Hosted VoIP Vs On-Premise: What's the Difference?

Posted on May 31, 2022

Topics: Office Technology

Hosted VoIP Vs On-Premise: What's the Difference?

Good communication is the foundation of your company, and an absolute must for any successful business. Whether it’s customers communicating with your customer service team or the internal communication channels your employees use to collaborate, the technology you use to communicate could make or break your organization.

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With traditional phone systems bringing a host of challenges, from being expensive, becoming outdated fast and lacking scalability, a large number of businesses are turning to cloud-based phone solutions such as hosted VoIP.

In fact, according to research from Future Market Insights (FMI), VoIP will have approximately 204.8 billion subscribers worldwide and the industry will enjoy a revenue of $86.20 billion by 2020.

Similarly, a study conducted by MegaPath shows that landline companies are losing 700,000 customers per month. That’s because small, medium and enterprise businesses are moving to VoIP solutions for benefits such as:

  • Empowering their workforce to be mobile and flexible Saving as much as 25 to 50 per cent on telecommunications costs.
  • Enhanced customer service.
  • Improved sales results.
  • Access to 99.9 per cent guaranteed uptime and improved operational efficiencies.

But, what actually is a VoIP solution, what is hosted VoIP and what benefits can it bring your business? The OT Group explores these questions in this blog.

What is a VoIP solution?

Voice over Internet Protocol (VoIP) allows you to make phone calls at any time, at any place, using three things - a computer with a headset, your mobile device with an app, a traditional desk phone and a voice over IP service.

By converting your voice into a digital signal, VoIP allows your company’s employees to make calls directly from a computer, VoIP phone or other data-driven devices. In essence, VoIP is a phone service that is delivered over the internet.

There are two choices of VoIP services:

  1. On-site installed VoIP.
  2. Hosted VoIP.


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What is hosted VoIP?

Hosted VoIP is managed by the VoIP provider - meaning you won’t have to maintain and manage any of the equipment, services and servers associated with the phone system.

Instead of phone calls being forwarded through a network that exists within your company’s infrastructure, a hosted or cloud-based VoIP system operates through the internet in which your office will be assigned a phone number - which can be accessed from anywhere in the world.

You will be able to direct phone calls from the same number anywhere you have an internet connection, meaning you’ll have a cost-effective way to make calls from across the world and branch out your business to different locations at no extra expense.

Hosted VoIP vs on-premise

The main difference between hosted VoIP and on-premise VoIP is how it is deployed. 

While hosted VoIP is managed by the VoIP provider and hosted in the cloud, on-premise VoIP software and server harder is purchased (or leased) and installed on your company's premises.  

Since on-premise VoIP systems run on your company’s infrastructure and connects to the public switched telephone network (PSTN), your IT staff or telecom provider are responsible for installing the VoIP solution, upgrading any routers that support the phone system, as well as managing and maintaining the system.

Your telecom provider or your IT team is responsible for arranging configuration, ongoing servicing, system upgrades, user support and maintenance.

What are the benefits of hosted VoIP?

It’s believed that the typical IT department now maintains less than half of its platforms (40 per cent) on-site, with the rest residing in the cloud. That’s because there is a wide range of benefits that come with cloud-based solutions.

A company’s communication platforms are no different. In fact, traditional communication platforms require heavy investment in hardware and take time to deploy and configure. Not only that but, once in place, it’s not long before they become obsolete and expensive upgrades are needed.

While on-site VoIP and hybrid cloud solutions offer similar risks, hosted VoIP avoids these investment risks and instead offers a wide range of benefits that your company can enjoy for years to come. These benefits include:

1 - Cost savings

VoIP involves some initial investments such as handsets, but phone lines and add-on services are charged at a flat-rate each month. This means cost savings with VoIP are significant when compared with traditional communication systems. According to, companies that switch to VoIP can save up to 40 per cent on their local phone costs, as well as up to 90 per cent on international calls. That’s not even mentioning the huge investment saved when it comes to not having to upgrade your infrastructure, or manage and maintain your phone systems.

2 - Scalability

With hosted VoIP you can add phone lines easily, in just minutes. By either contacting your provider or logging into your management portal, your company can easily add phone lines or take them away in just a few clicks. This is perfect for businesses experiencing fast growth or companies that experience seasonal staffing fluctuations.

3 - Improved customer experience

VoIP systems have advanced voice features that help deliver positive customer experiences over the phone. These features reduce hold times due to faster issue resolutions, help give customers higher call quality, allow customers to reach the right person immediately, and on-hold messages can answer frequently asked questions or promote special promotions.

4 - Mobile workforce

With a hosted VoIP solution your company, and it’s employees, can use your communications infrastructure anywhere you go. All you need to have is internet or IP connectivity. Working remotely is no problem - you will be empowered to run your business from anywhere and encourage your employees to be productive no matter where they are.

5 - Access to innovative features

Whether you are a small startup or a large enterprise, your company can access innovative communication features when you need them. This could include anything from ‘never miss a call’, virtual assistance, auto-attendant, and video chat - all of which will ensure better customer service for your clients and improved operational efficiency for your business.

How can OT Group help?

Here at OT Group, we have been providing companies across Canada with hosted VoIP systems to not only match their current business requirements but to ensure they have a solution that can grow alongside their ambitions.

Hosted VoIP will offer your business a wide range of benefits, such as not having to upgrade to another solution later, greater collaboration, improved productivity, more advanced features, greater agility, seamless scalability, resilience to power outages and access to advanced reporting and automation functions - and we are the perfect, experienced partner to implement this solution into your business.

Are you looking for a modern phone system that functions more as an asset than a utility? Contact OT Group today. Our team of experts would be more than happy to explain how your business can realize significant benefits and cost savings with a hosted VoIP system.

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