Comparing Costs

Comparing Cost

A hosted IP PABX system offers new businesses the advantage of lower startup costs, which is a major plus when strapped for cash. That’s because with a hosted system, you don’t purchase the communication equipment, or maintain it. However you will pay ongoing service provider fees, and unless you are offered a locked-in rate, you can’t predict how high these fees may go in the future.

Using an on premise IP PABX system, you’ll have to purchase phone equipment, so startup costs are higher than with a hosted service. But as a plus, won’t be burdened with a monthly service fee. It’s important to keep in mind that you’ll be completely responsible for your IP PABX system, including equipment updates, maintenance and troubleshooting. As a small business owner you’re already juggling a number of competing demands, adding phone system management to the mix might not be the right move.

Growth and Expansion

If you’re launching a startup or just getting your small business off the ground, it’s difficult to predict future communication needs. In this situation, using a hosted IP PABX configuration makes a lot of sense. However, pay very close attention to the small print. You want to be sure you’re not getting locked into a contract that limits flexibility, or penalizes you for it, as your company grows.

Although expanding and reconfiguring an on premise IP PABX phone system will cost more than when you do so with a hosted system, the advantage is you can make the changes you want as often as you’d like. You can also implement changes exactly when it suits your business best. You enjoy ultimate flexibility. But keep in mind that with an on premise system, you bear all the risk and aggravation associated with expansion and growth. If you’re absolutely sure of your communication needs won’t be changing, then investing in equipment may make sense.

Management and Control

At the center of the debate between hosted and on premise IP PABX is management and control. With a hosted IP PABX system, you give up control and are offered just a handful of configurations to select from. Your phone solution isn’t custom built to suit the demands of your business. On the other hand, you’ll free yourself and your team from dealing with management of the system, giving you more time to focus on business building tasks. You’ll have to pay a monthly service fee, but being relieved of virtually all management responsibilities could boost profits in the long run.

An on premise solution gives you control over every aspect of your phone system. When you’re armed with the necessary information, you can craft a phone system that perfectly matches your business’ changing needs.

Features and Upgrades

With both a hosted and an on premise IP PABX solution, you’ll be able to add features and take advantage of upgrades. The difference is in the timing. With a hosted system, your provider will be implementing solutions across the board for all of its customers. This could be a time consuming task, and you’ll be left waiting to be serviced.

Using an on premise system, it’s all DIY. You’ll enjoy tight control over your system and know it inside and out. You’ll also dictate how quickly new features or upgrades are implemented. However, you don’t have the buying power that a service provider does, and your budget might not be able to absorb the cost associated with the new features or upgrades you want. In short, although you can theoretically implements new features and upgrades faster, you might not be able to afford them.

Due to low startup costs and minimal management, most small businesses can benefit from a hosted IP PABX solution. But every small business has its particular requirements. If you’re a small business owner trying to decide between a hosted and an on premise IP PABX solution.