Unlike landline phone systems, which require all equipment to be housed and maintained inside the business, VoIP systems offer the option of hosting everything on the premises or in the cloud.
Similar to landline systems, on-premises VoIP systems have all the PBX equipment installed and housed on location in each business. With this option, you are in total control of your system. You aren't relying on anyone else to make sure it is running, and you can configure it to your exact specifications.
However, since it is located in your business, your IT staff is responsible for all repairs or upgrades. On-premises systems also need to be professionally installed.
The cost structure for on-premises systems also differs from cloud-hosted solutions. These systems are purchased upfront and typically require one-time large capital expenditures for the PBX equipment, phones and installation. Besides the one-time charges, there are smaller recurring fees for the use of SIP trunking services or PRI circuits, which allow the systems to make and receive calls.
Another difference is security. On-premises systems don't have the same security concerns as cloud-hosted solutions, since all the data is stored within your business. Experts say businesses with serious concerns about keeping their calls and phone system data private are best served by on-premises systems. This option allows businesses to configure their firewalls exactly as desired to protect the phone system from any type of intrusion.
Other businesses well-suited for on-premises phone systems are large corporations that can afford the upfront costs and businesses that want a system they can specifically customize.
Cloud-hosted phone systems are becoming popular among small businesses. With this type of phone system, all the equipment is housed and maintained in the cloud by your phone system provider. Since everything is stored in the cloud, your phone system provider handles all maintenance and upgrades. The only equipment the business needs is the phones themselves.
Most cloud systems are essentially plug-and-play. Once you activate your service and receive your phones, they can be plugged into any Ethernet port, and calls are ready to be made and received.
The downside to cloud-hosted solutions is that businesses are at the mercy of the phone system provider to keep their service up and running. To ensure this happens, most of the top vendors have several redundancies built into their systems. This includes having multiple data centers so that if one goes down, the data can be transferred seamlessly to another to ensure the continuation of service.
Overall, the top phone system providers boast documented yearly uptimes of at least 99.99%. This means their service is only down a few minutes each year. To protect against hacking, most phone system providers encrypt data when it is transferred to and from the cloud, and have round-the-clock security at their data centers.
Cloud-based systems are totally controlled via online portals. From the portal, business leaders can add and remove users, assign phone numbers and extensions, and provide employees with access to the system. Employees can use the portal to check voicemail, set call-forwarding options, and make and receive calls from a softphone on their computer. Unlike on-premises systems that require large upfront costs, cloud-based systems have monthly fees. Most services charge per-user fees that include unlimited local and long-distance calls. SIP trunking services are also included in the cost. The only upfront cost with cloud systems is the phones.
Phone system experts believe cloud-hosted systems are ideal for small businesses because they have few upfront costs and consistent monthly charges that can fit easily into a budget, and don't require trained IT experts to keep them up and running.
Besides the PBX equipment that runs the system, the main component of a traditional phone system is the desktop phone. Most of the phones today are IP phones, which are compatible with all VoIP systems, regardless of whether they are hosted on the premises or in the cloud.
There is much variety in what type of IP phone you can connect to your system, including corded and cordless phones, conference phones, video phones, and speaker phones. Among the features that many newer phones offer are LCD touchscreens, presence status, power over Ethernet, integration with online calendars and programmable buttons.
While a few phone system providers have their own name-brand phones, most resell other brands. Among the more popular brands of IP phones are Polycom, Yealink, Panasonic, Sangoma, Grandstream, Snom, Digium and Aastra. For those who still prefer analog phones, many providers have adapters that can work with VoIP systems.