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cost and benefits of choosing cloud or on-premises communications system

I consider myself a communicator. I work in communications technology and I use that technology, and others, to communicate ideas of importance and value to business decision makers and colleagues every day. So whenever I get asked about the value of moving communications to the cloud, I know the answer. What puzzles me is the belief that somehow moving to the cloud is more expensive than running your own communications systems.

I spent many years working for a company that sold on-premises PBX and contact center systems to enterprise customers. I am fully versed in what they are, their value, and everything that goes into the TCO of these systems. While on the surface the economics are fairly close, there is no ambiguity in my mind as to which model offers the greatest experience for an end user and the greatest value to a business. For most businesses, the cloud wins. Large enterprises that are heavily invested in current PBX networks may be an exception to this rule.

The nature of hardware-based solutions is they require frequent upgrades and periodic replacement, as well as daily upkeep by a dedicated technical staff. Your vendor keeps churning out new versions, with new features, to keep up with demand. If you don’t stay current, you end up compromising your business communications performance.

Alternatively, when you subscribe for cloud communications, your cloud vendor, like your PBX vendor, is already working on new features. The big difference is you will automatically get those new capabilities when they’re available, at no extra cost and with no extra effort required on your part. It’s simple, no hassles, and it’s free.

People often get hung up on the monthly cost of the cloud service they’re subscribing to. They add up the cost of the PBX/UC license and the cost of all the equipment they stack into their telco closet or data center and compare that to the cloud monthly subscription fee, and count the number of months before they’re in the red on the cloud.

The problem is, there are so many more elements that go into the cost of the PBX they forget to count. These details get left out, not out of laziness, but because they’re a lot harder to account for, since they get added up on multiple different bills, paid out of many separate budgets. This includes long distance and other monthly telco fees, maintenance and service contracts, along with the administrative costs of managing these systems. Then you have the upgrade and eventual replacement costs.

The cloud, on the other hand, is easy to account for, because it’s usually all itemized in one bill. Cloud services are also much easier to integrate into your other business cloud applications, as the cloud vendor has pre-built many of these integrations for you. The cloud also offers the advantage of undergoing regular security audits and monitoring, by a team of certified IT security professionals. And then we have the cloud uptime advantage, gained through service delivery from geographically distributed, Tier 3+ redundant data centers.

I recently had the chance to discuss the topic of cloud versus on-premises systems at length with the well respected analyst/consultant team at UCStrategies - Phil Edholm, Blair Pleasant, and David Stein. They brought their collective 80+ years of experience in the industry together to write a white paper for BroadSoft that explains the details behind the cost and benefits of choosing the cloud or an on-premises communications system stack for your business. You can find the UCStrategies white paper here.

And if you want to run the numbers yourself, you can use our cloud TCO calculator.

If you want to learn more, we would be happy to discuss your business needs.

Examine cloud financial  benefits with our TCO Calculator

About the Author

David brings over 20 years of technical, sales and marketing experience into his role in Product Marketing. David keeps his focus on illuminating the best ways of utilizing technology to improve our daily lives.