sundance-communications.com/forum Forums General General Telephone & Systems Information Hosted VoIP vs. On Prem PBX Debate

Mitel has discontinued all digital phones, they have streamlined to their 6900 series of ip phones and concentrating on their MiVB which is available as a software package to be installed on customers server or public cloud or private cloud.

In my opinion if all the manufactures above had gone to a full ip software based system sooner they might still be able to compete...

any medium to large size company that opts for hosted is throwing money away

100 phone hosted roughly 24000 a year. 120,000 in 5 years 240,000 in 10 years and so on

100 phone software pack installed in cloud or onsite server roughly 85000 first year and still the same 85000 after 10 years

Thanks telcom1 - and you're not wrong about the high cost of cloud, especially for larger sites. Sometimes it still makes business sense because of unique cloud functionality but certainly not all the time!

What was the last line of digital phones that Mitel produced? And do you know when they went end of sale?

I think you may have forgotten the cost of dial tone and service on a prem base PBX. At 100 sets you may need 2 pride. If you amortize your PBX and add in lines and maintenance you could be close to cloud. Here is what cloud may give your customer...1 no cost feature set upgrade 2. Advanced call reports. 3. Call recording. 4. Mobile app without extra livening. 5 eFax. 6. Voice mail transcription. 7. Network issue diagnostics 8. Customer can upload emergency or bad weather announcements for a.a. anywhere they have a laptop. 9. Software phone without any additional licenses 10. Remote sets that don't require a VPN. 11m. Easily changeable music on hold via a web portal. 12. When the Internet is down calls still hear voice mail options and mailboxes because that is all in the cloud. 13. Ray baums compliance meaning enahnced 911 location reporting showing floor and room location for each phone and remote extensions. 14. Karis law compliance so when someone on the system dials 911 then someone on site can be notified. 15 as an add on advanced call center functionality with a.i. analysis. 16. No fear of product being obsolete because you can switch providers if yours closes shop ..ring, GoTo. Packet 8 etc...if you stay with Yealink or poly you should be fine on the set side for long term support. 17. So easy to tie multiple locations together without sign licenses or VPNs. 18. Because there are no PBX station cards a customer with multiple locations can easily move sets around if one location grows and another shrinks. 19. Texting in and out on your main number via an often included soft phone or mobile app. 20. Your larger providers include 24x7 remote support.

I have many more where cloud beats prem.

For you; mailbox money. Meaning you make a sale and often you do very little after as most providers do the set up and programming and training remotely, and make a monthly deposit in your bank account regardless of where you are vacationing that month!

A 100 phone sale billing around 2k each month might pay you a one time spiff of 6 to 10k depending upon provider and you do very little as the provider does the webinar, proposal. Closes, provides the equipment, Ford the programming, trains, and supports. You just bring a potential customermm. You need no parts or inventory outside maybe a demo set. No office, secretary, or even office (unless you are doing cabling or have legacy pbxs you are maintaining).
On a 2k per month sale a typical monthly residual could be $400 per month..again pure mailbox money you have zero tech or ongoing support obligation for. Do 1 sale a quarter of a few smaller ones that total 100 phones per quarter, in 5 years your monthly checks would be around 8k per month! Again with zero ongoing support or responsibilities. 8k to your bank account regardless of where you are. What your doing. Or even if you are still alive... Thr money flows to your account and then to your heirs. And often these sold customers are very slow to leave your provider if you have a good one because often once the phone are humming along it's a if it ain't broke don't fix it situation
Am I big on cloud? You bet. And you haven't even got me started. I should start to do paid advising or consulting or something right?

Wow. So a long answer sells us? Who's paying monthly for this stuff and if they have a finite amount of money, what happens when it runs out?

The infrastructure still has to be built, so in new construction, it's easy. In retrofit, you get to use gateways. That 100 phone hospitality property in backward country just turned into a nightmare. High speed internet? Spectrum '100 down 20 up' some of the time is tough when it goes to 10 down and 3 up. But wait! You can increase the speed to 400 down and 20 up!
Yeah. Still goes to maybe 100 down and 5 up.

Kari's law is easy. Baum? Our state still can't get it right. Unless you factor in about $2 a month per room for exact mapping, there's still no magic formula to make it work, unless they changed the PSAP at the 911 center.

When the internet goes down...You still have no service. It's not a selling point.

