Comparing the Costs of a Premises-Based Phone System & a Cloud Phone Solution

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Don’t miss the hidden costs when comparing the costs of a premises-based phone system and a cloud phone solutions. Consider the long-term costs – not just the initial hardware and installation.

To determine which system has the best value for your company consider the following 10 factors.

1. The Cost of Mobility

Integrating mobile calls with your business phone system has become a necessary part of business communications. Mobile integration allows you to offer the highest level of customer service and conveniently stay connected with your team no matter where you are. 

This feature is not the same with all phone systems.

With a premises-based system, mobile integration can be cumbersome and costly.

Mobile call integration with a cloud phone system is seamless and affordable.

  • How is mobile integration supported on this system?
  • Are calls routed in and out of the system? If so, what are the additional costs involved?

 2. The Cost of Capacity

On-premises systems do not have an infinite storage capacity. When you run out of space on your servers, you’re unable to record any more calls.

With a cloud-based system, your storage is delivered via the cloud, so you don’t have to worry about on-premises storage capacity.

  • What is the call capacity?
  • What does it cost to increase the call capacity?

3. The Cost of Obsolescence

It’s important to stay up-to-date in today’s ever-changing technological landscape. It’s frustrating to discover your hardware doesn’t support the new features you want to add. 

The hardware of a premises-based system typically has a lifespan of 7 years.

Cloud-based systems are an evergreen solution that continually adds new features and improvements.

  • What is the lifespan of this system?
  • Can it still be upgraded?
  • Is the manufacturer still developing features for it? If so, for how long?

4. The Cost of Maintenance

Maintenance costs must be factored in with premises-based systems. Hardware failure results in lost communications. This is an expensive issue, even if it’s temporary!

Direct maintenance costs are not your responsibility with a cloud phone system because the system hardware is located elsewhere.

  • What are the annual maintenance costs of the system hardware?
  • What are the annual maintenance costs of the system software?
  • How much can costs be expected to rise as the system ages?

5. The Cost of Integration

Do you want to increase productivity, streamline communication, and enhance the level of customer service your business provides? Integrating your phone system with your CRM (Customer Relationship Management) system can make it happen.

Third-party integration with an on-premises system normally requires a system integrator, which is an added cost and can be a complex task.

Integration with a cloud-based system is generally easy and can be switched on and off with the click of a button.

  • With which third-party applications can this system be integrated?
  • How much does integration cost?

6. The Cost of Redundancy

Sometimes bad things happen. If your communications system is impacted by unexpected events (like flooding, fire, or electrical failure), do you have a back-up system in place?

With a premises-based phone system, adding site redundancy will add an extra system to your costs.

Because a cloud phone system redundancy is automatic because the system is hosted in the cloud. Your business communications service is always available on multiple devices. 

  • How does the system handle calls if equipment is lost unexpectedly?

7. The Cost of Performance

A premises-based system has built-in limitations. The more features you add, the more you need to upgrade your system. Upgrades always come at a significant cost.

The cloud has virtually limitless capacity for processing power, no matter how many features you might add, so the performance of your cloud phone system is always optimized. 

  • Will the system slow down if we add features?
  • If an upgrade is required, what is the cost?

8. The Cost of Flexibility

Your call volumes can fluctuate, depending on the time of day, week, or year.

Premises-based phone systems need the capacity for your peak call times, even if that’s only a couple of weeks per year.

A cloud phone system allows you to pay for the peaks as and when they happen.

  • How flexible is the system?

9. The Cost of Management

Phone systems require maintenance and management. Especially when integrations with other applications and services are involved, the costs add up quickly.

If management is outsourced to a third party, you’re typically charged for a minimum number of service calls per year, whether you need them all or not.

With a cloud-based system, a large team of technicians or field managers is not necessary. Management is simple via your online interface. All remote sites can be managed from a single location.

  • How many hours per week would it take to manage our system? How many people are required?
  • How much will it cost to hire someone to support this system?

10. The Cost of Fraud

Protecting your company from costly fraud attacks requires you to keep your communications system secure.

Smaller premises-based systems are particularly prone to attacks.

A cloud-based system is protected in a highly secure network.

  • How many times has this type of system been hacked?
  • Does the manufacturer release any data on fraud occurrences?
  • Do I have to pay all the costs in the event of our system being hacked?

Don’t Be Surprised By Hidden Costs

Explore all the costs involved in your phone system. Ask questions to get a clear picture. Be sure about what you’re getting for the price you’re paying. 
To keep your research on cloud phone systems going, visit us here or give us a call at +1-800-497-5570.