Aren’t we all just headed to the cloud, making this comparison moot? Not exactly. The two are not black and white. Cloud communications is a broad field, ranging from single-function apps to full hosted UC services. PBX systems, which are now basically VoIP telephony, can vary as well from on-premise hardware to hosted cloud solutions. So, while we’re discussing UCaaS Vs. PBX, we really are comparing cloud-hosted and on-premise solutions.
Cost
Cloud solutions certainly have the advantage of lower up-front costs. There are no hardware servers or switches to buy, no software to purchase. Indeed, the entire infrastructure on which the communications system is based is already in place, fully functioning, and accessible through a simple subscription.
However, the story of costs does not end with upfront purchases. Once you have bought your on-premises PBX and accompanying UC software suite, that is it in terms of system outlay. With a UCaaS solution, you are tied into spending long term, usually in the form of a monthly or annual bill.
The decision on costs therefore often boils down to a preference for financing your comms system through capital expenditure (CAPEX) or operational expenditure (OPEX). Many businesses choose cloud solutions out of preference for OPEX, for reasons ranging from more straightforward accounting to the fact that comms equipment does not retain value well as a tangible asset. Ultimately, however, this is a decision for each individual business.
One other factor which comes into play is Total Cost of Ownership (TCO). Whenever you buy a piece of equipment to purchase outright, the spending doesn’t quite stop there. There are also running costs to bear in mind, for everything from repair and maintenance to potentially having wages for IT staff to manage the system. For managed cloud services, although not necessarily for downloadable apps, all of this is included as part of the contract. This is why many people argue that cloud solutions offer lower TCO than on-premises. (from an article on Commstrader.com)
Flexibility
We’ve often touted the value of cloud when it comes to flexibility. The built-in ability to add or remove users as business needs change in the cloud is a tremendous asset. It’s also incredibly simple to select and deploy new apps to the entire company. All you need is enough bandwidth to accommodate it all.
This doesn’t eliminate the usefulness of on-premise solutions, however. “For a big company operating multiple sites, virtualization arguably makes it just as easy to create a large-scale network these days. Most software solutions come with downloadable apps to integrate mobile anyway. PBX solutions are usually better for connecting to PSTN telephone lines – cloud solutions need additional SIP trunking services.” (Commstrader.com)
Choosing Your Solution
While cloud solutions certainly have a reduced TCO, lower CapEx, and a clearly established set of benefits, a complete shift to the cloud may not always be the right answer. You may have the latest and greatest in on-premise hardware and can’t justify ditching it. You may have a top notch IT team that you are certain add value to your business. They right solution for you may be a hybrid. The key is to find a strategic partner to help assess your current infrastructure and your future goals and develop a strategic implementation plan that works for you.
Corporate Technologies Group can be that partner. We are vendor-agnostic. We have strategic partnerships with over 140 different Cloud, VoIP, and WAN network service providers and we understand the world of API interface. Not all service providers are able to offer this integration, we can help you navigate the API and Cloud World. We support clients from network design to implementation, post-installation support and remediation. We can ensure your infrastructure is built to suit your business needs now and into the future.
Learn more about your cloud hosting options by downloading our white paper, “Public, Private, and Hybrid Cloud”.
