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Traditional and hosted phone system comparison


Traditional or hosted?

Your phone system is an integral part of your business. So maximising it’s reliability and efficiency is a key consideration when updating, replacing or buying a phone system for your office, branch or even when starting a new business.

We are saving businesses on average 27% on their new telephone system over a 3 year period when converting from a traditional to a hosted telephone system.

With this in mind we have compiled a list of common questions we get asked when offering independent advice to businesses on which phone system is best for their requirements.

Traditional Hosted
How does it work? Each office or branch has a physical PBX (phone system) that plugs into your desk phones. This connects to the local BT exchange which connects to the public phone network. A hosted PBX phone system is located offsite in secure, purpose built data centres. This then pushes calls across a dedicated voice data circuit via the internet and into your office desk phones.
How long will it last? A physical solution will lose value as it is replaced by newer technology and as a business you may outgrow its operating capacity. Upgrades will need to be made over its lifespan which can result in additional costs. The hosted provider keeps the system up to date, and if your business grows simply order extra seats to cater for additional phones. This means a hosted phone solution can suit your business requirements substantially longer.
How reliable is it? You are responsible for your own onsite phone system meaning a monthly maintenance contract is necessary in case of equipment malfunction and for periodic upgrades. If your dedicated voice data circuit went down with your internet you may be temporarily left with no phone system. However disaster recovery solutions can be easily configured to divert calls to mobiles or other landlines should this happen.
How secure is it? Phone systems, whilst generally secure, are susceptible to hacking (though this is rare). Levels of security differ depending on the type of system being installed. Even though they are web-based, carriers have done a lot of work to ensure security for hosted systems. As call traffic is fed directly through the carrying network daily expense limits are easy to implement making fraud attacks useless.
What about in emergencies? Your phone numbers are related to specific geographical locations and can be easily tracked by the emergency services. Your numbers are virtual and do not exist in a geographical sense. It is therefore important (and your responsibility) to keep the locations of your numbers up to date.
How many numbers can I have? Unlimited, but additions could necessitate a redesign of your phone system infrastructure which in turn could lead to increased costs and possible downtime. Unlimited providing your business has enough bandwidth across its dedicated voice and data circuit. Additional numbers are easy to add and manage.
What if I want to relocate? You will either have to purchase a new phone system or physically relocate your old one. This may result in down time for your business and additional installation costs. If your new location uses a different local BT exchange it is highly unlikely you will be able to take the same numbers with you without investing in alternative forms of connectivity. As your numbers are virtual and not tied to a physical phone line you can take them wherever you relocate. All you do is take your handsets and gateway to your new location and plug into your dedicated voice and data circuit. All your personal settings are held in the hosted PBX location meaning you haven’t got to reconfigure.
What if I want to open a new branch? You would need to install a physical phone system for every location including necessary phone cabling and handsets – a specialist job that will incur installation costs. You simply order as many additional seats for a monthly rental from your hosted phone system provider along with the number of pre-configured handsets that are ready to join your network.
Will I need a maintenance Agreement? You will require a maintenance contract. These can vary depending on type and size of the system and range on average from £250-£1000+ per year. There is no maintenance contract as there is no physical hardware at your premises (with the exception of handsets, routers and switches). All system maintenance and software updates are performed centrally by your hosted provider.
Can it accommodate flexible working? It is possible to incorporate homeworkers, but this can be a tricky as the system needs to remain secure throughout the process and can require the configuration of VPNs. Working from home is no problem as employees can take their handset with them, plug in, and access exactly the same functionality as if they were in the office.
What is the call quality? There should be no issues in call quality. A dedicated voice and data circuit should give clear call quality providing you do not overload the bandwidth.
Cost* £6550 £4798 saving £1752 (27%)
*Example costs based on a 10 user system including all hardware, maintenance and line rental costs over a 3 year period. Does not include monthly call rates. Costs are at the time this article was released February 2015. Exact cost savings cannot be guaranteed until business site review and proposal is undertaken. 



Hosted Telephone solutions are significantly increasing in popularity within businesses mainly due to their flexibility, Low set up and running costs, simple portal management, the increase in reliable business broadband and the trust now perceived that a hosted environment is secure.

However in areas of low broadband speeds, or where a business have the knowledge base and resources to maintain their own system then a traditional phone system still has its advantages


Still not sure which system is for you?Call our friendly team to discuss your needs 01603 518518


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