On Premise Systems
Pros:- Long term costs are lower
- Voice quality is highest
Cons:
- Initial investment can be relatively high (prices would start at $7k for a small system for eight employees, add another $2k or so for each eight employees so 32 employees would be ~ $13k)
- Equipment may need maintenance (perhaps done by your IT guy, perhaps phone vendor)
- Hardware can fail or become obsolete and need to be replaced (typical life - 5 to 8 years)
Cloud Based Systems
Pros:- Larger featureset than on-premise systems in most cases
- Allows for users outside of the office to have an office phone and participate fully as if they are in the office
- Upgrades of backend software are automatic - no hardware that becomes obsolete
Cons:
- Even in best case possible setups, can have some voice quality issues (not often but frequency can vary)
Let's use some numbers from recent systems I have put in place and use them as examples. In this case, I'm assuming a small business with approximately 15 employees.
Client 1: NEC SV8100 with fifteen 24 button phones, PRI module, voicemail to email licenses - $9k, PRI at $400 per month from Windstream
Client 2: Telesphere (now Vonage Business) at $518 per month for 15 phones/licenses, $350 for dedicated ethernet over copper voice circuit at 5x5, add $500 for POE switch on day of implementation
Based on the numbers above, total cost of ownership for six years as follows (graph based on these numbers further below):
| Start | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| On Premise | $9,000 | $13,800 | $18,600 | $23,400 | $28,200 | $33,000 | $37,800 |
| Cloud | $500 | $10,916 | $21,332 | $31,748 | $42,164 | $52,580 | $62,996 |
