by unexpected events like these, you need a back-up system in place.

With a premises-based phone system, adding site redundancy will also add an extra system to your costs.

Because a cloud phone solution is hosted in the cloud, your business communications service is always available on multiple devices. Redundancy is automatic.

  • How does the system handle calls if equipment is lost unexpectedly?

The Cost of Performance

A premises-based system has built-in limitations. The more features you add, the more you need to upgrade your system. This always comes at a significant cost.

The performance of your cloud phone solution is always optimized. The cloud has virtually limitless capacity for processing power, no matter how many features you might add.

  • Will the system slow down if we add features?
  • If an upgrade is required, what is the cost?

The Cost of Flexibility

Your call volumes can fluctuate, depending on the time of day, week, or year.

Premises-based phone systems need the capacity for your peak call times, even if that’s only a couple of weeks per year.

A cloud phone solution allows you to pay for the peaks as and when they happen.

  • How flexible is the system?

The Cost of Management

Phone systems need to be maintained and managed. Especially when integrations with other applications and services are involved, this can be quite costly.

If management is outsourced to a third party, charges are typically incurred for a minimum number of service calls per year, whether you need them all or not.

With a cloud-based system, management is simple via your online interface. A large team of technicians or field managers is not necessary. All remote sites can be managed from a single location.

  • How many hours per week would it take to manage our system? How many people are required?
  • How much will it cost to hire someone to support this system?

The Cost of Fraud

Keeping your communications system secure is essential if you want to protect your company from costly fraud attacks.

Smaller premises-based systems (in particular) are prone to attacks.

A cloud-based solution is protected in a highly secure network.

  • How many times has this type of system been hacked?
  • Does the manufacturer release any data on fraud occurrences?
  • Do I have to pay all the costs in the event of our system being hacked?

Don’t Be Surprised By Hidden Costs

Explore all the costs involved in your phone system. Ask questions to get a clear picture of what you’re getting for what you’re paying.

Contact a UnitedCloud specialist for a complimentary quote on a cloud-based phone solution for your business.

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