Every business buying a new phone system faces the same question: put the PBX in our own office or data centre, or rent a cloud phone system? Both work. The right answer depends on your data, your network, your team and how you prefer to pay. This guide compares them honestly.
The two options
On-premise PBX: the IP PBX runs on an appliance or server you own, in your office or data centre. Phone lines connect to it directly. You pay mainly upfront, with an annual support contract.
Cloud PBX: the phone system runs in a provider’s data centre. Your phones and apps connect to it over the internet. You pay a monthly fee per user.
Side-by-side comparison
| On-premise PBX | Cloud PBX | |
|---|---|---|
| Where calls and recordings live | Your own servers | Provider’s servers |
| Cost model | Mostly upfront, low running cost | Monthly per user, no upfront |
| Cost over 5 years | Usually lower for 30+ users | Grows with every user, every month |
| Internal calls if internet fails | Keep working | Stop |
| PRI and analog lines | Supported directly | Usually SIP only |
| Customisation and integration | Full control | Limited to provider’s options |
| Setup | Needs a server and installation | Quick to start |
| Remote staff | Supported with softphones | Supported natively |
When on-premise is the better choice
- You handle sensitive data: hospitals, banks, government, legal and finance.
- You must keep call recordings on your own servers for policy or audit reasons.
- You have 30 or more users and plan to use the system for several years.
- You have PRI lines or analog lines you want to keep.
- You need internal calls and paging to work even when the internet is down.
- You want deep integration with your CRM, HIS or ERP.
When cloud makes sense
- You are a small team that needs a phone system this week.
- Most staff work remotely with no central office.
- You do not want to manage any hardware.
Hybrid: the best of both
Many businesses choose a hybrid: an on-premise PBX at head office for control, recordings and existing lines, with softphones for remote staff and branches connected over the network. You keep your data while your team works from anywhere.
Questions to ask any vendor
- Where exactly will our call recordings and data be stored?
- What happens to calls if the internet link fails?
- What is the total cost over five years, including licences and support?
- Is the system TEC certified for use in India?
- Can we move from one model to the other later?
Voxdial: control on your premises, reach everywhere
Voxdial IP PBX runs in your office or data centre, so calls, recordings and reports stay on your own servers, with scheduled backups wherever you choose. Remote staff use browser and mobile softphones, branches connect over your network, and it works with SIP, PRI and analog lines. It is TEC certified and supported 24X7 by BitVoice in India. Talk to us about the right setup for your business.
FAQs
Is cloud PBX cheaper than on-premise?
Cloud costs less upfront, but its monthly per-user fees add up. For 30 or more users over several years, an on-premise IP PBX is usually cheaper in total.
Does an on-premise PBX work if the internet goes down?
Yes. Internal calls, paging and calls on PRI or analog lines keep working. Only SIP trunks and remote users depend on the internet link.
Which is more secure, cloud or on-premise PBX?
Both can be secure. On-premise keeps calls and recordings on your own servers under your own policies, which many hospitals, banks and government offices require.
Can remote employees use an on-premise PBX?
Yes. Staff use browser or mobile softphones to make and receive calls on their office extension from anywhere.
