A company is built on trust, team work and effective communication. While trust and team work are equally as important as communication, there’s no denying that the two are heavily dependent on how successful your business’s communication network is. In fact, communication is so crucial to your business’s success that research has found companies that enjoy quality internal communications are “three and a half times more likely to outperform their competitors” that’s why it’s essential for businesses to build a communications network that allows for seamless collaboration and cooperation between employees.

However, there are many different types of communication network models that businesses can choose from, especially after the emergence of VoIP technology in the telecommunications industry. Now businesses have options like on-premise VoIP networks and cloud-hosted VoIP networks.

You must be wondering how the two network systems are different from each other if they both support the VoIP (Voice over Internet Protocol) technology. Well, don’t scratch your head too hard, because we’re here to walk you through it all:

What is a VoIP Network?

To understand the difference between on-premise and cloud-hosted VoIP networks, we must first understand what VoIP is and how it works. VoIP is the technology that provides telecommunication solutions over the internet, unlike traditional phone systems that use land lines to transmit calls and voice messages. A VoIP network delivers your data on the World Wide Web through SIP Trunking, which includes breaking down of your data into tiny data packages that are sent from one point to another in real time. This means that all connections are made online and people can enjoy seamless communication even on their mobile devices as opposed to being stuck to their desk phones all day. So, we see why this landline alternative is so appealing to businesses and employees, alike.

What is an On-Premise VoIP Network?

As the name suggests, an on-premise VoIP network is a communications system that’s operated on-site or ‘on-premise’ by your business’s tech support team and hosted through an in-house server. Having an on-premise VoIP network can be extremely advantageous for companies.

Advantages of On-Premise VoIP Networks

Cost-Effective in the Long-Run:

It’s true that the initial setup and installation of an on-premise VoIP network is costly, given you’re essentially building an entire communications web from scratch that means you have to purchase new hardware as well as employ IT experts to set it all up. However, as time passes, the variable cost of your network is significantly reduced, saving your business a ton of money.

Your Network, Your Rules:

The best part about building your own communications network is that you can tailor-make it to your business’s specific needs and requirements. It’s true that many VoIP service providers on the market offer customizable communication solutions, but they’re no match for an on-premise VoIP network that’s especially made for your business alone. Moreover, since you’re in control of the inner workings and configuration settings. This allows you to modify the network as you please and whenever you need!

It’s Faster:

Since your VoIP server is installed on-premise, the network lines are stronger than any network that’s hosted by a third-party. As a result, call transfers between extensions are faster and more seamless, promoting healthy internal communications.

Although there’s one downside of having an on-premise VoIP network, which as we discussed above as well is that its initial cost is way too high. This makes it inaccessible to start-ups and small businesses that have a very tight budget.

Therefore, the ideal option for new businesses is cloud-hosted VoIP networks.

What is a Cloud-Hosted VoIP Network?

Cloud-hosted VoIP networks are communication solutions provided by third-parties, also known as VoIP service providers. These are agencies that provide VoIP services over a virtual platform to cater to your various telecommunication requirements. This means that the central control of your communication network lies with the host company that allows you to carry out your communications on several devices, like your desktops and mobile phones. This model of VoIP networks proves beneficial for businesses in its own right. Of its many benefits, some include:


Right off the bat, since the communication system is hosted and controlled by a third-party, you don’t need to build your network’s architecture; it’s provided. Moreover, as many VoIP service providers can integrate with your current communication devices, you’re not required to spend huge amounts of money on purchasing new hardware and equipment.

Tech Support Provided:

Again, as a small business you’re most likely to not have a specialized IT team on board to maintain your communication network. While that’s not a concern if the network is working seamlessly, it can be really detrimental to the business if the network went down and you didn’t have the expert help to turn it back on.

Therefore, having a cloud-hosted VoIP network comes in handy as most of the best VoIP service providers on the market offer 24/7 customer support. This means that if you’re ever to face a problem with your VoIP network—which is unlikely—you’ll have instant help.

Enjoy Customized Features:

Just because cloud-hosted networks aren’t built exactly to your business communication needs, it doesn’t mean that it’s not possible to customize their services to suit your requirements. VoIP service providers offer a variety of call management and other features that can be personalized. Moreover, their data plans and pricing models are known to be highly accommodating to all sorts of budgets. This means that no matter the size of your business, there will be a plan that’s perfect for you.

What Should You Choose?

As both on-premise and cloud-hosted VoIP network models have their own virtues and vices, the choice comes down to what you prefer. If you think you’d rather make a hefty one-time investment and reap rewards in the long-run, on-premise networks are for ideal for you. However, if you don’t have substantial capital to fund your own communication network, a cloud-hosted network is your best bet. Choose wisely!

Author’s Bio

This blog was written by the experts at Top5 Business VoIP. The company is an online resource for information regarding top business VoIP service providers. They offer VoIP reviews, comparisons, testimonials, guides and much more.


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