The Advantages and Disadvantages of On-Premise Phone Systems


1. You own it

An on-premise (on-prem) system is yours. You own and manage it. You're not dependent on anyone else to get it to work, which of course means you are responsible for making it work. But if you don’t want to do that, you can hire out some parts of the maintenance to a vendor. Just be sure to pick one that is trained and certified on your specific system.

2. It's highly customizable and robust

On-premise phone systems get installed with all the features your business requires. Plus, it has a long shelf life--typically, 10 – 20 years if run in a proper environment (not to hot, not to dirty). Overall, on-prem systems offer every day performance and relatively easy maintenance.


1. You own it

You have to buy your on-prem system out right ($500 - $1,000 per phone). Cost is not necessarily a disadvantage, because I do believe you get what you pay for in telecom. Still, the price of on-prem systems is an obstacle for some businesses.

As mentioned above, you're responsible for the programming and the maintenance of your on-prem system. If you don't have the time or expertise to do so, you end up relying on vendors. That means you must take time to find a great vendor (because there are many not so great vendors out there). Overall, the on-prem system ends up being a piece of your business that you have to manage. That means time away from your core competencies.

2. On-prem systems can go down

At the moment, I'm helping a client trouble shoot a down on-prem system (PBX). It's coming up 24 hours that his customers have had no way to call in. What a mess! It's because of cases like this that I'm becoming more and more of a fan of hosted phone systems.

In fact, Disaster Recovery (DR) is a major reason why people are pushing their phone systems into a hosted platform.

One alternative:

Indeed, one way to overcome the disadvantages of on-prem systems is to buy hosted phone service (hosted PBX) instead. It’s big advantage is that you don’t own it. There’s no box to buy and maintain. You just need to make certain you buy your hosted service from a quality provider.

More resources

  • You can read more about hosted phone service here.
  • Businesses with multiple locations interested in managed PBX can read more here.
  • Read more about business disaster recovery here.
  • Here's a list of the region's top 40 best-in-class providers. We work with them all.
  • My free brokerage service exists to help you select which telecom provider is best for your business needs.
  • Give me a call direct with any telecom questions you may have: (206) 420-0140. No obligation. No B.S. 
  • Read testimonials from some of my 500+ clients here.

About Caisson: Caisson is business phone and Internet service from telecom expert, Brian Wade. He's one of the 1st in our region to breakaway from the high-pressure sales methods used by direct providers. Instead, Brian combines knowledge and heart to deliver a better telecom buying and management experience to businesses.