Virtual phone systems, also know as cloud or Hosted phone systems are a very budget-friendly business telecommunications solution that fits the needs of most businesses no matter their size.  But are Hosted PBX solutions always more cost-effective than an on-premise IP phone system?  The answer is- well, hard to say.  There are a lot of outside factors that go into determining the overall cost of a business phone system, and surprising there is a point in time where an on-premise IP telephone system could be as much as $12,000 lower than a cloud phone system.

The infographic below compares a Hosted VoIP phone system to an onsite IP phone system using similar features, applications, phones, quantity of users and SIP trunks (VoIP phone lines).  Price estimates are based on one location over 5 years.  Price gaps between cloud and premise-based IP business phone systems decrease when additional locations or remote users are introduced.  Price gaps may also decrease slightly after the five-year warranty expires for the premise-based equipment and software, as these should be renewed.

Other factors to consider:  Cloud phone systems will always have the latest software, security and feature updates for no additional cost.  Cloud telephone systems do not require a phone closet, reducing office space and lowering electrical costs.  Hosted telephone system’s monthly charges can be reduced by purchasing and owning equipment rather than renting.  Total costs do not include onsite maintenance, trip charges and MAC labor.

In summary, the choice of telephone system that is right for your business really depends on your long term business goals.  We encourage you to speak to a telecommunications provider that sells both virtual business phone systems and on-premise telephone systems to determine which phone system is right for your business.