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On-Premises Phone Systems vs. Cloud Phone Systems: Which is Best Suited for Your Business?

Host on-premises or on the cloud? This is a common consideration for many business owners and communication managers looking to upgrade their enterprise’s phone system in this digital era. 

To make the most suitable choice for your business, you’ll need to consider whether the phone system facilitates staff flexibility and what features are required to achieve consistent performance. 

The increased popularity of cloud hosting for business’s phone systems shouldn’t come as a surprise. According to recent data, up to 96 percent of companies currently make use of cloud solutions for communications. This is largely due to the scalability of cloud servers. 

This guide will explore the key differences between these two communications systems to help you decide on the best one for your customers’ needs and your operational model.

What Makes Cloud Telephony Different from On-Premises Telephony? 

Traditional telephony involves the on-premises installation of phone systems through the linking of all company phone extensions and their subsequent connections onto public phone networks. Advanced on-premises phone systems also incorporate VoIP services. 

Cloud-based systems, on the other hand, facilitate linkage of a brand’s network of phone extensions using the internet. Where on-premise telephony uses desk phones, cloud phone systems utilize softphones. 

Advantages of Cloud Phone Systems vs. On-Premises Phone Systems

Here are a few benefits you can expect when investing in a cloud phone system:


The most noticeable upside that cloud telephony has over traditional telephony is the degree of scalability that it gives businesses. It allows for service adjustments in accordance with seasonal and industry fluctuations. 

What’s more, cloud phone systems allow for automatic installation of updates, as opposed to traditional phone systems, which need manual upgrades that could be time-consuming and cause downtime. 

No Installation Costs 

You don’t have to invest heavily in the initial installation or PBX maintenance — as is the case with on-premises systems. Cloud phone systems don’t require significant capital outlay, making it suitable for a wide range of businesses, especially start-ups and small businesses. 


With cloud phone systems, your team doesn’t have to work from the office. They can work anywhere with access to good internet. Remote working offers your team more flexibility to plan out their day, making them more productive

Quick and Easy Call Management 

Cloud phone systems come with extra features that allow your team to organize and manage business calls. Besides streamlining your processes, this allows you to easily collect data from your customer base.  

Advantages of On-Premise Phone Systems vs. Cloud Phone Systems

Some businesses still prefer on-premises solutions versus their cloud based counterparts.

Here are some of the advantages of on-premise phone systems:

Control of Communication by Management 

On-premises telephony allows for on-site controllability by communication managers and business owners, but will most likely require someone who is trained to do so. A cloud-based phone system can be easily configured and maintained by anyone and changes can be made on the spot. Also, be on the lookout for vendors who offer top-notch support.

Cheaper to Setup (but look for hidden costs)

On-premises telephony usually involves a one-time payment during installation, but can cost you more in the long run with maintenance and downtime. Conversely, cloud telephony usually requires clients to pay a monthly hosting rate as well as upfront costs for the endpoints, but overall can be cheaper in the long run.

Scale Up Your Business with Reliable Telephony Services

For reliable, unified telephone communication systems that’ll help drive collaborative partnerships for your small or medium-sized enterprise, reach out to learn more. 

Contact us at 888-219-3038 to learn more about our services. Our support is available 24/7.

About The Intermedia Team

Intermedia is a Unified Communications as a Service (UCaaS) and business applications provider hyper-focused on delivering easy-to-use and secure communication and collaboration solutions to SMBs and the partners that serve them. More than 120,000 business customers and 6,600 active partners rely on Intermedia for greater reliability and productivity.