I had better start this article with a definition of a "Cloud" or "Hosted" Telephone System. A cloud based system is a telephone system that has no physical control or switching equipment at the customer site. The only thing at the customer's site will be IP telephones that are conneted to the "Cloud" telephone system (usually via the Internet). The system or control equipment still exists, only now it will typically reside on a server in a datacentre. It might actually help if you think "Datacentre" every time you hear the buzz words "Cloud" or "Hosted". So now that we have an idea of what a "Cloud" or "Hosted" telephone system is let's go over the pros and cons. Every business is different and Hosted system are not a "fit all" solution!
No upfront capital expenditure - Typical telephone systems will run in the ballpark of $300-500 per handset. With a hosted solution you will typically pay a monthly service fee instead.
Line costs are included - Typical “on premise” telephone systems still require you to have business telephone lines provided by a carrier (Telus, Shaw, Eastlink, Bell). With a hosted solution these lines disappear and are a component of your monthly service fee.
Outdated Technology - This is a big one these days. Everyone knows that the minute you install technology in your business it is on its way to becoming outdated. With a cloud based system the physical IP phones onsite are firmware upgradable and the software running the system is upgraded on an ongoing basis.
One affordable invoice - Another big one for a lot of customers. One bill for all of your communications. How many people are getting a bill for repairs on their telephone system, one for their phone lines, another one for a different long distance carrier……?
Mobility - All modern telephone systems today are big on the buzz word “Mobility” but not all is created equal. A hosted telephone system will be able to provide your business with enhanced mobility options be it a remote worker, ringing a cellular phone at the same time, or even only using iPhones as your telephone!
Internet and Network dependent - Let me be very clear about this. Hosted systems are a viable option IF and only IF you have (or intend to have) a quality managed network! Voice traffic is very susceptible to network delays and congestion. Experience either or both of those and your experience will not be a good one.
Trust Factor - Let’s face it, not everyone is comfortable having their telephone system sitting in the infamous “cloud”. If you don’t have a certain level of comfort with the company you are considering providing your hosted service then don’t even consider it.
High Availability - The Internet is good and getting better all the time. At the most however you can expect no more than a 99.9% uptime on a hosted solution. Comparably this would be 99.99 or even 99.999% with regular carrier lines and an in-house system.
Requirement for analog devices - If your business still utilizes analog devices then be cautious when considering hosted. SIP to Analog adaptor devices will be required and will add an extra layer of complexity.
As I said every business is different and a Hosted Telephone System is not a fit for every business. The best advice I can give if you are seriously considering this move is to call and talk to a company that offers both technologies not just one or the other. This should increase your chances of having an engaged discussion with a knowledgeable sales engineer who will consider your business needs and look at both options.