Hosted telephony has gained popularity and a decent amount of exposure in the media recently, says James Slaney, co-founder of Dubber. Both managed and hosted telephony systems have seen a significant increase in uptake in recent years, whereas on-premise PBX is evidently in decline.

A recent survey of telecommunication service providers by Broadsoft released earlier this year indicated that more than half of all businesses are anticipated to adopt cloud based services by 2020, at which point they will surpass the more traditional on-premise PBX systems that have dominated the market for decades.

While communications analyst MZA also detailed the declining PBX market in recent reports, they’ve also highlighted that most small businesses are still using PBX, rather than making the move to hosted telephony. For SMEs, and indeed larger organisations – with what will often be a pretty substantial legacy PBX hardware estate – there are four main factors to consider when choosing between the two solutions.

Cost

The lack of CapEx required to implement a hosted system is a clear advantage of hosted systems over PBX. This appeals to businesses of all sizes, regardless of whether they are looking to replace their existing hardware estate, or are just setting up their operation. There is no hardware necessary, which reduces the storage space required as well as power costs associated with running servers. With on-premise PBX options there are also installation costs on top of hardware expenditure.

Larger organisations will have greater CapEx, as costs only increase with the size of the hardware required, but the prospect of ripping out a business critical system and replacing it can be a daunting prospect for IT departments. The advantage of replacing PBX with hosted solutions is that the functionality can gradually be replaced over time with both systems running in tandem, until telephony services are fully migrated over to a managed or hosted cloud solution.

However, monthly subscriptions for hosted telephony can work out more expensive over time, depending on the services and the size of the enterprise. Considerations need to be made regarding the features required by the business, as there may be extra costs that are not included in basic hosting packages.

Time

As well as installation costs, the time required to implement an on-premise PBX solution is an inconvenience. Cloud solutions offer the advantage of rapid deployment, meaning installation costs are virtually eliminated by the DIY approach to implementation.

When choosing a telephony option, installing a new infrastructure is a significant commitment. PBX solutions will need to be updated over time, and replacing hardware or enhancing features can take weeks to integrate. These changes can often lead to communications downtime that will need to be scheduled to reduce inconvenience as much as possible.

The most hardware that will be required is the phones themselves and increasingly, hosted UC systems make use of desktop and mobile devices to deliver the complete suite of services. Software updates are maintained by the cloud solution provider, meaning you stay constantly up to date without requiring the IT team to implement them across the entire estate.

The author of this blog is James Slaney, co-founder of Dubber

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