Premise or Hosted IP-PBX

Premise or hosted Telecommunication System, evaluate your options

So what’s the difference between a Premise PBX and Hosted PBX? 

It’s been almost 20 years since we introduced our clients to Voice over Internet Protocol (VoIP).  VoIP technology has evolved over time and has become an integral part of the day-to-day operations for many organizations throughout the world. 

When it comes time to purchase, upgrade or even virtualize your phone system there will be challenges. Educating yourself on the differences, benefits and what challenges you could face, can help you make the right decision and guarantee your business needs are met and safeguard your investment.

VoIP regardless of where the hardware sits, can offer huge advantages to business of all sizes.


What's the difference?

Premise PBX

A Telephone system where the hardware resides at the client’s location (or data center) usually in a server or phone closet and the hardware & software is owned or leased by the client. These systems can be physical or virtualized and there are even hybrid solutions.  The client either manages the technology themselves or engages a third party company to do it for them, such as a company like TIG.  

Premise based systems are usually a capital expense but could also be leased and expensed. Usually you’re dealing with annual maintenance and annual manufacturer software licensing.  There would also be a monthly carrier bill for telephone trunks and usage. Final costs would always be determined by the configuration and features selected.


Hosted PBX

A telephone system that is delivered over the clients existing internet connections or a dedicated circuit. The phone sets plug into a router where the calls, signaling, and features are passed through the call control (PBX). The PBX is located in a provider’s data center. 

Hosted PBX systems are based on a monthly cost and is determined by the user license, desk sets, extended features and applications (Contact Center, etc.). The monthly charges are usually inclusive of usage and do not require trunks like the premise solutions.




Premise PBX
  • You can do what you want with your equipment—ultimate flexibility.
  • You may require internal resources to support the system or enter into a vendor maintenance agreement.


Hosted PBX
  • Service provider may have more resources to implement a solution you could not afford to do just for yourself.
  • Some Cloud options do not scale to large deployments in a cost-effective way.



Premise PBX
  • TIG’s project management team will lead the implementation process which includes site surveys, programming controllers, patching cables, placing & programming telephone’s, UC applications & Contact Center.
  • Prior to cut over, we will train your team on the functionality and best practices when using their new phones & software-based applications.
  • Once the new system is installed, your company would have access to TIG’s Technical Assistance team for any of your future needs.
  • You’re purchasing the equipment and are responsible for managing, and maintenance of the PBX system.
  • Deployment time may take longer.


Hosted PBX
  • You’re not purchasing any physical hardware other than the required POE switch for the telephone system so the implementation is a little different.
  • TIG’s provides coordination with the Hosted Provider and the end user. Generally providers will ask you to compile your database in their online tool. Once this is complete your new phones will arrive programmed and ready for your team to begin placement.
  • Training is provided via an on-line pre-recorded video and electronic reference guides.
  • Ongoing support is provided by the Hosted Provider.
  • TIG’s team is available to provide "White Glove" service to assist in the implementation process and continued support of your new system.
  • There is a lower requirement for in-house IT resources.



Premise PBX
  • You have control over every detail. An easy-to-use solution with careful management will give you a communication solution that matches your needs better than anything else can.
  • TIG’s Service Team in available for support or to complete software updates, patches, MAC’s, SCO’s, and maintenance.


Hosted PBX 
  • Your hosted service provider has the actual control over your system.
  • You will work directly with them on all changes and support requests. 
  • All the major software updates and maintenance processes are handled by the provider. 
  • Ability to spend IT resources on other revenue-generating tasks.



Premise PBX 
  • You have complete control and flexibility—you can even switch solutions or mix-and-match
  • Every expansion increases the complexity that requires management.


Hosted PBX
  • Your provider shoulders all the risk, work, and complexity.
  • Can quickly add and remove user licenses.
  • Provider automatically updates software.


Cost Overview

Premise PBX
  • You’re buying the hardware which could mean higher upfront costs. 
  • Most manufacturers require the client to purchase software assurance which would cover the software to upgrade the controller and applications, and we recommend entering into a maintenance agreement from the provider to assist in the support and maintenance of the system. 
  • Premise based unified communication system's require a connections to the public switched telephone network (PSTN) generally SIP or PRI.


Hosted PBX
  • As we mentioned earlier you're not purchasing the equipment which could mean a lower initial equipment and implementation costs. 
  • It's important to note that the client is responsible for their network and keeping it current.
  • The client will receive a monthly bill for the service costs which include upgrades and access to new features.

What’s right for your organization? Only you can make that decision.

TIG’s experienced and certified staff is here to provide any of the detailed information you require. Once you understand the differences, it will help simplify the decision-making process to choose which is best for your business.

Offices in Illinois, Arizona, Florida, Tennessee & Wisconsin

Contact Us

P: +1 630.350.0700
F: +1 630.350.0711

125 North Prospect Avenue
Itasca, IL 60143