Cloud or On-Premise -What Is The Best VoIP Deployment Method?

By Cathrine Hosking 2 years ago
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Should I host my VoIP system in the cloud or on-premise? Cant I just upgrade my existing phone system? What is the best method to deploy a VoIP system?

These are all common questions we get asked at Real IT. The thing is, there is no straight forward answer because it really depends on what you are looking to achieve by moving to VoIP. This post dives deep into the advantages and disadvantages of each option so that you can choose the deployment method that best suits your business.

Not sure whether you should move to VoIP yet? Read this post first.

Generally, there are four main methods used to deploy a VoIP system, when advising our clients, we tend to recommend either option 3 or 4, depending on their use case and you will see why.


  1. Converting Your Traditional Phone System to Work With VoIP
  2. Upgrading Your Compatible Phone System to Work With VoIP
  3. On-Premises Modern VoIP Phone System
  4. Cloud-Based /Cloud Hosted Modern VoIP Phone System.

Method 1: Converting a Traditional Phone System to Work With VoIP.

When we refer to a converted VoIP phone system, we are referring to the process of taking ‘older/traditional’ style business phone systems and converting them to use the internet to make calls (VoIP) instead of traditional fixed-line services (copper telephone lines). These older systems are usually accompanied by analog or digital desk phones which were not traditionally designed to use VoIP.

Because these older systems were primarily designed to use traditional fixed-line services, converting them to work with VoIP may give you some cost savings but will not be able to give you the full features, benefits, and functionality that comes with modern VoIP phone systems.

Your phone system currently looks like this:

After the conversion your phone system looks like this:


  • This is a cheap way to achieve some cost savings because your calls are coming through over the internet (VoIP) instead of your traditional fixed-line service.
  • Most older business phone systems can be converted to work with VoIP if you put in place the right conversion hardware.
  • Can provide a lower set up costs because you are adapting an already working system.


  • This option is a disadvantage If you are looking to link multiple office locations. This means, for example, that you will not be able to check if someone at another office is on a call.
  • Poor scalability- The traditional phone system may be limited by existing hardware which can make adding more users, locations and/or phone lines a complicated and expensive process.
  • Older converted phone systems may be end-of-life with the manufacturer, a faulty component may result in you having to partially or even completely replace your system.
  • Converting your traditional phone system to work on VoIP does not ‘upgrade’ its functionality in any way. This means that you will not benefit from any features that a modern VoIP phone system can offer. (e.g softphones, call forwarding etc.) you will also be limited to analog or digital phones not the latest VoIP Phones + headsets.

Method 2: Upgrading a Compatible Phone System to Work With VoIP

Unlike the conversion process detailed above (which we recommend you avoid at all costs), you may have a phone system which is compatible with VoIP making the upgrade process quite straightforward without requiring the purchase of any additional conversion hardware.

Your phone system currently looks like this:

After the upgrade your system looks like this:


  • Cheap upgrade to achieve some cost savings.
  • Can provide a lower set up cost because you are adapting an already working system.
  • More reliable solution when compared to method (1) above.


  • Often hardware such as the business phones(digital/analog or VoIP) are proprietary. Using another brand of VoIP phones may require additional licensing and as such may not utilize the range of features supported by the proprietary phone.
  • Poor scalability – Some traditional phone system ‘boxes’( the brain of the system) have a finite number of extensions or lines that they will support. Should you reach the limitations of the hardware you are using, you may find that you have to upgrade the ‘box’ of your phone system.
  • If the business phone system (‘box’) is end-of-life with the manufacturer, a faulty component may result in you having to partially or even completely replace your system.

The Two Methods We Recommend to Our Clients:

While there are some exceptions, due to the disadvantages that Method 1 and 2 present, we do not usually recommend either to our clients.

Remember modern VoIP systems are much more than just a cheaper method to make calls. Modern VoIP systems can increase staff productivity, add new functionality, modernize your workplace and improve overall customer satisfaction. Should you want to harness the full power of a modern VoIP phone system for your business, we would recommend installing a modern VoIP phone system using one of the two approaches we outline below.

Note: There are also certain situations where we would recommend a combination of both (hybrid system). This is a very tailored approach and thus not discussed in this post. Please click here to get a member of our team to contact you should you require more information on Hybrid systems.

Method 3: On-Premise Modern VoIP Phone System

Your phone system currently looks like this:

After the installation your system looks like this:


  • Modern VoIP systems e.g ( 3CX On-Premises/Yeastar On-Premises) are primary software driven whereas older business phone systems are based on propriety hardware. The hardware used to run a software based phone system costs considerably less.
  • Allows you to benefit from the full list of features and customization options that come with most modern VoIP systems by default without licensing upgrade costs or new hardware modules.
  • Does not limit you to any proprietary hardware and allows you to use most modern off the shelf VoIP desk phones and headsets.
  • Can introduce fixed line services for redundancy which can be useful if you require emergency calls in your business or organization.
  • Find out more about our modern VoIP systems here.


  • Initial cost can be high because it requires you to purchase all the hardware, modern VoIP ‘box’, phones, and contracts to maintain the phone system up front.
  • If your Internet goes down, your phone system goes down. There are failover options available but it is important to stress that this system requires a reliable internet connection and ongoing support and maintenance to limit the possibility of downtime.
  • Because of the above point, there may be additional (optional) costs which you choose to incur to ensure minimal downtime e.g. some situations may require you to invest in a backup power supply and/or multiple internet connections.

Expert Tip: Don’t listen to the ‘’There is no scalability or future proofing with On-Premises VoIP’’ arguments. Uneducated salespeople or colleagues may try to tell you horror stories of having to rip out the whole system and replace it if you want to expand or upgrade your system. While this may have been true 10 years ago, a lot has changed since the early days of VoIP. The new On-Premises VoIP systems have a modular design and field upgradeability so expanding the capacity and/or improving performance is easy. Simply swap out the modules and bam ­ you’ve got a bigger system without even having to buy a whole new box.

Method 4: Cloud-based / Cloud Hosted Modern VoIP Phone System.

A Cloud-Based/hosted VoIP phone system refers to a situation where ‘box’ or brains sit in the cloud instead of on your business premises (which was discussed above).

Your phone system currently looks like this:

After moving to the cloud your system looks like this:


  • Generally, lower initial cost deployment because you don’t need to buy the VoIP On-Premises ‘Box’ and instead only pay a monthly fee for the hosting your system in the cloud plus the cost of any calls you make. (Although, you will still incur the cost of a router, switch, internet connection, VoIP desk phones etc. because these costs apply to all methods.)
  • Depending on who the provider is, maintenance support and or the rental of your VoIP desk phones may be included in the monthly fee. (For more information on this see our pricing section)
  • You will be able to use most/if not all makes and models of VoIP desk phones, although we do recommend specific makes an models.( not all VoIP Desk phones were created equally.)
  • Unlike an On-Premises system at one of your offices, there is no single-point of failure (if you have chosen a reputable provider). If your office locations lose internet connectivity or power, the phone system will still run and can deliver your phone calls to smart phone apps on your mobile.
  • Since your system is backed up in a reliable data center you will benefit from backup power, multiple redundant battery power supplies, and multiple redundant internet connections to ensure minimal downtime.
  • Find out more about our cloud-hosted systems here .


  • You will be unable to introduce Fixed Line Telephone services for redundancy. This is important if emergency calling (eg: medical center) is required. VoIP providers implicitly state that emergency calls are not supported. (they do work however not guaranteed or geo tagged when calls are placed)

Note: While the above point is true, this disadvantage is minimized by the prevalence of mobile phones.


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