Cloud-Hosted vs. On-Premise PBX Systems

cloud vs on premise phone system

The merits of cloud-hosted vs. on-premise PBX systems is a hot topic in the VOIP industry. The goal of this post is to help explain some pros and cons for each configuration.

If you’re actively deciding between the two options, it’s best to conduct extensive research before making the leap, as whatever configuration you choose will have an ongoing impact on your company’s performance and budget.

Ideally, it’d be best to discuss your needs with your VOIP provider, who will be able to guide you through the decision-making process, but as a rule of thumb, understanding these three items is vital: location, access and budget.


In this instance, location does not mean a fixed point on a map, but rather, how many offices or work spaces your business operates.

For example, having your company based in Phoenix, Arizona, does not help determine whether a cloud-hosted system would be optimal for your business or not. It’s a different story if your business has locations in both Phoenix and Flagstaff. 

A quick anecdote will help explain —

Triton once helped a company that had four locations across California and Nevada. Previously, each location had its own on-premise PBX system, which meant this company had to pay for required licensing, tech support and maintenance for each office!

After a quick consultation, our engineers moved the business over to the Triton cloud, which connected each of their offices with one central phone system. In the end, this client saved money on licensing, hardware, costly phone lines and support. 

This project was a perfect example of the flexibility and cost savings associated with the Triton cloud, but it does not suggest that cloud-based systems are recommended for all businesses.

A business operating with one location may prefer to have an on-premise PBX system due to several factors including control and maintenance, which leads to our next point.


A large company may prefer having an on-premise system due to more complex networks within its organization. Having physical access to the PBX is important as it allows staff to troubleshoot any complications and monitor the system’s security. In addition, organizations with an on-premise PBX system can decide which staff members are granted access to the PBX.

These companies typically can afford to have their own experienced IT who are familiar with the company’s network and VOIP setup, such as VOIP phones, headsets, PBX hardware, networking equipment, etc. If a call quality issue arises, this team can easily troubleshoot the problem since the entire company would be using the same network. When physical parts fail or software becomes corrupt, having quick and easy access to your own PBX can be reassuring.

The true benefit is control. With an on-premise PBX system, you make decisions about your company’s VOIP capabilities on-the-spot. Yet, this autonomy comes at a cost.


An on-premise PBX system demands more up-front capital because of the hardware, configuration and tech support required from the onset. There is also the issue of adjusting VOIP preferences so that it meets the needs of the working team. Once again, an experienced IT staff could manage this, but it’s an added expense.

In the event of a power or internet outage, an on-premised system will require this same staff to solve the issue independently. A cloud-based system will continue to operate in the background regardless of the company’s physical location. Calls will be routed to cell phones or to other phone systems or call centers, and of course, Triton will be there to help.

This is why many companies are starting to favor the cloud-hosted option. A company will immediately experience lower up-front costs since configuration is simpler and there is no hardware to manage. Saving on this front allows a company to be more flexible with “when” and “where” its employees work. This encourages growth, individually and corporately, and explains why companies that started with the cloud stay with the cloud even after they expand.

What Works for You?

Cloud-based VOIP services are growing in popularity, but it doesn’t mean that this route is necessarily the right choice for your business. It really comes down to how much control you want over your company’s VOIP capabilities. It’s a question of value, not of “right vs. wrong.”

At Triton, we’ll happily configure your office with an on-premise PBX system, and we’ll even provide security and maintain the hardware for an added cost. We’ll also encourage any company or organization to choose the cloud if they value flexibility and saving on capital from the get-go.

A good resource for helping you decide between these two options is your own company’s goals. Think about where your company is headed and what you would want it to look like in the future. Thinking this way will naturally lead you in the right direction.