I could pick this entire post apart, but it's not productive. Sure. The only one who makes out is the vendor getting the spiffs, maybe the customer who can be bamboozled into low entry costs but paying several times over the cost of a system, and the dial tone provider.

I'm not against hosted. I am against someone trying to extol the virtues of hosted without pointing out the pitfalls. I have access to all of my Voip systems and can do the same things a hosted can do, except change out a gateway. The hosted system still would require the same maintenance if the hardware fails.

Carl

Carl, thanks for the response.
1. The dollar side... as I show, and it varies, it may not be that much more.. in fact at 100 phones, it might be a wash. But yes having a smart phone costs a bit more than a flip phone, but our country is not out of money because people have all spent extra on a smart phone. Same with hosted. Companies do more, are more productive, etc and often easily pay for the extra cost, if any, of UCaaS.
2. What infrastructure? In a building- most companies have a network or wifi. Most new phones can run quite well on WiFi. Out of building, yes the internet is being upgraded all over whether your customers choose VoIP or not. I disagree public funds should be used, but they are, and upgrades, fiber, etc is happening regardless what phone choices are being made.
3. Ray Baum is a national law so I'd comply regardless of what is going on with your particular E-911 dispatch center. Most of the country has E-911 working correctly and should be putting in phones that comply. Victory for Hosted on this one.
4. No internet? No problem. Most big providers have cell phone apps. But the old way, no dial tone- ya, you got no back up.
5. Bamboozled? For what you get UCaaS is often a much better value.
6. Pick my list of 20 items apart? Lets discuss- Because I am not running around fixing stuff today I have most of the day to discuss this- maybe go see an afternoon movie with the wife today BECAUSE my customers are calling 24x7 support from my provider.
7. Ahh, the big difference- you are changing hardware... while I am at the beach letting my back end do any back end hardware change outs... and most big providers have multiple redundancy centers as fail overs.
8. Is UCaaS perfect? No tech is, but it is often a great upgrade for customers, and if done right, can be great for the sales agent. It is difficult to top Mail Box money- residual checks each month for a sale you made years ago and don't have any on going responsibility. Its a beautiful thing.
Thanks for discussion.

Yes I have lost sales to the cloud, only when the customer signed the contract without consulting with someone like me, I have never lost a sale to the cloud when the customer did consult with me, why? read BrianS last paragraph, who benefits the most? Not the end user, by a long shot!

Moved debate here.

Hosted has its place. The biggest snag some of my customers had with hosted was the concept of now having to pay an additional $25 bucks a month to have a phone on a new employee's desk. Forever. Premise equipment meant you buy another phone, pay to have it installed and its done and dusted. The monthly charge is paid for in about a year. This was an issue for some, but not for others. Mostly larger companies that had tax concerns were OK with additional monthly charges, but smaller mom and pop outfits would rather pay for something and be done with it.

I was not going to waste my time replying further to the thread. Vodia had a blog post on the benefits to premise systems. The gist of the explanation is that static installations don't need any of the hosted crap. Since 100% of my installations to date are static, I don't need the "features" of a hosted system. My advanced VoIP system does remote access, has VoIP trunks, and requires no cables..just the power cord.

But Dans, you said it best :-)

I think it depends on the application. Been doing phones for 45 years, NEC & Toshiba for close to 30 years. I remember the selling point for NEC is "They never break" Now they say you need to convert your customers to cloud. It is very hard especially now that NEC is out, trying to sell customers on cloud. I hear the same response, "But it's not broke" You have to read your customers. Customer has a NEC, over 100 phones, Cat3 cabling, no POE switches and it is a manufacturing facility. The cost would be out of control. They don't want or need cloud. Other customers want the apps and want cloud. It just sucks that customers are having cloud shoved down their throat...

I had a customer with a Panasonic system. Fate struck and they had a fire that destroyed 1/2 their building! Now they needed a new system that could have 1/2 of the extensions in a remote location and the other half on the part of the building that was behind the firewall and only had minor damage (smoke, water, electricity) well, not totaled.

The solution was to put a premise IP system in the repaired facility, and link the 8 extensions via IP to the mother ship. They paid one price for installation, two internet accounts, and 18 new IP phones with the ability for WiFi or wired access. The giant cable run going to the plant that melted, was replaced with a pair of network cables and an access point fed all the plant Wifi phones and paging. Any of 8 users can take a system phone home and link back to the main phone system...the 12-16 character random password keeps intruders off the system. They occupied the second site for almost a year before moving back into the burned out section. Now it's back to a single site with 2 wired and 18 WiFi phones, 2 paging speakers, and 2 911 sites from the main system.

