Cloud based business phone system vs on-premise

Thursday, 24th February 2022
Cloud based business phone system

When deciding on the best phone system for your business you should consider whether a cloud based phone system or an on-premise solution would best fit your business needs. In this article we take a look at both options to help you determine the most suitable phone system for your business.

Cloud based phone system

A cloud based phone system hosts your business phone in a secure server that is located in a dedicated data center. All functionality and features are accessed online through the internet, including voice and video calls. Cloud based phone systems can be accessed anywhere in the world and only require a stable internet connection to get up and running.


The single and most important requirement of a cloud phone system is internet connectivity. If you have a reliable internet connection in your business, then a cloud based phone system offers many benefits that can be helpful for all business types and sizes. Even if you do not currently have good internet connectivity, investing in a better internet package and a mesh WIFI system could prove to be cheaper than the initial investment needed for an on premise business phone system.

Flexibility and growth

If you operate in a market where flexibility is required, or your business is still developing and growing, a cloud phone system would be best suited to your needs. Cloud phones are managed online, adding new employees or expanding the features you need as a business is easy and quick. On-premise business phone systems require phone lines to be manually installed, this is expensive and requires time. Any new or updated features may also require manual updates which are difficult without trained experts.


Cloud phone systems also provide flexibility to the users as they can be accessed through any device with an internet connection. Employees can work from home or use their mobile phones to provide the same great service they would provide if they were in the office sitting at a computer with a desk phone.


Business systems work best when they are connected and integrated. If you want to improve efficiency a cloud phone system can integrate into your CRM. Integration provides employees who answer calls with more information on the caller and the services or products they have purchased. This additional functionality can improve efficiency and the number of calls an employee is able to answer.

On-premise business phone system

On-premise business phone systems come in two forms, the first uses phone lines to connect calls, and the second uses IP technology and the internet to deliver phone calls. Each system requires an onsite PBX box which holds the software and runs the communications system. This can be expensive to install and maintain unless you have the right people and knowledge within your business.

Control and ownership

If your organization requires complete control and ownership over all systems and software, then an on-premise business phone system would be suitable. Unlike a cloud based phone system the hardware sits within your business location and is owned and controlled by your businesses. All updates, maintenance and any management is your responsibility, this can be costly but if you have the expertise in house as part of your business operations it may be a better option.  Some organizations prefer this level of control and ownership especially when it comes to sensitive or protected data.

Poor connectivity

Businesses located in remote locations may find a reliable internet connection is not possible at this point. In this case an on-premise business phone system would provide the best option for connecting your business and providing communication services. Cloud phone systems require an internet connection, and if the connection is unreliable, the service will be substandard.

Emergency situations

Most businesses are not affected by this, but some will need to consider it. In an emergency, cloud phone systems cannot provide accurate location information. If someone calls 999 from a cloud phone in an emergency situation, the operator may not be able to identify the person’s location easily. In situations where emergency services are necessary, mobile phones or on-premises phones should be used to contact an emergency service provider.

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