IT Peace of Mind

Hosted VoIP versus On-Site VoIP

By: SoftControl.Net, Ltd.

21 November 2014

IT Peace of Mind

We live in the day and age of fast-speed internet access. Considering how the internet

has taken over traditional ‘bricks-and-mortar’ domains as diverse as travel, banking, data

storage and even luxury goods shopping (providing these services safely, with great

convenience and often much cheaper), it’s surprising that businesses large and small are only now

making the switch to Voice-over-Internet Protocol (VoIP) phone systems in large numbers.

Why? Because of VoIP’s reputation for a more flexible, feature-rich and cost-effective substitute for

traditional analog phone systems.

Those who consider installing a VoIP phone system in their organization or business need to

consider, two options:

Hosted VoIP and

On-site VoIP PBX (Private Branch Exchange).

Before understanding which provides the better solution, they need to understand the two systems

key differences between Hosted VoIP and On-site VoIP PBX. The following paragraphs will help you

clarify your options so you can make an informed decision.

Option 1: Hosted VoIP

Businesses who select Hosted VoIP

essentially invite an outside

company to run their entire phone

operation. The company will then

only use a special software (and

occasionally hardware for

particular providers) for operating

and updating their system.

On top of the setup costs,

companies then need IP phone

sets. These set can purchased

outright or pleased depending on

your preference. The service

Provider of Hosted VoIP runs all other soft-and hardware externally.

Finally, the external provider looks after every aspect of call management.

Option 2: On-site Voice-over-IP (VoIP) PBX

The key difference between On-site VoIP and Hosted VoIP is that with On-site VoIP the business

accommodates all hardware and software on their own premises. This means your organization

would be required to purchase, administer and support all software and hardware, including all

required updates.

IT Peace of Mind

What do these differences mean?

Most of the functionalities offered by a Hosted VoIP system are also provided by a VoIP PBX system.

Both solutions can provide features such as:

Virtual receptionist (IVR),

Unlimited extensions

Free calls between extensions,

Conference calls

Calling groups.

There are some special features provided only by Hosted VoIP such as:

Emailed voice messages by email

Follow me.

The critical difference between the Hosted VoIP and On-site VoIP PBX is the startup and ongoing

costs, as well as flexibility, business continuity and ease of maintenance.

With a Hosted VoIP solution, there is very little to invest except for the initial start-up costs and the

IP phones. Any other costs for this solution are also easily managed. Since a contracted company

manages your telephone system externally, there will be no unforeseen additional maintenance

costs. And of course you won’t require your own trained IT staff to administer this system.

Additional fees can occur though if you require additional services, or when you add new users. You

may not need to change the phone system immediately though. Not all providers have the skills to

customize the system to match your needs and requirements exactly. Sometimes, features are

developed but not immediately offered to clients. And finally, if your hosted provider goes out of

business, the continuity of your phone system maybe at serious risk.

Another critical element of Hosted VoIP is bandwidth. When you use Hosted VoIP you will need

more bandwidth due to the internal bandwidth (extension to extension) requirements – this may

potentially be another contender for extra spending.

Some VoIP experts calculate that high-quality Hosted VoIP demands G.711 with 90 to 100K in

bandwidth per conversation. However, some service providers may be able to reduce this down to

40k and under.

On-site VoIP PBX requires a business to invest in all set-up costs, including IP phones, a server to

host the system, and bridging cards to connect any existing phones to the PBX environment. This

investment can often be significant and exceed hundreds of thousands of Thai Baht. You will also

need on-premise and trained IT staff to install and administer the system.

The advantage of an On-site PBX system is its high flexibility and potential for customization. The

addition and changing of extensions and system users can be carried out quickly and easily. Adding

IT Peace of Mind

users and changing numbers is done quickly and efficiently, and there’s no need to

involve an external service provider at extra expense.

One drawback to consider: if you company moves location, all hardware must obviously be moved

as well. With Hosted VoIP, you would simply unplug your phones and plug them into the LAN again

at the new premises.

One also needs to take system life expectancy into account; this can be done by the time it takes

your business to depreciate the initial investment and comparing the years of the Hosted VoIP with

the On-site VoIP PBX solution. Hosted VoIP usually looks favorable for some time, but after a few

years VoIP PBX will be the less costly solution.

A table comparison of both types of VoIP

Pros Cons

Hosted

VoIP

Phones are managed externally

= reduced need for internal

resources

Set-up costs low

Low ongoing support fees

Moving premises is simple,

inexpensive and with little

disruption

Extra features and additional users

maybe incur additional costs

Not easy to customize

Continuity risk if provider goes out

of business

On-site

VoIP

PBX

High flexibility and

customization potential

Management and use of system

can be closely controlled

internally

Additional features can be

developed in-house

Significant capital investment

required, for both hardware and

installation

In-house specialist IT staff for system

management required

Moving the system including the

hardware and server can be a

complicated and expensive task

Choosing which solution is best for you

Solutions managed by outside providers are usually the preferred choice for small and medium size

enterprises without the cash for purchasing and setting up the required hard and software but who

still need want to take advantage of the features, cost-effectiveness and other benefits of VoIP. The

also appreciate the value of enjoying a state-of-the-art phone system without having to look after its

maintenance and upgrades themselves.

It is the large enterprises who have the investments funds, the longer planning horizons and an

already existing infrastructure and support system, who decide for an On-site VoIP PBX system.

These organizations usually already have skilled IT staff or won’t find it difficult to hire additional

IT Peace of Mind

people. The exception to this rule is large enterprises that are spread over many

locations and offices. In such a case a hosted solution can become much more feasible and cost-

effective.

There are always trade-offs

All technology decisions involve tradeoffs. Softcontrol advises that businesses in need of a VoIP

system look at all the pros and cons and apply them to their own unique situation. To help make the

right decision, you can also request a Hosted VoIP demonstration by a knowledgeable provider such

as Softcontrol.

About SoftControl

Founded in Bangkok in 1993 by a team of German and Thai entrepreneurs, SoftControl has helped

global companies in Thailand and worldwide focus on growing their business for more than two

decades.

Over this period, we have delivered ITC services and solutions, including VoIP, to more than 200+

local and international customers including small and medium size companies as well as enterprise

level businesses across different industries. For many of our long list of satisfied customers we

continue to be a preferred IT consultant and provide ongoing IT support and strategic advice.

SoftControl’s success and continuity as an IT partner of choice arises from always placing your

business interests firmly at the centre of the innovative solutions and services we offer. Our know-

how and expertise as an IT partner is aimed single-mindedly at giving customers the freedom to get

on with business – a vision which we call IT Peace of Mind.

Read more about SoftControl VoIP solutions here: http://www.softcontrol.net/ip-phone-and-mail-

hosting/voip

For hosted or on-site VoIP business solution in Thailand: call us +66 2 105-4068 or send email to

info@softcontrol.net.