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Hosted VoIP vs On-premise VoIP – 3 Things to Consider

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VOIP | VoIP Services

The decision to choose between hosted VoIP or on premise VoIP through SIP trunks is a big one for organizations. Choosing the wrong option could result in wasting a lot of time, effort and resources – twice. You have to rip up everything that you have worked hard to deploy and implement completely different infrastructure to support the other alternative.

For example, an organization chooses SIP trunking and within a few months realizes that it is actually overkill for their requirements. On-premise VoIP gives positive ROI but it is over the long-term and benefits companies with high call volume. The business will have to cancel services from the provider, search for a vendor that provides hosted VoIP services and then make the switch. The transition may be quick and easy or long and complex. It can disrupt workflows and employee productivity.

In some ways, choosing hosted VoIP is the smarter choice. Since there are no contracts in the VoIP industry, you can always move over to SIP trunking if that suits your business better. However it still requires a lot of planning and by opting for hosted services first, you have delayed the implementation of the right alternative for the business. At the very least, users may get frustrated while you change the system over to another solution.

Considerations When Choosing between Hosted VoIP and on Premise VoIP


There is not much to choose between hosted VoIP and SIP trunks when it comes to voice and call quality. Both solutions offer performance and clarity that is equal to or better than the older PSTN, as long as you have configured it correctly. However the pricing can vary significantly depending on a number of factors such as total call volume, peak call volume, maximum number of concurrent calls, purchasing new equipment, upgrading supporting infrastructure and so on.

It is often quicker and cheaper to get started with hosted VoIP, so quite a few organizations feel that they have nothing to lose by trying it out first. But if you are sure that SIP trunking is the most suitable alternative for your business, the higher cost is easily justified. It doesn’t take long for the on premise VoIP phone system to generate positive ROI for the majority of enterprises.

In many cases, the decision really comes down to whether the organization has the ability to invest resources front in purchasing and configuring the SIP trunks. Small businesses, startups and contractors may find it difficult to raise significant capital which is why these types of organizations prefer hosted VoIP.


Even a few years ago, setting up on premise VoIP systems was a complex task. Now there are many vendors trying to eliminate that barrier by providing services that are remarkably similar to hosted VoIP. However even though you can depend on the provider for tech support, it is highly preferable for a business to have in-house capability or expertise. Even though implementing SIP trunks has become easier with time, it still requires proper planning and design.

With hosted VoIP services, an IT professional or manager is largely sufficient to handle ongoing support for the system internally. For the most part, the vendor is able to provide customer and technical support for troubleshooting and solving problems. Since the vendor delivers IP-PBX capabilities over the Internet and you can access them through an online dashboard, there is no on premise equipment for the business to bother with.


Just as on premise VoIP vendors are trying to make the solutions easier to implement, hosted VoIP providers are also trying to make their systems more robust. In the early days of hosted VoIP, it was not a good alternative for any business that had more than a few employees or one location. In today’s world however, there are excellent vendors that can provide hosted services for enterprises with multi-site requirements and more intricate call routing requirements.

Nevertheless, you can customize SIP trunks to a much higher degree than most hosted VoIP services. It means that a business can configure the system to suit their own internal processes, instead of trying to find a vendor that offers a premade solution for their industry. If your business is growing at a high rate, it is quite likely that you will outgrow the capabilities of your hosted system in a couple of years. In that case it makes sense to opt for SIP trunks.

However, if your business requirements for voice communication is not likely to change much over the next five years, selecting a hosted VoIP solution that fits your needs today is the best option. When your needs change after a few years, you can always reconsider SIP trunks at that point of time. As is the usual case with any new technology, a business has to try and balance their needs with what is available at a certain price.

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Thousands of businesses across the world trust VoIPstudio for all of their most vital business communications. Why not be the next?

Start a free 30 day trial now, no credit card details are needed!