Are you shopping for Hosted Phone Systems?
We are often asked our opinion on using a "Hosted PBX" instead of a traditional
on-premise Telephone System. Here is a little information regarding the two options.
Traditional on-premise Phone Systems
First let me say that we are somewhat bias when it comes to
traditional on-premise telephone systems. After all, we have been installing them since it became legal to do
so, many years ago.
||Before the government breakup of the Bell System in
1984, it was illegal to connect your own telephones to the telephone network. That meant you
needed to pay the telephone company for every phone you had. It is similar to the way the
cable television industry works today. Lets hope they change the TV law soon as
We have installed thousands of phone systems from various
manufactures and many are still in use after 15 years of service. On-premise systems are very
reliable, in part because they rely on normal telephone lines which are delivered separately from each other.
These lines are typically installed by Verizon, Sprint or AT&T but are also available from Optimum
Voice, Time Warner Cable, Comcast among others.
These are some common on-premise phone
The alternative to an on-premise Phone System - A Hosted
Today there is a lot of hype and some confusion regarding "Hosted Phone
Systems". So what exactly is a Hosted Phone System or Hosted PBX? A hosted PBX system delivers PBX
functionality over the Internet. The PBX hardware is located off premises, usually at
the company providing the service. This prevents the end user from having to purchase
on-site PBX equipment and reduces the up front costs. Users still have to purchase the telephone sets for each
Another advantage is the use of VoIP telephone circuits (SIP Trunks) in place of the Plain Old Telephone Service
(POTS) lines from the phone company. These are typically bundled with the Hosted PBX and included in the monthly
contract price for the system. While these VoIP lines work fine for most voice calls, many times they do not
support fax machines, alarm systems or modem transmissions. This requires users to order regular telephone lines
for such devices and reduces some of the cost savings. Many providers do offer Internet faxing capabilities but
they have limitations such as faxing preprinted forms or other hard documents.
The Pros and Cons of a Hosted PBX
Lower up front costs
Use of cheap VoIP telephone lines
Allows incoming calls to ring multiple locations
Reliability is only
as good as the Internet Connection
Do not support Fax machines, alarm system or modems
Loss of control and must use the contract company for service
Ongoing and unpredictable long term costs
Poor voice quality at times
Other things to consider
Unlike Hosted PBXs, an on-premise phone system does not rely on the Internet which can be extremely
unreliable for real time voice traffic. Every call (incoming or outgoing) within a hosted PBX travels
across the Internet. This means if your network, router or Internet connection fails you cannot make or
receive calls. Many Hosted PBX providers say they will reroute your calls in the event of a problem but
this can often take a long time or not happen at all.
With an on-premise system, if one line fails you have others to use to make
and receive calls. This is vital in most business environments. Many on-premise systems today
can use a mix of low cost VoIP trunks as well as standard POTS lines providing the best of both worlds. Use
the VoIP lines to call out and still have the reliability of regular lines if the Internet goes down. Because
an on-premise system can also use standard phone lines, it is not necessary to have separate lines for Fax, alarms
and modems. You can simply connect the lines to both the phone system and other devices in
One of the most overlooked advantages of an on-premise system however is the long
term operating costs. Purchasing the PBX hardware may cost more up front, however there are
less long term operating costs. When you consider many of the lease options available today, most
companies will actually own the equipment within three to four years. Leasing a system is usually
comparable to the monthly contract fees charged by hosted PBX providers. The difference is that at the
end of the lease of on-premise equipment the monthly recurring cost (MRC) drops dramatically. With a hosted
PBX you will be charged a monthly contract fee for as long as you use the system. There is little guarantee
that the hosted PBX provider will not go out of business or merge with another provider who raises the
Here is just one of the letters we have received from people using hosted PBXs who wish they didn't (or don't
Today we experienced a disruption in our services that impacted your voice service.
The outage appears to have been caused by a data failure with one of our underlying carriers, and we are working on
identifying the root cause and why our backup services did not fail over as they are designed to do.
Service has since been restored to most of our customers, and we are in the process of
fully restoring service to all customers. If you are currently without service, please unplug the power connection
to your equipment, wait a few seconds, and then reconnect the power connection.
We understand the importance of providing reliable phone service to you and deeply
regret the interruption this issue has caused. Delivering on and exceeding the service level goals we set for
ourselves is our top priority.
We value your business and thank you for your patience.
If you are considering a hosted PBX for your new or existing business, please give
us a call. Let us show you how you can accomplish many of the same functions with a reliable on-premise
phone system. Also keep in mind that you can lease a phone system for the same amount you spend every month
on a hosted PBX. The difference is that once these lease ends, so do your monthly payments. With a
hosted phone system you pay forever!
Give us a call today to keep control of your
telecommunications. Call Now: 800-361-5839