Cloud phone system or on-premises
Choosing between a cloud telephony system or on-site systems depends on the number of branches and the cost-balance point. Here are the three questions that decide which is more profitable.
In both models, cloud or on-premiseRead more...How much does a telephone system costWhat makes the price go up, and what is missing from the quotes
Price settled after three questionsRead more...
From then on, the place usually works out better.
On-premise main system + remote extensions and cloud queues.
VoIP does not forgive a network without traffic prioritisation.
The right question is not which is better, but for how many years you will use this control unit. Under three years, or with distributed teams, the cloud wins almost every time. Above that, and with everyone in the same building, on-premises usually works out cheaper. This page compares the two models point by point.
Direct comparison
| Cloud hub | Switchboard on site | |
|---|---|---|
| Initial investment | Ground floor: telephones and installation | Top: equipment and licences |
| Monthly cost | Monthly fee per extension | Maintenance and traffic only |
| Break-even point | — | Typically between the 3rd and 4th year |
| Updates | Included, automatic | Planned, on your own account |
| Grow or shrink | Immediate, month-to-month | It depends on the licensing purchased |
| Multiple installations | It is the same call centre for all of them | Require site links |
| Remote working | Extension anywhere, no extra setup | Possible, but requires a VPN or secure publishing |
| Internet outage | Switchboard is still operating; diverting to mobile phones | Internal calls continue; external ones depend on the connection |
| Power cut in the building | It doesn't affect the central unit | Affected, save sized UPS |
| Data and recording control | With the supplier, under a processing agreement | On your premises |
| Local integrations | Possible, but it depends on the supplier | Totals, including legacy systems |
When we recommend cloud
- Companies with up to around 50 extensions and no special integration requirements.
- More than a facility, or a team working from home.
- Who wants predictable cost per seat and no equipment in the rack.
- Anyone moving premises in the short term — the switchboard keeps up with no building work required.
- Offices that open and close positions throughout the year.
When we recommend on-site
- Many branches and a long horizon: at five years old the difference is significant.
- Isolation or retention requirements for recordings indoors.
- Integration with local systems — production, gatehouse, intercoms, legacy systems.
- Hotels and healthcare facilities with integration into the management software installed on-site.
- Unreliable internet connection with no reasonable alternative.
The hypothesis that rarely appears in proposals: hybrid
Keeping the PBX on-premises and moving only the remote extensions and call queues to the cloud is possible and, for companies that have already invested in a recent PBX, is usually the most economically sensible decision. It doesn't appear in proposals because it's not what either side prefers to sell.
The mistake that costs the most money
Decide on the model before looking at the network. Voice over IP does not forgive a network without traffic prioritisation, with unmanaged switches or with an uncontrolled shared internet connection. In the cloud, that sounds like dropouts and silences; on-premises, it sounds the same. Before choosing the model, check if the network is ready — it is the same check we do in any network design.
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Frequently Asked Questions
Is the cloud data centre less secure?
Not intrinsically. The conversation is encrypted in both models when properly configured, and the real difference lies in who is responsible for the infrastructure and the data processing agreement. A poorly maintained local exchange exposed to the internet is much riskier than a managed cloud service.
Can I change model later?
You can, and that is one of the reasons not to over-invest in the first decision. IP phones are usually reusable, and numbers are portable. What is not reusable are local PBX licences bought for ten years.
What if I already have an old analogue or digital switchboard?
Coexistence is possible during the transition. It is common to connect the old PBX to a gateway and migrate the extensions in phases, rather than changing everything over a single weekend.
How many simultaneous calls do I need?
The rule of thumb is between a quarter and a third of the number of extensions, adjusted to the type of activity. A sales team or customer service department needs more; a back-office, fewer.
Contact us
We'll make the comparison with your numbers, across both models, over five years. Call me +351 211 459 950 or write to sales@dataroad.pt. See also How much does a telephone system cost.
This service is provided exclusively under an IT Unlimited contract.
DataRoad does not provide one-shot support or sell equipment on a standalone basis. We work on a monthly contract basis, with full responsibility for the client's environment.
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