Cloud-Hosted vs On-Premise PBX Solutions: What’s the Difference?

Hosted vs On premise

When selecting a new business telephone system, it can be challenging to wrap your head around the overwhelming range of options and system setups available on the market.  As a starting point, we have created the following guide to highlight the benefits between the two different options for business telephone solutions, namely on-premise and hosted PBX systems.

On-Premise PBX Business Phone Systems Explained

on premise diagram

With on-premise PABX or PBX systems, all the physical hardware is installed on, and run from, the company’s premises. Both PABX and PBX refer to an office switchboard system. PABX stands for Private Analogue Branch Exchange and would be a reference for legacy installations. The “Analogue” portion was phased out around 10 years ago, leading to the current acronym of PBX (Private Branch Exchange).

The traditional on-premise phone systems can either router through traditional copper lines or they can be VoIP enabled. VoIP (Voice over Internet Protocol) makes use of SIP Trunking. With on-premise telephone systems, the company could choose to manage the system themselves or opt to engage with a service provider to handle the support, maintenance and upgrades on their behalf.

Benefits of On-Premise PBX Systems

  1. Flexibility – choice of different network carriers that make use of different telecommunication technologies such as analogue trunks, digital trunks and SIP trunks.
  2. Mobility –mobile applications are available for a small number of PBX systems, but offer limited functionality.
  3. Scalability – office phone systems can expand to accommodate more extensions and incoming lines, however, each system has limitations
  4. Cost Savings – cost-effective for large companies with a centralized workforce. The addition of VoIP trunks can save on call costs.
  5. Setup – no need to change network carriers when purchasing or upgrading to a new on-site PBX system.
  6. Customer Service – if well designed, an on-premise PBX allows for a strong customer-facing service experience. However, adjustments to call routing are slower to implement than with a hosted PBX solution.
  7. Business Continuity – the use of an on-premise PBX system is not reliant on an internet connection therefore you are not restricted on what form of connectivity is available in your location.
  8. Control – keeping your PBX on-site gives you more control which in turn provides more security.
NEC SL2100

Cloud PBX Business Phone Systems Explained

hosted diagram

Hosted VoIP PBX systems are fast gaining popularity as the preferred modern telephone solution for many businesses throughout the United Kingdom. The main switchboard hardware and associated equipment of the cloud system is housed in the network providers’ data center and is owned and managed by the service provider. The service provider will engage in a service agreement plan with your business so that you simply pay a fixed monthly fee for your hosted office phone system. This means that the only equipment your business requires on-site are the handsets and network equipment, with users accessing the cloud-based phone system via an internet connection.

Benefits of Hosted PBX Phone Systems

  1. Flexibility – ability to customize features, quickly adapt functions, and integrate with other cloud applications.
  2. Mobility – users can work remotely from any location, making this an ideal solution for employees who travel frequently or work from home.
  3. Scalability – add and remove users and telephone numbers quickly and easily, and only pay for what you use quickly and easily.
  4. Features – unrestricted options for selecting, arranging, and customizing features.
  5. Updates – all feature upgrades are automatically completed by the service provider and are included in the maintenance costs.
  6. Cost Savings – minimal setup and installation costs, which is particularly advantageous for small businesses. The ongoing maintenance costs are also low, as minimal to no support is required in-house.
  7. Space Savings – all hardware is housed off-site in a data center, freeing up usable business space in your office.
  8. Simple Setup – simplicity in setting up and moving the system, remotely and immediately, should your business relocate.
  9. Customer Service – professional, efficient and consistent routing of all incoming calls through a virtual attendant.
  10. Business Continuity – limited downtime and no unexpected maintenance; uninterrupted service through data center redundancies
  11. Control – control and monitor your communications with a customizable and user-friendly Telephone Management System (TMS).
hosted system

United Telecoms’ Hosted Phone System

Direct Comparison of Hosted vs On-Premise PBX Benefits


In Conclusion

Depending on your business’s requirements, both an on-site PBX system and a cloud-based PBX system may be suitable for your offices. Hosted phone systems are the next generation in PBX office phone systems, they are ideal for all business types and sizes. If your business needs to make, receive and transfer calls and has access to a high-speed internet connection in your area, we would recommend a Hosted PBX solution.

For guidance on the most cost-effective, efficient and flexible solution for your business, contact the team at United Telecoms today on 020 3399 8011, or email us at Our telecoms specialists are standing by to answer any questions and assist with your PBX system quote.

Got questions? Contact our experts today.


We service the following locations across London and the United Kingdom

Greater London: City of London, Hounslow, Barking and Dagenham, Islington, Barnet, Kensington and Chelsea, Bexley, Kingston upon Thames, Brent, Lambeth, Bromley, Lewisham, Camden, Merton Croydon, Newham, Ealing, Redbridge, Enfield, Richmond upon Thames, Greenwich, Southwark, Hackney, Sutton, Hammersmith and Fulham, Tower Hamlets, Haringey, Waltham Forest, Harrow, Wandsworth, Havering, Westminster and Hillingdon.

What Our Customers Say

“Once we approved the installations we were kept up to date daily with the levels of progress on our various sites and were very impressed with the final installation”

Spear Properties


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London Office

2 Osborne Way
KT19 8GR
United Kingdom (UK)

Tel: 033 1630 0516
Tel: 020 3399 8011


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