With an on-premises IP system, all the equipment and hardware required to facilitate VoIP calls resides in your office. The IP phone service connects to a virtual PBX in the office via the Local Area Network (LAN).
You can choose to use phones you originally used with your legacy PBX to a VoIP provider’s system. Using Session Initiation Protocol (SIP) trunking, you can course your internet-based calls through the PSTN and connect with people who are still relying on landlines.
This option originally became popular because it offers more cost savings than traditional phone systems. Long-distance calling fees with VoIP are typically much lower than they are with traditional telephony, for example, while still more or less functioning like a regular phone system from the user’s perspective.
There are other perks to going with an on-premises solution. For one thing, IP phones provide businesses with HD call quality, and a range of advanced business phone features that you won’t be able to expect from old-school telephones.
This type of internet-based phone system also gives you total control over how your communications operate. For example: you can add lines and phone numbers from within your office.
However, there are some challenges associated with this setup. Among other things, it requires you to invest in physical hardware (IP phones, handsets, etc) and Ethernet ports. It also makes an on-site IT team that can expertly manage the system a necessary expense for your organization.
That’s why these business phone systems aren’t the top choice for small businesses anymore. Instead, more businesses are opting for hosted VoIP solutions for the increased flexibility and scalability they provide.