So, It’s Time for a New Phone System… Now What?

If you own a business, big or small, you understand how important it is to have a professional phone system. This is imperative not only for your business to function both internally and externally, but also because having a professional phone system with up-to-date features can have a profound impact on your customers, for better or for worse.

So, we’ve established that all businesses need a professional phone system… but what happens when your old phones die and it’s time for an upgrade? Well, you have two options: Legacy PBX or Hosted Phone Service. But what’s the exact cost of an on-site PBX system (aka Legacy PBX) and how does it compare with the hosted cloud-based (aka Hosted Phone Service) alternative?

Hosted Phone Service

“Hosted” or “Cloud-Based” phone service is simply a phone system completely hosted and maintained by your service provider over a digital connection (such as Fiber or Cable). Hosted Phone Service has grown and developed over the last several years as a practical alternative to a bulky, on-premise Legacy PBX system for many companies… and quite frankly, it has many advantages:

  • No Heavy Upfront Costs or Installation Fees. Zero need to pay for someone to come out and install a box, as well as a need to pay to continually keep your system maintained. With a hosted system, it’s all part of the service!
  • Predictable Billing. No maintenance fees and service often includes flat rate calling!
  • Extremely Customizable. You can add new phones to your network whenever you want. Simply plug the phone into your network, program the new number(s) and you’re done!
  • No Additional Staff or Recurring Training. Because the system is hosted and maintained by your provider, there is no need for any of your staff to manage it full-time.


Can an On-Site Legacy PBX System Save You Money?

With all the advantages of Hosted Phone Service, the only reason most businesses even consider installing their own system is if it could potentially save them money. So, the big question is… does it?

The global telecom analyst and consultancy firm, Ovum, did a study on this exact question and reached a conclusion that can put it to rest. Through their research, they studied both small and large companies alike, and crunched the numbers of how much it would cost both ends of the spectrum.

For a low-technology footprint company with 50 employees and one location, they found that Hosted Phone Service, as opposed to an on-premise Legacy PBX system, was significantly less expensive:

low tech footprint ovum

Similarly, they looked at a high-technology footprint company with 750 employees and 3 different locations, and they found similar results. Again, the Hosted Phone Service was the less expensive option:

high tech footprint ovum



Hosted Phone Service is, objectively, the better option for companies all around. When looking at it from all angles, the decision should be clear for any business to make. With a Hosted Phone Service, you get the most features, for the least amount of work and money. Even with a new on-site Legacy PBX system, in the next 10 years, experts predict that those systems will be a thing of the past. Hosted Phone Service is the future, so the question is not if your business should make the switch… but, more than likely, when?


Dawson, Keith. “The Total Cost of Ownership of Cloud and Premise Based Contact Center Platforms.” Ovum TMT Intelligence, 7 Mar. 2016,

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