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Cloud VS Physical VoIP

T3 Technologies / Innovation  / Technology  / Cloud VS Physical VoIP

Cloud VS Physical VoIP

This article will cover the key differences between Cloud Hosted and On-Premise VoIP telephone solutions.

In today’s market, with communication technology constantly changing, becoming obsolete, and new technologies emerging it can be challenging to decide what type of phone system is right for your company. There are two types of systems, an on-premise VOIP system, and a hosted cloud solution. This article will cover the differences between the two and help you decide what is best for you. We can help with the installation and configuration of whichever you determine is best for you

What is a Physical or On-Premise VOIP System?

A Typical On-Premises VoIP system is installed at your company’s office and gets managed and maintained there. This can be through a third-party vendor or through a company like us. These phone systems usually come with a high startup cost for equipment.

Pros and Cons of a Physical VOIP


  • Complete control over the system
  • Great for large businesses with high call volumes
  • Lower monthly Fees over cloud solutions


  • Managing remote employees, hybrid employees, and employees in the field is challenging and costly, and quality of service is often compromised.
  • Typically requires larger upfront costs to purchase hardware and licensing.
  • Requires costly IT equipment and support if your business has multiple locations

What is a Cloud-Hosted VOIP phone system?

A cloud-hosted VoIP system is all in the cloud and usually runs through software only. This means that maintenance is easy, and security, bug fixes, and feature updates can be sent remotely through the internet without updating hardware. Because of this, your startup cost is lower and does not typically require the purchase of hardware. However, these systems usually come with higher monthly fees.

Pros and Cons of a Hosted Cloud Solution


  • Great for any size business
  • Quick Installation and setup
  • Installation costs are lower
  • Works with traditional desk phones, computers, and smartphones
  • Easily add or remove users and extensions
  • Excellent solution for businesses with multiple sites, remote and hybrid employees, and employees that are regularly out of the office
  • No need for in-house IT staff to maintain it


  • Typically higher monthly costs
  • Call quality is dependent on your network quality
  • The Service provider holds control of the system

Which is best for you?

Choosing what system is best for your company can be difficult, and the correct answer is different based on every scenario. Weighing the pros and cons of each system and deciding your future scalability is key to making the right choice. For example, if you can’t afford the upfront costs of an on-premise solution, you could finance the system and lower your cash outlay. And while monthly expenses could be higher with hosted solutions, for some companies with very few users, the monthly bill could be lower than what you are paying your service provider for your phones today.

Luckily, companies like us are here to help you make that choice. If you have any questions about phone systems for your business, please get in touch with us for a free consultation, and we can help you choose the best solution for you.