Comparing Cloud vs. On-Premise VoIP Services

As in-house legacy phone systems become outdated, many businesses turn to cloud-based VoIP services. Last year, a survey found 77 percent of business owners believed cloud services could improve their operations but only 46 were percent actually using them. While it may seem daunting to move one of your company’s most important infrastructures into the cloud, hosted VoIP systems are a great choice for organizations of all sizes.

Getting Started

Unlike some on-premise VoIP systems, installation and setup is a breeze. As Fonality points out, “you don’t have to have a PhD in telephony or a team of IT gurus” on staff to be up and running in minutes. On the other hand, on-premise infrastructure setup and maintenance is growing increasingly complex as communication technology evolves. VoIP providers like Mitel and Jive incorporate all kinds of communication and collaboration tools into their systems to help organizations keep in touch no matter where they are.


Hosted VoIP phone systems are often more secure than on-premise setups because cloud VoIP providers constantly monitor the health of your system and move quickly to shore up any vulnerabilities. The security experts at companies like Grasshopper and ShoreTel stay abreast of the latest security news to mitigate risks before they impact your business.

Cloud VoIP systems also offer an extra layer of defense in times of outage and disaster. “Virtually all VoIP system manufacturers and most distributors have disaster recovery programs to deal with disasters. Take advantage of them,” recommends TechTarget. For instance, ShoreTel builds an “embedded continuity plan” directly into your system to quickly recover lost connectivity and protect your company’s most important customer access point.


Since your cloud VoIP provider does all the heavy lifting, VoIP phone systems are very easy to use. Administrative tasks are typically managed via web portals with dedicated support staff. Hosted systems work with the phones you already have, so there’s no need for long training sessions that get in the way of worker productivity. The mobile application development company MyFitnessPal chose Jive as its provider because it wanted “a hosted system that required little management on the customer’s end, allowing the company to focus on developing their app.”

When selecting a VoIP provider, you want a system that scales easily and grows with you. Setting up initial service takes about 20 minutes, compared to the weeks or months it takes to deploy an onsite VoIP system. Companies like let you instantly add phone numbers and user extensions in just a few clicks so you can quickly onboard new hires or assign unique numbers to your next advertising campaign.


Managed VoIP systems are a cost-effective way to get the most out of your phone system without a lot of upfront investment. You pay only for what you need, and system maintenance is handled by the provider, freeing you from unexpected expenses and overhead costs. While on-premise VoIP systems are a great choice for companies that want to avoid ongoing monthly expenses, they cost more to deploy and maintain. When you add in the costs associated with replacing onsite infrastructure as it ages out or fails, cloud solutions become an even more attractive option.

Heavily regulated industries like healthcare or banking are good candidates for on-premise VoIP phone systems. However, the number of benefits associated with cloud-based installations make hosted systems the best choice for many large and small businesses alike.

By: Lisa McGreevy

Bio: Lisa Hoover McGreevy is a professional freelance journalist and blogger with more than 15 years experience covering enterprise products and services, brand marketing, and emerging technology. Lisa is based in Tampa, FL. Contact her at [email protected]

Use our Best Price TM Tool to Find The Right Business Phone System For Your Business

Compare The Lowest Prices From Only The Best Business VoIP Providers

This will help us match you to providers
designed for your company's size.