Both hosted PBX and on premise PBX have positives and negatives. But before we can begin comparing and contrasting, it’s important to understand the fundamentals of each of these systems before we launch into face-off.

Hosted PBX puts a lot of the burden of managing a phone system on the provider since they are housing the equipment and tech necessary to make your phones work. Your phones will plug into a router/switch and from there everything is handled through your provider. You are charged a monthly fee by your provider for this service.

And now looking at on premise PBX (IPPBX). If you remember those old panic­-inducing closets full of wires and blinking lights, well you aren’t too far off the mark. The major difference from that closet to what we now know as IP­PBX is the routing is done with today’s technology. Signaling goes from your IP phone to the IP­PBX server using a LAN (local area network). All of this must be managed by you or a local technician.

So with that said, let’s get down to brass tacks!

And since this is always on the forefront of our thoughts, COST. IP­PBX can have very high initial setup costs. When you are running a medium sized business (or heavens forbid ­starting!) this can be scary and daunting. You are also looking at potentially higher maintenance costs. I don’t know about you, but my wallet is letting out a little cry right now! On the other hand, hosted PBX has a much lower initial cost and setup, and you will not pay maintenance costs, because it is all included. But to be fair, your network must be able to support hosted PBX and some upgrades might be at your expense. Aside from that, expansion expenses are a thing to consider. Hosted PBX does make it as simple as purchasing more IP Phones, while IPPBX means purchasing new phones AND additional programming time (on your dime).

Tech support is another thing to consider. When you go with hosted PBX your provider will handle new feature installations.There’s also no trouble when it comes to picking and canceling virtual numbers. Another great thing, all patches and upgrades will be handled by provider! And in case of emergency, calls will be sent to v/m or mobile phones thanks to safeguards put in place by the provider. The same can’t be said for on premise PBX. You will need someone who is tech savvy and can properly handle the system. Expansions and upgrades can consequently be VERY complicated, and leave you with a headache. And in case of emergency, bye bye system!

I don’t know about you, but I like the idea of less headache and less stress on my wallet so I can focus on running a business!