Hosted vs. On-Premises Voice Service: Comparing the Differences for Your Company

Comparing the Differences for Your Company

Which is better for your company:

On-Premises Voice Service? — where your company owns, story houses, manages, and has ultimate control over its voice system’s hardware, software, security, performance, and configuration.

— Or —

Hosted Voice Service?  — where a telephone service provider does all of the above, while your company still exercises as much direct control as it chooses over security, performance levels, and end-user configurations.

On the bases of implementation costs, long-term costs, security, and convenient simplicity for the client, Rockefeller Group Technology Solutions, Inc. (RGTS) would recommend hosted voice services for most companies and most operating circumstances.

For many years, hosted telephone service has offered considerable advantage over on-premises service for most companies. Over the past decade, with the widespread growth of VoIP (Voice over Internet Protocol) and non-proprietary open technology standards, the advantage gap has widened further. Now, even the largest enterprises with the longest outlooks find they’re better served through a hosted solution.

But at RGTS, recommending hosted service over on-premises service is not a product-driven or sales-driven reflex. RGTS is a product-neutral and manufacturer-neutral service provider with extensive working experience in both hosted and on-premises service solutions. RGTS’s experience with both approaches extends more than three decades.

Two examples, outlined at the close of this article, illustrate the success that RGTS clients have achieved with each approach. In one example, a leading investment bank takes the on-premises route for its global VoIP network. In the other example, a major hospital system in New York City achieves major cost savings and performance gains through RGTS’s hosted solution.

Three Comparisons Are Quick and Easy

Weighing some differences is easy. Three of the simplest comparisons:

Three of the simplest comparisons

Three Considerations Are More Nuanced

Weighing some other differences is not as easy, and may appear to be counterintuitive:

Weighing some other differences is not as easy, and may appear to be counterintuitive

Monthly service charges are lower when a company has its own on-premises telephone system. Also, the company is shielded from rate hikes by a service provider. Service charges are not eliminated entirely, however: There is still a service cost to connect to and use the public switched telephone network (PSTN).

For a company to come out ahead financially with its own on-premises telephone system, the total lifecycle costs of buying, financing, configuring, upgrading, and staffing that system must be lower than the sum of the monthly fees for hosted service.

Sufficient time and scale are both needed to tip the financial outcome favorably toward an on-premises solution. But, as indicated earlier, widespread adoption and advances in VoIP and open technology standards over the past decade have pushed that financial tipping point ever higher and farther out, with ever greater uncertainty.

Where control over telephone service is concerned business VoIP service and open technology standards have ushered in scores of new applications and tools to give company managers and administrators unprecedented direct control over the security, performance levels, and end-user configurations of their telephone service. As a practical consequence, any control advantages that may have come in the past with an on-premises system are largely erased.

When hosted service comes from a carrier-grade provider such as RGTS, the security, reliability, and disaster resilience of its telephone service infrastructure will likely be higher than that of even the largest enterprise businesses.

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