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Hosted or On-Prem Phone System: Which is Right for You?

An overwhelming 84 percent of organizations say modernizing business communications is critical to success in the hybrid work era, according to a recent global survey from Techaisle. Choosing the system that meets your unique requirements can be challenging, however.

Voice-over-IP (VoIP) systems dominate the market today for good reason — they synchronize an array of communications and collaboration tools and deliver reliable communications across multiple devices and locations. A key decision is whether to select an on-premises or a hosted solution. In on-premises deployments, the organization owns and maintains all its own equipment. Meanwhile, hosted solutions are delivered via the cloud by a third-party provider that owns and maintains the infrastructure.

In this post, we will compare and contrast several features of these two options to help you determine which is best for your business.


Both systems have upfront and monthly service costs, but the initial acquisition and installation costs for on-premises hardware can be a drawback. Hosted solutions reduce upfront costs by eliminating the need to purchase, configure, deploy and manage gear. In addition, the subscription spending model allows you to improve cash flow, preserve capital and manage a predictable expense. Over time, however, on-prem management costs can be less expensive than ongoing per-seat subscription costs for hosted solutions.


On-premises systems allow greater control over functionality, security and customization. You can tailor the system to your specific needs, integrate it with other business applications and maintain complete control over data and call records. You sacrifice some of that control with a hosted solution where the phone system is located in the provider’s data center. However, some hosted solutions do have app integration capabilities.


Hosted phone systems can easily scale up or down to meet changing business needs — adding or eliminating phone lines simply requires changes to the subscription. On-prem systems are typically less scalable because they are designed for a fixed number of users. However, proper upfront planning can help support on-prem growth. When planning an on-prem deployment, it’s a good idea to select a modular system that can be easily expanded. You should also ensure you have adequate server capacity and network bandwidth to support potential expansion.


On-premises systems can be extremely secure for organizations with the staff and expertise to keep them properly configured and maintained. In addition, these systems can be isolated from other internal networks to prevent unauthorized access. There’s a widespread assumption that cloud-based systems are more vulnerable to hacking or unauthorized access, but that’s not necessarily true. In many ways, the cloud is potentially more secure than on-prem. Large cloud providers have the financial or staffing resources to provide much more robust security than most small to midsized organizations.


Hosted phone systems can be accessed from anywhere with an Internet connection, making them ideal for remote and hybrid work environments. Additionally, many hosted systems offer mobile apps that allow employees to use their smartphones as an extension of their desk phones. On-premises systems can be more challenging to access remotely, although VPNs can be used to enable remote access.

Let Us Help You Decide

IronLogix can take the stress out of your communications modernization efforts, no matter which deployment option seems best suited for your business. We deliver both on-prem and hosted phone systems from 3CX as turnkey solutions customized to meet your unique needs. We’d welcome the opportunity to discuss your communications requirements. Contact us at 803-454-6255 or schedule a free assessment to learn more about our offerings.

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