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As small-to-midsize businesses evaluate their IT needs for the year, questions surrounding an IP-PBX upgrade often boomerang, as leaders try to decide how to proceed.

However, even in rationally-managed operations, the recognition that your PBX is not meeting the needs of your business is only half the battle. The next choice, regarding whether to augment your setup, choose a new on-premise solution, or take your PBX to the cloud, is often the most paralyzing one. And this paralysis can cause a systemic stalemate, leaving your organization vulnerable to a communication collapse if you keep kicking the can down the road.

But it doesn’t have to be this way. An IP-PBX[1] upgrade for your business (paired with the right SIP provider) shouldn’t be a high-stakes drama, once you realize that the core benefits of these offerings are not either/or propositions.

Old School vs. New School: On-Premise vs. Cloud-Hosted IP-PBX Upgrade

We all have people in our lives who maintain a retro tech infrastructure. You may have grandparents who still rely on their VCR, or an uncle who has never graduated beyond the flip phone, or a buddy from high school who steadfastly rejects all invitations to join the world of social media. We may consider these outliers to be outdated or out-of-step, without acknowledging that our perception of their choices does not affect the problems we believe they could solve.

A person who has been enjoying their library of VHS tapes for 30 years doesn’t appreciate them any less just because there are 4K televisions out there beaming Blu-Rays in HD. If a person has a cell phone solely to make calls, a smartphone doesn’t necessarily make sense, especially when you realize you’re paying hundreds of dollars for features you may never use. Meanwhile, social media is slowly destroying civilization, so…well, the point is that there are solid justifications for not always moving with the majority.

In the IP-PBX space, the majority are moving—or claim to be considering a move—to cloud-hosted IP-PBX, leaving those who prefer premise-based solutions feeling as if they’re clinging to an antiquated approach to telecom. IT folks get defensive about topics like this, because they pride themselves on being early adopters of anything on the bleeding edge, and have closets and basements filled with enough inoperative electronics and tangled wires to stock a small museum.  However, we’re here to say there is more than enough justification for those who prefer to keep the hardware in-house, especially since open standard systems like 3CX offer software that allows you to install, manage, and maintain any IP-PBX upgrade, regardless of your flavor.

Staying on Point with On-Premise IP-PBX

IT professionals are risk-averse and tend to dislike surprises. Whether it’s an outage from a third-party service provider or a hack the size of Equifax, there is an underlying notion that we can protect ourselves from some of these calamities if we keep essential infrastructure in-house. The on-premise IP-PBX upgrade is one way to assert a finer sense of control over telecom operations and mitigate the hum of anxiety.

If you are supporting parts of your internal ecosystem which aren’t cloud-optimized—from messy SQL databases to legacy CRMs, or older enterprise resource planning applications—directly connecting to them through your local network may be a necessity. Or, if your business relies heavily on call recording, having that unimpeded link to the PBX hard drive could be a desirable requirement.

Your operational capabilities drive these decisions. The reason hosted IP-PBX solutions have such strong appeal for SMBs is that they reduce the need to hire IT experts or buy and maintain expensive equipment, without sacrificing service or call quality. For very small businesses (fewer than 20 employees), the hosted IP-PBX upgrade option is almost always the right call, due to cost and maintenance concerns. But for businesses with experience and competence in this space, they may be comfortable selecting an on-premise IP-PBX upgrade and matching it with the server, routers, switches, session border controller, and battery backup they need.

The costs for each component can vary widely, but we’ve found that the average cost of an on-premise IP-PBX upgrade is around $700 per phone station. This means that, if you have 40 employees in your company, you will need about $30,000 in your budget. Naturally, this number can be reduced if you’re installing the system on your own, or if you’re planning to use softphones rather than standard desk phones. But if you can’t absorb this budget hit, you would be wise not to spend days and weeks trying to whittle away at that number if that means foregoing a service and support plan. Or if it means negotiating a purchase agreement that has you paying it off over the course of 10 years, long past the point of obsolescence.

Does On-Premise IP-PBX Spell C-o-m-p-r-o-m-i-s-e?

If you are looking at replacing your PBX with an on-premise option, there are two areas you should investigate (aside from cost): scalability and open standards.

• Scalability: On-premise IP-PBX is significant. Some companies will continue using outmoded systems until the expenditure has fully depreciated, or purchase new ones without adequately casting an eye toward the future. If you’re in growth mode, make sure you have enough extensions for today and tomorrow, so you don’t find yourself needing to augment your IP-PBX, since augmenting an on-premise PBX can rival the cost of the initial purchase.
• Open Standards: While PBX software has gradually embraced the concept of open standards, there are still many systems that use proprietary (or closed-source) software. When you buy a closed source hardware solution, you're really buying somebody else's vision of what your phone system’s going to be. Some vendors claim that the closed-source approach provides higher levels of security, but there’s little or no evidence to support that claim. Even proprietary systems employ plenty of components built on open standards. If the on-premise PBX device only supports proprietary software, which can only be installed and serviced by specialists and can only connect certain phones…well, you see where this is going. This is vendor lock-in at its worst and runs counter to the reasons for keeping the PBX in-house (i.e., control).

It’s also worth pointing out that open standards might help you extend the life of your current PBX, which also qualifies as an IP-PBX upgrade. Open-source communication software like Asterisk can be an entryway and/or a peripheral application server, which opens up the world of VoIP and the countless problems it can solve for your business. Meanwhile, your legacy PBX can continue its service to the PTSN until you’re ready to cut that cord.

Cloud-hosted IP-PBX systems powered by open standards software and fed with SIP trunks have become a popular choice for SMBs looking to modernize their voice infrastructure. However, on-premise solutions aren’t going away anytime soon. If you have the budget, the know-how, and a decent crystal ball, an on-premise PBX can provide many of the advantages found in a cloud-hosted version, including the services integration on which your customers (both internal and external) rely. Just make sure you align your IP-PBX upgrade decision with the current and future communication needs of your operation. Learn how you can improve customer service and boost productivity and reduce costs with 3CX powered by Voxtelesys. To get your business started on making the switch contact us today!

[1] Since almost all new PBX (private branch exchange) systems support VoIP, we use IP-PBX when referring to current offerings.  If you are looking for a better understanding of the differences between traditional PBX systems and IP-PBX, please see this post.

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