The infrastructure is still intact for the half of the building that was behind the firewall, but WiFi was my friend and I didn't have to convert the jacks to Cat-5e 8-ping. However, I did have to convert the two wired phones (lobby, kitchen) to the new system and on the POE switch.

My office has an extension from their system. At a glance, I can look at the BLF and see if anything is broken. Someday I'll probably remove my extenson...but I'm not in any hurry.

If companies are not in the Cloud yet, they will be. Brian is correct

I talked to a person with an old Nortel. He has 4 lines from the CLEC and about 20 phones around the office and warehouse. Most of the warehouse phones only have phone wiring.
The customer doesn't care about any features. Just wants the phone to ring and intercom the office. Hard to sell him on VoIP. Monthy costs are sure to go up since you have to pay for every device.
But his current PBX really needs to go to the recycling bin.

Our office doesn't install new premise systems, only hosted at this point. We have a handful of legacy premise PBX systems out there that we still support.

I looked into the upgrade path for Nortel sets via E-Metrotel. Wow. Here's an example of someone who gets their hooks into you and never lets go. Two year old 6.0 software eol'd 12/2023, But wait! There's more. An annual fee IIRC and it never stops because, as it says: If you don't upgrade, you have no support. https://documentation.emetrotel.com/release-7-0-update-process/

It seems to me that the annual fee was pretty pricey.

The good news is an MICS or CICS Nortel system is probably pennies on the dollar.

Carl

That's just it: The bean counters who make these transition decisions only look at the initial cash outlay, and maybe the first years' service. Often, the first year of service includes promotional pricing. That is soon forgotten by year two when the pricing reverts to standard rates and forced updates ensue. It's like price bundles with cable TV.

Quite a situation for some. Several years ago I serviced a town's school TDM systems. Parts were becoming limited because production ended about 15 years ago. Like a warehouse or older shop/factory environment, most classroom phones were wall mounted with cat 3 cable. So there would be new cabling costs too when going to VoIP - at least if the phones were to remain where they are. Many of these smaller companies have only been paying for service from the telco, and only a cost if they required service or a move.

While I have internet based home phone service with an ATA, I'm keeping my modified 1A2 system in place at home with cat 3 all over the place.

Many sets are now wifi..Yealink t34, t54 etc. We like to hardwire everything but can wifi when there is no cable nearby.

I use to love my early cell phone. It was a flip phone. But I had to adopted and pay more for my smart phone as technology changed. Now they don't even service many flip phones.

Yes Wifi seems to becoming more common. While waiting at a car salesman's desk, I looked to see if the network cable went to the phone, then the pc. I then saw the phone was only connected to a power supply, it was a Yealink phone.

It's surprising how cabling can simply be overlooked. Had a customer that moved into a nice and new remodeled facility with a large warehouse. There was no cable of any kind run to the only desk. The computer and Grandstream phone used Wifi, They needed a WiFi extender, but I was surprised how well the phone worked.
That particular system with about 15 phones was hosted, The wired phones, like many of that company's hosted systems - experienced a somewhat significant audio delay.

✅ Hosted VoIP: Cloud-based, cost-effective, and scalable—perfect for remote teams and easy management. No hardware maintenance!

✅ On-Prem PBX: Full control, enhanced security, and ideal for enterprises with in-house IT teams. Requires upfront investment & maintenance.

🔍 Choosing the best depends on your business needs. Want flexibility? Go VoIP! Need full control? On-Prem PBX might be the way.

What’s your pick? 🤝

Call me a cynic I like on Prem. full control I don't like not knowing where the backend is located or who has access to all my smdr call records.

I'm never one to say there's no place for on-prem, but as far as the SMDR argument goes - the telcos (line providers) have always had that data no matter how old your PBX is.

I just learned about Fanvil PN1 2 wire converters in this thread:
https://sundance-communications.com/forum/ubbthreads.php/topics/645591/2

I haven't convinced my office in getting any to try out. Our office has a Toshiba customer that we would like to convert to Hosted, but they have many phones on Cat 3 with no data nearby (such as the Kitchen and Bar). A couple of these for a warehouse could easily save a lot on rewiring.