On Premise vs. Hybrid vs. Hosted VoIP

Comparing IP Solutions

By Kristine Hegglin
Updated: February 03, 2011

Voice over IP (VoIP) solutions come in many forms. Businesses may opt for an on-site VoIP solution, a Time Division Multiplexing (TDM) Private Branch Exchange (PBX) solution with a VoIP gateway, or a hosted VoIP solution. There are pros and cons to each of these types of VoIP solutions. Because every business is unique, the type of VoIP solution a business selects will depend on a variety of factors. Some of these factors may include costs, the size of the business, and the business type.

On Premise VoIP

Enterprise and mid-sized organizations typically opt for an on-site or on-premise VoIP solution. With an on-site VoIP solution all VoIP equipment and operations is stored and controlled on-site. The VoIP solution is implemented and maintained by the enterprise without third party involvement. The enterprise completely owns the VoIP solution and all associated equipment and devices, which enables the enterprise to do what they like with the solution. This isn’t the case for organizations that opt for hosted VoIP solutions.


A TDM PBX with a VoIP gateway is a hybrid solution. These solutions can co-exist with TDM PBX systems without extensive rewiring. Businesses keep their existing telephone handsets and extension lines and connect to VoIP devices through a VoIP gateway. This solution in a more inexpensive way of implementing a VoIP solution without the cost associated with a complete rewire. New wires and cables need to be installed to entirely replace a TDM PBX system. And, new VoIP business handsets have to be purchased. In general, smaller businesses opt for hybrid VoIP solutions. Enterprise organizations and medium sized businesses typically have the capital to invest in an on-premise VoIP solution.


When a hybrid VoIP solution is not an option, another cost saving solution is a hosted VoIP. With a hosted VoIP there is no big upfront investment. The cabling or wiring still needs to be in place, but companies can save on installation and maintenance costs. A third party controls all VoIP operations and equipment, except VoIP phones, at an off-site location. This type of VoIP solution generally appeals to medium and smaller sized businesses. However, hosted solutions are growing in popularity for all sized organizations.

It doesn’t matter what type of VoIP solution an organization selects. Obtaining VoIP technology is important. Voice over IP technology is the standard in today’s fast paced world full of complicated global communication needs.

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