The Cloud vs On-Premise VoIP – Who Wins?

Within technology-based industries, there is a tendency to pit two or more technologies against each other. It may be competing formats, platforms, applications or even operating systems. We see this playing out time and again across different sectors. In desktop computers, it was Mac versus Windows. More recently, it is iOS versus Android on mobile phones. Even video formats have not escaped the competitiveness, with Blu-ray being the most recent winner.

So it should come as no surprise that cloud VoIP and on premise deployments are also seen as competitors within the industry. Industry experts, social and broadcast media regularly publish opinion pieces on which alternative would emerge the ultimate winner. For the vast majority of businesses, the very first decision that they need to make is to go with the cloud or deploy their own system.

In some cases the rivalry is justified as the two opponents may compete directly on all fronts. But more often than not, there will be no clear winner as it comes down to subjective preferences and specific business requirements. Consider the case of iOS and Android mobile operating systems. Both platforms are flourishing at the moment and neither one can be crowned the absolute winner. Each OS shines in one or the other aspects and users make a choice based on their personal likes or dislikes.

The Problem with the Cloud Versus on Premise VoIP Question

It is a similar situation when it comes to VoIP alternatives. Cloud and on premise VoIP deployments appear to compete at first glance. A closer look will tell you otherwise. For one thing, different types of organizations have various requirements which won’t always be the same. You can group individuals into specific categories based on demographic variables such as age or income. You can do the same with organizations in a similar manner.

What is suitable for a company that employs 20,000 people across three continents may be completely wrong for a small boutique chain. On the other hand, some providers serve clients with varying business requirements by customizing the same back end solution.

Both types of VoIP deployments share many similarities. Regardless of the choice they make, organizations will witness significant cost savings. They can implement many more advanced features that were not possible with the PSTN. Both options provide the flexibility and reliability required for modern-day businesses.

There is another problem with declaring a winner in this so called ‘war.’ How do you determine who wins? By what criteria can you say that cloud VoIP has lost to on premise SIP or vice versa? Let us take a look at the classic example of Mac versus Windows. While the latter wins in terms of market share, it is well-known that Mac computers are more profitable for Apple. Fewer people purchase Apple computers but those that do won’t switch to Windows because many apps are not available on that platform. Both types of operating systems serve completely different clients. The office of a marketing company may be filled with Macs whereas it is difficult for a technology-based company to operate with the same hardware.

The Lines Are Blurring between Cloud and on Premise VoIP

When VoIP was still new, there was a clear demarcation between cloud and on premise deployments. It was generally understood that small or medium-sized businesses should select hosted VoIP services. While larger organizations go for on premise SIP trunking. But the lines between the two alternatives are not as clear as they used to be.

In fact quite a few traditional IP PBX vendors have embraced cloud VoIP. There have been multiple acquisitions within the industry between hosted service providers and traditional PBX vendors. Over the long-term, on premise VoIP deployments are even more cost-effective than hosted services. Prompted by this, even small businesses are looking to invest in their own equipment for phone services.

The opposite is also true. As hosted service providers expand their portfolio and improve the reliability of their infrastructure, larger companies are taking notice. Rather than trying to maintain separate installations for various regional offices, these corporations opt for hosted services from a single provider.

There are also organizations that have switched from cloud services to on premise deployments and vice versa. Such a change may be the result of one or several factors together. Sometimes organizations change solutions because of a merger, acquisition or other business transaction. In some circumstances, price can be the deciding factor. Quite often, the change happens because the requirements of the business have changed over time.

If your company is looking to upgrade to VoIP, don’t bother trying to pick the ‘winner.’ What is more important is to select a solution that is appropriate for your budget and business requirements. Keep in mind that these factors can change as well. What works for you today may no longer be perfect tomorrow.