If you’re thinking about upgrading your business telephone system, chances are you’ve heard the buzz surrounding VoIP (Voice over Internet Protocol) and cloud-based services. For many, if not all organizations, VoIP is the way to go. In fact, almost all modern business telephone technology, digital or not, has a VoIP component.  It’s the wave of the future!

Once you’ve decided to go with a VoIP system, the next step is to determine the deployment method, or how the VoIP service will be delivered to your business.  There are many key factors to consider before deciding on whether an on-premise or hosted VoIP system will work best for your business.

Before we get too far into the discussion, let’s talk about VoIP basics:

What is VoIP?

Voice over Internet Protocol is the conversion of voice signals into data that is transmitted over the Internet, LAN (local area network) or WAN (wide area network).  Check out our blogs VoIP 101 – The ABCs of Voice over Internet Protocol and Session Initiation Protocol (SIP) – the Language of VoIP for a quick tutorial on these two key terms and why they are dominating the language surrounding today’s business communication systems.

What is a VoIP telephone system?

Essentially, a VoIP telephone system transmits voice signals over a data network instead of traditional copper analog telephone lines.  Why is this so important?  Business telephone systems are evolving from just handling simple voice calls and faxes to offering incredible features like voicemail to email, Mobility integration, and collaboration tools like instant messaging and video chat.  VoIP brings new freedom and flexibility to how your business communicates, allowing you to place and receive calls from a wide variety of devices in any location with wired or wireless Internet access.   As you can imagine, this enhanced level of functionality hungers for speed and ease of transmission – two things only the flexibility of a data network can satisfy.

So where does “hosting” fit in?

VoIP telephone systems rely on software and computer servers to send, receive, and store your data. When moving to a VoIP system, a vital consideration is how it will be deployed.  That means, who owns the software, servers and hardware? Where is it located? Who maintains the system and what happens if there’s an issue with it?

Broadly speaking, you have two options for deploying your VoIP system:

  • On-Premise VoIP – you purchase (or lease) the software and server hardware which is installed on your premises. Your telecom provider, you or your IT team are responsible for arranging configuration, ongoing servicing, system upgrades, user support, and maintenance.
  • Hosted VoIP – your business phone system is “hosted” in the cloud. That is, on third-party servers, owned and serviced by a specialist provider, like Sunco. You gain the benefits of the latest technology and advanced call features without the headache of configuration complexity, on-site support, and in-house systems maintenance. Typically, hosted VoIP has added resiliency and redundancy features, greater than what you can achieve with an on-premise system.  More on that later.

To add a bit more complexity to the mix, there are also hybrid options that combine features of both on-premise and cloud-hosted systems.  Migrating to this specialized deployment method takes professional design and support from an experienced provider.

Importantly, you should note that all deployment methods deliver similar (fantastic) end-user features and benefits that can transform business capabilities – but key considerations like cost, convenience and flexibility will determine your choice.

What should you consider when choosing a deployment method for your VoIP system?

The decision on how to deploy your VoIP system should only be taken after a detailed discussion with a trusted telecom integrator, like Sunco, who can help identify and prioritize your needs and guide you through the pros and cons of each deployment method.

A few key points to consider:

  • Bandwidth – the first step is to check your internet service. If speeds are slow and there are reliability concerns, then an on-premise system is the wiser choice.  However, there may be strategies to augment your internet service to meet the demands of a hosted system – talk to Sunco regarding your options.


  • Cost – upgrading to any type of VoIP telephone system requires an investment, but your choice of deployment method has differing implications on the balance sheet. An On-premise VoIP system is a capital expenditure and requires higher upfront costs in software licensing and hardware, as well as the cost for third-party support (if needed). Typically, an on-premise system will last seven years before it requires a significant upgrade or replacement.  Opting for a hosted VoIP system is an operational expenditure that reduces the upfront costs for hardware and software, but you’ll be responsible for the per-user, monthly cost which covers the service and all maintenance and upgrades.  Depending on your provider, the commitment could be sizeable, and a multi-year contract is normally required.   However, the benefits of predictable costing and the convenience of having a provider fully manage the system may outweigh the monthly hit to your bank account.  It is important to note with a hybrid model you can create a solution offering the same predictive costing, while still achieving monthly savings.


  • Disaster Recovery – if uptime is critical for your business, resiliency, and redundancy must be part of your organization’s disaster recovery plan. Resiliency is on the network side and describes the ability of your system to manage an Internet or voice service failure. Redundancy relates to your physical hardware and what happens when a desk phone or the actual phone system itself goes down.  While redundancy and resiliency can be added to an on-premise solution, it is often costly and can be complicated.  Hosted VoIP systems typically offer more integrated and enhanced disaster recovery options in order to keep you connected 24/7.


  • Scalability – if your business has a dynamic staffing environment, the inherent flexibility of a hosted system might be of benefit. New users are added in a snap when business is brisk, and scaling back is similarly easy…no purchasing of software licenses or hardware is required.   If your business moves or opens another location, the transition can be seamless and quick.


  • Total Cost of Ownership – while purchasing and supporting an on-premise VoIP system demands a larger up-front investment, it can be the more cost-effective option when you compare the total cost of system ownership over its typical seven-year lifespan. This is particularly true for larger businesses with over 100 users.  That being said, many finance managers love the convenience of a single bill for a hosted VoIP service, but remember – hosting fees can quickly add up if you have many users, so always ensure you’re receiving the maximum value from that investment.


  • CRTC Compliant – The Canadian Radio-Television Telecommunications Commission (CRTC) protects consumers by ensuring telecom providers adhere to strict standards, especially in regards to 9-1-1 emergency services. When investigating a hosted VoIP provider, it is important to ensure that they are compliant with CRTC regulations.   https://crtc.gc.ca/eng/comm/telecom/ 


  • US Providers – If you’ve researched hosted VoIP systems online, you’ve undoubtedly viewed the offerings from the many American providers out there. Yes, their prices are attractive but be aware that your data is hosted on servers located outside of Canada and on-site support is not available.  If there is an issue, you’ll have to work through a call centre to find a solution, which can be frustrating and time-consuming.  The old adage, “you get what you pay for” is very true when it comes to international hosted VoIP systems.

Get the right VoIP system working for your growing business

There’s much to consider when choosing the right VoIP phone system infrastructure for your business.  Professional, expert advice is a must when exploring the world of VoIP telephone systems and their various deployment methods.  With over 20 years’ experience installing, maintaining, and supporting business communication systems, Sunco is helping businesses across Western Canada migrate to both on-premise and hosted VoIP systems and would love to help you make the right decision. Contact us today to learn more.

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