Cloud-Hosted vs On-Premises PBX Phone Systems (Is It Time for VoIP?)

Cloud-Hosted vs On-Premises PBX Phone Systems (Is It Time for VoIP?)

One of the stalwarts of the office for decades has been the business phone system. It’s one of the main methods for communication in and out of a business.

But the way that businesses operate has changed dramatically over the last decade or so, especially over the last 18 months of the pandemic. Hybrid and remote teams have become the norm, and companies are making big adjustments to their IT solutions to keep up.

Before the pandemic, 82% of Canadian employees worked from the office, now approximately 57% work primarily from home, and 14% work a hybrid mix of home and office.

This has created a challenge for Canadian businesses deciding how to make an on-premises, landline-based phone system work. With much of the workforce no longer being in the same place, those desk phones and extensions are going unused.

Is it time for your office to switch to a business VoIP phone system? How does VoIP quality compare? Are there cost savings? 

We’ll go through a comparison of on-premises PBX and VoIP phone systems to help you decide what’s best for your business.

Comparing On-Premises and VoIP Phones


On-premises PBX telephone systems that use local landlines include equipment that is housed onsite. Companies sign up for a certain number of business lines and desk extension lines. The system was designed to allow multiple employees to use office lines, but not need a phone line for every employee.

These phone systems usually use copper-based telephone lines that connect into a central PBX box at the company’s premises. Inside that box are various switches that distribute calls to all the different extensions in the office.

There is a lot of equipment on site that needs to be maintained and adding a new extension means having to have someone come out to install the necessary equipment and line for the desk phone.

VoIP (Cloud-Hosted)

A hosted cloud phone system, or VoIP, is internet-based. There is no equipment kept onsite and no wires, as all the infrastructure to make the phone system work is hosted by the VoIP provider. 

Rather than having your ability to receive or make calls tied to a physical location, cloud-hosted phone systems allow company employees to make and receive calls from anywhere. They can use a VoIP-enabled desk phone, a mobile device, or a computer.

VoIP uses strong broadband connections to deliver the same quality and features that companies are used to from an on-premises system, but with fewer costs and more flexibility.

Cost Comparison (VoIP vs On-Premises)

There is a significant cost difference, especially with the startup costs, between a VoIP phone system and an on-premises PBX system. 

When you sign up for a cloud-hosted phone system, you don’t have any expensive equipment or line installation to pay for. You can sign up for a very low monthly rate that is scalable anytime you need to add or remove users.

With VoIP, you’re looking at a similar affordable cost as when you sign up for new cloud software.

Analog PBX phone systems can average $4,500, according to office supply company Office Interiors. Adding a new phone line can run $20 to $50 for each line per month, plus the installation costs.

There is are significant up-front and ongoing monthly cost savings when switching to cloud-hosted phones.

Call Quality & Features

One reason that companies hang on to landline phone systems is that they are afraid they’ll lose quality or features if they move to a cloud-hosted phone system.

While in the early days of the internet, VoIP may have gotten a reputation for poor call quality, but with the advance of broadband and cloud technology since those early days, this is no longer an issue.

VoIP call quality has been vastly improved over the last two decades. Today, you can’t tell whether someone is on VoIP or a traditional landline.

And while landlines are still susceptible to poor line quality during a storm, VoIP doesn’t have this problem because it’s not dependent on those local telephone lines. 

VoIP features often go beyond what you’ll see with a landline phone system. You’ll have all the regular features you expect, such as:

  • Call transfer
  • Company directory
  • Call forwarding
  • Group ring
  • Calls to and from any phone type (landline, cloud, mobile)
  • Call hold
  • Caller ID
  • Do Not Disturb
  • User Extensions
  • Etc…

Because VoIP is cloud-based, you also have features you can’t get in a landline system, like automated voicemail transcription and a web portal to easily change things like greetings, virtual receptionist prompts, and more. 

Business Continuity & Flexibility

During the pandemic when companies had to send employees home to work, a landline-based phone system became a barrier. Employees working from home can’t call out on an on-premises office phone system, for example. 

Cloud solutions are the best way to ensure your business is agile and has a structure in place to ensure business continuity and fast disaster recovery. The flexibility of being able to access your business lines from any location at any time is no longer something that is “nice to have,” it’s become a necessity.

Switch to a Reliable Cloud-Hosted Business Phone System

Haxxess can help your Northern Ontario business with a smooth transition to a reliable VoIP phone system that is going to increase your capabilities while lowering your phone costs. 

Contact us today to schedule a free consultation! Call 705-222-8324 or reach out online.

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