#1 PAYMENT METHOD
For many customers, the most apparent difference is the payment model. Traditional premise-based voice systems are typically paid for as an up-front capital expenditure, whereas hosted voice systems are almost exclusively paid for on a monthly basis via a Software as a Service (SaaS) model. In some situations, this single factor determines the preferred solution, as many small and medium sized businesses simply lack the financial resources to pay for an expensive phone system up-front. In other cases, organizations prefer the capital planning expenditure cycle. This is particularly true for many larger organizations, public companies, government entities and healthcare providers.
#2 QUALITY OF SERVICE
Premise-based phone systems operating with dedicated voice lines from local service providers and supported by local technicians have enjoyed a long track record of delivering a high-quality experience to the end user. This is still true today. On the other hand, hosted systems were initially associated with lower call quality and more service issues. This is no longer true. Improvements in bandwidth availability in most markets, coupled with better network assessments pre-deployment, have made cloud voice systems reliable for enterprise communications. One enduring difference is that many hosted providers try to deliver all of their technical support remotely, whereas most premise systems are paired with local service and support.
The biggest determinant here is the size of the deployment. For companies with fewer than fifty or one hundred seats at a given site, the hosted service providers are typically going to be less expensive than their premise alternatives. Cloud providers usually incorporate unlimited local and long-distance calling together with a new phone instrument and robust feature set all for a single monthly fee. However, this paradigm flips as the number of seats at a given site reaches a hundred or more. The costs of purchasing and maintaining an on-site system scale better across many different users than the per-line per month model of most hosted providers.
The era of BYOD (bring your own device) is well underway, and it is here to stay. More and more employees are utilizing their cell phones and tablets in the business environment, and companies are looking for ways to integrate these end-points with their communications infrastructure. Many premise systems have some degree of mobility offering that can certainly enhance the user experience. The hosted providers are at a distinct advantage because of the way they can seamlessly re-route traffic across
different networks and devices. This capability makes it easier for hosted providers to offer neat features like push/pull calling, incorporate remote workers and deliver meaningful business continuity.