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Telecom Strategy for Spring 2014

In a previous newsletter, we discussed the world of “hosted” or “cloud communications”.  Particularly after Hurricane Sandy, this technology became a hot topic with regard to disaster recovery in the regions affected.

The purpose of this article is to compare hosted (cloud-based) with premise-based systems to assist businesses in their choice of a telecommunications system.  Neither premise-based nor hosted is automatically the best choice for all businesses, large or small.

Premise-Based or Hosted Telephone System

Premise-Based Systems (Commonly Known as Key or PBX Systems)

Prior to the introduction of Voice over Internet Protocol (VoIP), premise-based systems were the most common telephone systems in the marketplace. Various manufacturers produce and market these telephone systems for purchase or lease depending on the size and needs of the business. There are still a significant number of premise-based telephone systems in place at businesses and currently being sold.

Some of the reasons that businesses may make this choice are:

  • Distrust of the “cloud”- Is it reliable?
  • Evaluation of one-time purchase cost vs. continuing expense cost;
  • Familiarity of premise-based systems - "This is the way it has always been done";
  • Increased control - the system is on the premises and can be easily understood and managed by company personnel.

Hosted (“Cloud-Based”) Systems

While researching telecommunications systems, clients will often mistakenly use the term “cloud computing” when they are really interested in “cloud communications”.

They are two different entities with one thing in common: both rely on servers that are off site. With the introduction of Voice over Internet Protocol (VoIP), companies are able to network their telephone systems utilizing this technology more cost effectively and reliably than the existing local and long distance networks. The idea of “secured” communications over the Internet quickly caught on, particularly for the multi-location enterprise. As these technologies became commoditized, pricing became affordable to the small- to medium-sized businesses as well.

Some of the reasons that businesses may choose hosted (cloud-based) systems are:

  • Depending on the hosted provider, these services are more reliable than premise-based systems. As stated in the beginning of this article, Hurricane Sandy illustrated that cloud-based systems provide for disaster recovery in a way that no premise-based system can. Competent cloud-based providers will host your telephone system on multiple servers in geographically separate locations. As an example, one provider has systems in New York and St. Louis with Dallas and Los Angeles as the ultimate backups. Another provider we have worked with has redundancy with servers in New York and San Diego. The ability to provide geodiverse redundancy is a critical factor in the selection of a reliable cloud communications provider.
  • Capital expenditures are virtually eliminated; companies can acquire hosted communications utilizing operating expenditures instead.
  • Hosted systems are never outdated; software upgrades are automatic. The hosted provider will “push out” software upgrades to clients at no expense to them.
  • Hosted communications programming is always at the control of the client. The telecommunications manager can access the system via a secure web portal from any computer with internet access. Most add, move, and change costs are eliminated by giving the client access and independence to manage their own system.

A sign that cloud-based communications is the wave of the future is that an increasing number of premise-based telephone system manufacturers are entering this marketplace with their own products.

Telecom Strategies is here to guide you in the selection, procurement, implementation, installation and ongoing usage and functionality of your telecommunications system whether it is premise-based or “in the cloud”.

Contact us today at:

Telephone Number: (610) 235-4340



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