Good Question!

As a telecom equipment provider, I constantly see the decision for a phone system solution come down to (a) cost, and (b) what type of “system” has been offered or “sold” to the client.
I believe that it may be possible for you to pay for a new system with the savings you will see by using new tech lower cost phone lines with no increase to your monthly bottom line, and possibly even a savings.

Here are my thoughts regarding what type of system to go with and why.

Hosted or On-Premise?
First, there are two basic types of services being offered today – hosted or on-premise. Here is a simple explanation of both types:
With hosted systems, all PBX equipment is hosted off-site and you only have an IP phone on your desk that is routed to the internet for service.
An on-premise system consists of all PBX equipment being onsite with the option of both IP or digital based phones on the desks.

Pros and Cons

Pros of Hosted Service – a lower initial outlay of capital, a lower per minute cost over legacy long distance service, no maintenance costs related to the upkeep of the main PBX, a great choice for a company with a virtual office where employees are not at a central location.
Cons of Hosted Service – If your internet goes down – you’re dead in the water. IP phones will require an initial outlay of capital to convert the whole system as well as upgrade your network systems. Typically if you want to make a change, you will speak to an operator who is not familiar with your company or it’s setup. Client information security can be an issue.

Pros of On-Premise systems – The long-term capital outlay can be much lower than a hosted system since you do not pay $$ for each user on a monthly basis. Making simple changes can usually be accomplished in-house or with a phone call to a known technician who knows your system. The option to use digital endpoints instead of IP can also be cost saving, especially if your office is already wired for digital. You can have backup phone lines – if the internet goes down, the phone still rings.
Cons of On-Premise Systems – There can be a higher outlay of capital to get up and running. Flood, fire and other natural disasters could render your equipment dead in the water. In the past, the high cost of phone service and long distance fees could make the monthly cost of having an on-premise system expensive.

It seems that the main drive to go with a hosted service is the lower cost of the phone lines and long distance. What doesn’t seem to be told to companies that are considering a hosted service is that the same price phone lines are now also available for on-premise systems.

In my opinion, an on-premise system can be the best option, especially now. With the newer internet based SIP trunks being available, monthly “phone line” costs can be just as low as a hosted system, the huge savings of that lower-priced service over legacy service can offset a new system cost – especially if you obtain a 0%, 36-month lease.

Again, I believe that it may be possible for you to pay for a new system with the savings you will see by using new tech lower cost phone lines with no increase to your monthly bottom line, and possibly even savings.

Example – A recent client of mine purchased a new on-premise system, and at the same time lowered their current monthly expenditure. How? They got the 0%, 36-month lease along with internet SIP trunks. They will now save $7200 over the life of the lease (36 months) and after that, $6000 every year over their previous monthly expenditure.

I was told, “It’s like you paid us to get a new system!”

If you think this makes sense and want to investigate possible savings for your company, Contact Us.