VoIP Choices

VoIP_webHosted, managed and on-site deployments offer different advantages.

As IP-based communication technologies continue to mature, switching to Voice over IP (VoIP) is an increasingly easy decision for organizations of all sizes. Beyond the potential for significant cost savings, VoIP has become the cornerstone technology for numerous business-enabling applications that improve productivity, efficiency and disaster preparedness.

Deciding the best way to deploy VoIP can be a more difficult decision, however. The major options to consider are hosted solutions, on-premises deployments or managed services. While each choice offers substantial business benefits, understanding their differences is important to organizations in deciding how to best implement VoIP to reduce costs and gain efficiencies.

On-Site VoIP

With an on-premises VoIP system, the organization purchases, deploys, operates and maintains all its own equipment, including an IP-PBX, servers, routers, cables and other devices. The IP-PBX is the switching system that routes all voice, data and video transmissions internally and transmits all external calls to the telecom provider’s central office.

An on-premises solution may provide greater control over the telephony environment, including the ability to manage features, expansion and security. Organizations may have greater flexibility to develop custom solutions to meet specific requirements. If the organization has the proper in-house management expertise, an on-premises solution may also deliver lower monthly recurring costs for management and maintenance services.

However, organizations lacking that expertise could wind up with a poorly performing system that does not meet their needs. In addition, on-premises solutions involve significantly higher initial equipment and setup costs as well as higher long-term maintenance costs.

Hosted VoIP

Hosted VoIP delivers all of the business-class telephony features without the upfront costs and management expertise required of purchasing an IP-PBX. A service provider houses most of the equipment and handles all the resources the phone system requires to operate. Service is typically delivered on a simple “per-seat, per-month” cost basis, and upfront costs are a fraction of those for traditional PBX equipment. Since the equipment is owned by a service provider, organizations are relieved of the risks of equipment obsolescence.

One drawback to a hosted solution is the lack of customization. Hosted VoIP providers are unlikely to change or adapt services for individual users, although there are some hosted VoIP providers that will customize feature sets for businesses.

Managed VoIP

On-site VoIP as a managed service is another option that combines some features of both on-premises and hosted deployments. With this arrangement, a service provider deploys an IP-PBX at the customer’s site. The customer has the option to buy or lease the installed hardware, but the service provider handles the ongoing remote management of the service. Managed VoIP gives an organization the option to own and control all its own equipment, while offloading the management responsibilities to a provider with proven expertise.


Each option has its advantages and can yield excellent results. When investigating options for VoIP implementation, organizations should ask the following questions of vendors and service providers to help in making the right call:

Maintenance and Upgrades: Are there costs for additional maintenance and upgrade fees so your business can maintain functionality and stay competitive? Are there additional fees for server and operating system maintenance?

Capacity: Are there additional costs if your business grows?

Licensing: Are there licensing costs associated with IP functionality for the system and/or handsets?

Expense: Does the solution require an upfront capital purchase or is it a monthly fee?

Data Switched Network: Is best-in-class data switching gear included along with the maintenance and configuration of the equipment?

Trunking: Are there any impacts with call setup and call routing within the IP-PBX at the customer’s site versus a hosted VoIP solution? Will your customers receive a busy signal with either option?

Disaster Redirect: In the event of a power interruption or a cut circuit, will the system reroute incoming calls to a cell phone, voice mail or remote location?