Premise vs Hosted IP PBX – Which One is Right for You? (Part 1) |

Premise vs Hosted IP PBX – Which One is Right for You? (Part 1)

So, you’ve decided to move to IP-based communications! Congratulations on having made that decision. The next fork in the road involves choosing between a premise-based or hosted IP PBX. Read on. We’ll help you make your decision by providing some considerations that you won’t see elsewhere on the web.

Let’s first outline the areas we need to consider. Then, we’ll examine each one in greater detail. The areas of focus include: CAPEX and OPEX costs, usability, and survivability.

CAPEX and OPEX Costs

CAPEX Costs

The two options diverge significantly in this decision space. The premise-based PBX option requires purchase of the PBX, a router, as well as a sufficient number of telephone instruments to meet your business’ needs.

If you choose the hosted option, your only CAPEX expense is the cost of the telephones, and a router. There is no other on-premise equipment required. (At CompuVoIP, most customer are eligible for a rebate on their phones..so the net cost for their telephones is zero!)

For a 75-seat solution, a typical premise-based PBX solution would cost $75,000 contrasted with the much lower $22,500 required for a hosted PBX system.

OPEX Costs

The numbers tell an interesting story on the OPEX side of the spreadsheet. The premise-based PBX demands care and feeding. Software upgrades and patches, feature upgrades all require the expertise of a trained PBX administrator. Adds, moves, deletes also need to be processed by the PBX administrator. While this may not require a full time position, these OPEX costs are directly attributable to the premise-based PBX.

The premise-based PBX would incur an additional cost associated with a maintenance agreement with the manufacturer to protect against hardware malfunctions. No such maintenance agreement would be relevant in the hosted-PBX scenario.

When it comes to monthly recurring charges, the premise-based PBX has a definite edge on usage charges. Let’s look at two scenarios:
Scenario A:

This enterprise requires 20 telephones. 6 of those telephones are used actively each day. The other 14 are courtesy/convenience phones.

Using typical pricing, a hosted PBX user would be charged 20 x $8 per extension and 6 x $30 for the active extensions for a total of $340 per month.

The monthly recurring charges for the premise-based PBX would be 6 x $30 or $180 per month  – a net difference of $160 per month, or $1920.00 per year.

Scenario B:

This small enterprise has 6 active phones.

Using typical pricing, a hosted PBX user would be charged and 6 x $8 for each extension and 6 x $30 for the active extensions for a total of $228 per month.

The monthly recurring charges for the premise-based PBX would be 6 x $30 or $180 per month – a net difference of $48 per month, or $576.00 per year.

(To be continued next week)