On-Premise vs. Hosted VoIP: Which Communication Solution Suits Your Business?

Shawn Boehme
Post by Shawn Boehme
October 25, 2023
On-Premise vs. Hosted VoIP: Which Communication Solution Suits Your Business?

Voice over Internet Protocol (VoIP) allows businesses to make voice calls using the Internet instead of a more traditional phone line. There are two main types of VoIP systems: on-premise and hosted. While both options offer various benefits, they come with distinct advantages and disadvantages. 

In this blog, we'll delve into the key differences and considerations when choosing between on-premise and hosted VoIP to help you make an informed decision for your business.

Keeping Your System On-Site: What to Consider With an On-Premise VoIP

On-premise VoIP, as the name suggests, involves setting up and maintaining your VoIP infrastructure within your organization. In this approach, you purchase the necessary hardware and software, and your IT team is responsible for installation, configuration, and ongoing management.

Control and Customization

One of the primary attractions of an on-premise VoIP system is the level of control it offers. Your IT team has complete control over the hardware, software, and configurations, allowing you to internally tailor the system to your specific needs. This level of customization can be especially valuable if your business requires unique features or compliance with industry-specific regulations.

Data Security

With an on-premise VoIP system, your company retains full control over your data and can implement security measures according to your preferences. This can be vital for businesses operating in highly regulated industries, such as healthcare or finance, where data security and compliance are paramount.

Initial Investment

One of the key considerations with on-premise VoIP is the upfront capital investment. You'll need to purchase and set up the necessary infrastructure, including servers, routers, switches, and other hardware components. This initial cost can be substantial and may require budget planning.

Maintenance and Support

Maintaining an on-premise VoIP system involves ongoing expenses for hardware updates, security patches, and IT staff to manage the infrastructure. Your in-house IT team or external support will be responsible for troubleshooting and ensuring system reliability. This can be a benefit if you have a strong IT department but could be a drawback if your team lacks expertise in VoIP technology.


Scaling an on-premise VoIP system can be more complex than a hosted solution. Adding new users or features often requires additional hardware and configuration, which may lead to an extended period of downtime. This limitation can be a challenge for businesses that expect significant growth or frequent changes in their communication needs.

Moving to the Cloud: What to Consider When Opting for a Hosted VoIP

Hosted VoIP, also known as cloud-based VoIP, shifts the responsibility of infrastructure management and maintenance to a third-party provider. With Hosted VoIP, voice data is converted into digital packets that are transmitted over the Internet and reassembled at the receiving end.

Cost Efficiency

One of the most significant benefits of hosted VoIP is cost efficiency. You can avoid the high initial investment associated with on-premise solutions as you don't need to purchase hardware or software. Instead, you pay a subscription fee, often on a per-user basis, which provides predictable monthly costs.

Maintenance and Updates

Hosted VoIP providers handle maintenance and updates, ensuring your system is always up-to-date and secure. This offloads the burden of managing hardware and software from your IT team, allowing them to focus on other critical tasks. It also eliminates the need for costly hardware upgrades and replacements.


Hosted VoIP systems are highly scalable and flexible. Adding or removing users, features, or phone lines is usually a simple process that can be accomplished without significant periods of downtime. This adaptability is ideal for businesses with fluctuating (or seasonal) communication needs or those planning for growth.

Reliability and Redundancy

Hosted VoIP providers typically have data centers with redundant systems to ensure high availability and minimal downtime. This reliability can be a significant advantage for businesses that rely on consistent communication with customers, partners, and remote workers. It ensures that your communication system is less vulnerable to network outages or hardware failures.


Hosted VoIP offers greater geographical flexibility, allowing employees to access the system from anywhere with an Internet connection. This is especially valuable for businesses with remote and distributed teams, enabling a cohesive, integrated communication system regardless of geographical location.

Making the Right Choice for Your Business

Choosing between on-premise and hosted VoIP depends on your organization's unique needs, budget, and IT resources. Here are some key considerations to guide your decision:

  • Control vs. Convenience: If you prioritize control and customization, on-premise VoIP might be the better choice. However, if you value convenience and cost efficiency, hosted VoIP could be more suitable.
  • Budget: Assess your budget and cash flow. If you have the capital for an upfront investment, on-premise may be an option. For businesses seeking predictable monthly expenses, hosted VoIP is often the better choice.
  • Scalability: Consider your business's growth prospects. If you anticipate changes in communication needs, hosted VoIP provides the flexibility to scale up or down as required.
  • Data Security: Evaluate your industry's regulatory requirements and data security needs. On-premise VoIP offers more control over data security, which might be essential for compliance in highly regulated industries.
  • IT Expertise: Assess your IT department's expertise and capacity. Hosted VoIP is a more straightforward choice for businesses with limited in-house IT resources.

PanTerra Streams: The Best of Both Worlds

The choice between on-premise and hosted VoIP is not one-size-fits-all. Careful assessment of your organization's needs, resources, and long-term goals will guide you toward the most suitable solution for your business. However, the solutions offered by PanTerra Streams can help make the decision simple. 

  • Control and Convenience: Our customizable pricing plans come with a variety of features that you control so you only pay for what you need.
  • Budget: Because our pricing is customizable, you can plan for consistent payments without unnecessary expenses. 
  • Scalability: Our software is flexible and scalable for any business’s needs.
  • Data Security: We’ve done extensive work to ensure our data and security procedures are tailored to a variety of industries: even those with strict compliance and regulations, like the healthcare industry.
  • IT Expertise: Our award-winning support team is ready and available to help your team with any questions or issues.

Whatever your needs, PanTerra Streams is here to help you move toward more efficient and cost-effective business communication. Check out our video library for more information about why making the switch to PanTerra is the best move for your business: https://www.panterranetworks.com/video-library 

Shawn Boehme
Post by Shawn Boehme
October 25, 2023
Shawn Boehme is a seasoned professional with a wealth of experience in the Unified Communications space. As the Director of Sales for PanTerra Networks since March 2015, Shawn has played a pivotal role in empowering businesses across the U.S. and Canada to maximize their productivity and streamline costs through advanced cloud communication solutions. His unwavering commitment to delivering top-notch service and driving business growth through effective communication strategies has earned him the reputation of an expert in the field.

With a deep understanding of the challenges enterprises face in harnessing the full potential of their phone systems, Shawn is dedicated to uncovering each client's unique needs, pain points, and successful aspects of their existing communication infrastructure. This extensive industry experience, coupled with his specializations in phone and messaging platforms, PBX and call centers, contact centers, and unified communication, allows him to design tailor-made solutions that address specific challenges and expedite businesses towards success.

Shawn's unwavering dedication to providing unmatched value and a superior customer experience demonstrates his commitment to surpassing client expectations. He leverages his extensive knowledge and technical expertise to not only meet but exceed the unique demands of each client. When seeking advice or solutions in the Unified Communications space, businesses can trust Shawn's judgment and rely on his proven track record of driving growth and delivering exceptional outcomes.