The myth that 'Hosted' phone service costs less money is simply not true. 

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Hosted vs. On Premise phone system - from the other guys point of view...​ 

So you have heard about hosted or cloud based phone systems but are not sure that you understand the differences between a hosted phone system and an on premise phone system. Providers like to call it cool things like a hosted system, cloud system, server based or virtual system, but at the end of the day, it's a PHONE SYSTEM.


There is a myth that a hosted phone system costs you less money.  That is simply not true.  A hosted system can cost you twice the price of purchasing your own phone system.  

“Hosted” simply means that the "phone system" itself is located somewhere else, such as a data center and delivered to your premise via a broadband connection of some sort.  You would not actually own the system hardware, you rent the service you need.  With a traditional phone system, you own the equipment and the hardware is located in your office or in a common space within your office building. 


Hosted system providers want you to believe that upfront costs would be less with their solution compared to that of an on premise system.  This is not true either.  You would still need to buy phones for a hosted system – or rent them at added cost to your ongoing monthly charge.  There are financing options available for the purchase of an on premise phone system to help your company avoid any significant up-front cost.  

With a lease/purchase of a phone system all you typically have to come up with is your 1st and last month payment in advance.  Note that I said last paymentbecause that is a huge factor when considering a hosted system.  You see, with a hosted system there is no such thing as a “last payment.” With hosted service you would pay forever!  That's the benefit of owning your own phone system!  

Let’s talk features and functionality. A traditional on premise system will always have greater capabilities than a hosted system.  On premise system providers have had years to develop the software used with their systems and they continuously enhance their suite of features. That's a lot of time to develop capabilities compared to the newer players marketing hosted services.

To keep your system current software updates are free on the Samsung systems we provide and most of the features and capabilities on these systems are available via programming – there is never an ongoing monthly charge.  There is however an additional, ongoing, monthly charge for almost every added feature on a hosted solution.  

In summary, the real factor driving hosted or cloud based systems is money. The consumer believes they are paying less.  The hosted provider knows that their customers will be paying more – typically twice as much (or more) than the cost that an on premise solution depending upon how long that solution is in place.

​​THAT is the real myth behind a Hosted service solution!