Comparing In-House vs. Hosted VoIP Solutions for Your Business

Small start-ups to large enterprises are making the switch from costly and limited traditional phone systems to advanced and cost-effective business VoIP phone systems. 

Nevertheless, you may be unclear about the differences between in-house or hosted VoIP solutions. 

Below, we provide you with a simple, straightforward overview so that you can better decide which option is right for your business.

The Difference Between In-House and Hosted VoIP Solutions

In-House VoIP Solutions

An in-house VoIP solution (also called premises-based or on-premises) involves installing hardware at your location, which connects all of your phones together. Call traffic is then routed in/out via your traditional phone line.

Hosted VoIP Solutions

With a hosted VoIP solution (also called cloud-based), there is no hardware installed at your location. Everything is maintained at your provider’s datacenter. Call traffic is routed to that datacenter via the internet (broadband and Wi-Fi).

Key Difference #1: Up-Front Investment

With in-house VoIP solutions, there is a substantial up-front investment, because costly hardware has to be purchased and installed.

However, with a hosted VoIP solution, the up-front costs are minimal. You simply purchase the desired number of certified VoIP phones (which are inexpensive) and if necessary, a managed router that can be accessed and optimized by your provider.

Key Difference #2:  Maintenance

With in-house VoIP solutions, you have to maintain your hardware and resolve any technical issues or errors – which can put a strain on your IT staff. Plus, you are obliged to purchase and install more hardware if call traffic increases due to adding more employees or existing employees are using more bandwidth (i.e. having more web conferences), and so on.

With hosted VoIP solutions, all maintenance and service issues are handled fully by your provider, and at no cost. Upgrades to the system to increase capacity and traffic volumes are also provided on an ongoing basis, and again at no cost.

Key Difference #3: Mobility

In-house VoIP solutions do not support employees in other locations or on the road. This is simply because, as noted above, employees must be within the VoIP coverage area, which is the physical location.

On the other hand, hosted VoIP solutions are designed for mobility. As such, your employees can access the system anytime and regardless of where they are – with a customer, during their commute, etc.

Key Difference #4: Scalability

Adding new VoIP phones to an in-house VoIP solution requires purchasing and installing new equipment, which is costly and time consuming. Furthermore, you can get saddled with more capacity than you need, which is money down the drain.

However, a hosted VoIP solution scales easily with a “pay as you grow” model, which means that you simply purchase additional licenses when more capacity is required. If this changes due to contraction, downsizing or any other reason, you simply let your licenses expire. There is no sunk cost or wasted money. Licenses can range from 5 to over 5000.    

The Bottom Line

Compared to traditional phone systems, without question VoIP is a major step up in all areas: cost, mobility, flexibility and productivity…and the list goes on!  Yet, as clarified above, there are some key differences between in-house and hosted VoIP solutions.

And in that battle, hosted easily comes out on top -- especially for small and mid-sized businesses.

Learn More

To learn more about reaping the rewards of a hosted VoIP solution in your business, contact Votacall today. Your consultation with us is free, and there is never any risk or obligation.