Hosted vs On-Premise Unified Communications: How to choose for your business?

by Daniel Clements – Managing Director, Shesh Tech

Unified communications (UC) are the enterprise integration of real-time communication services such as instant messaging VOIP telephone systems and video conferencing services. In a growing technology market, businesses are opting for unified communications due to its scalable and flexible nature, offering businesses full-featured services at great business value. The next challenge businesses will face will be whether to choose a cloud-based, hosted UC solution or deploy an on-premise system.

This article will explore the benefits and potential challenges of choosing either a cloud-based system or an on-premise solution. Fully understanding both systems can make sure you make the best decision to ensure your business’s needs are met and you get the greatest return on your investment.

The Upfront & Total Cost of Ownership (TCO) for UC solutions

Cloud-based hosted UC solutions have low upfront costs and are charged as monthly fees per user or per extension. The reason for the low upfront costs and monthly fees, is that hosted solutions connect through the internet to a provider who maintain your systems at an offsite data centre. On-premise solutions have higher upfront costs but then no monthly fee.

A cloud, hosted system can have a very low TCO due to large savings in not needing to employ IT engineers, and because your UC provider will take care of much of the server configuration and maintenance. Depending on the size and structure of your business, this can be an advantage of hosted UC over on-premise UC.

Hosted solutions tend to be more appealing to small businesses with 5-15 users, whereas on-premise solutions can be more cost-effective with higher numbers of users. Having said that, large enterprises with more than 100 users may choose a hosted solution due to its other advantages. To learn more about these advantages, you can speak to a Shesh Tech UC specialist here.

Compare UC Features

One of the most important considerations to choosing a UC solution is looking at what features are offered. If your business requires critical business communications features, such as conferencing, voicemail, IVRs and queues, then check your solution of choice offers these features. Often cloud-based solutions will be missing these features, or at least offer them at an extra cost, so be sure to plan exactly what your business may need before deciding on a UC solution.

Existing Infrastructure

You must always consider your existing communications infrastructure. It can often be much more cost-effective to build on infrastructure with good hardware, that still has a long lifecycle left. If you are using a legacy system to connect your phones to a Public Switched Telephone System, which uses Time Division Multiplexing, then this can often be very expensive. You could save a lot of money by moving to internet-based UC. This is where cloud-based solutions have benefits. However, if you want to keep your existing infrastructure, then an on-premise solution with telephony interface cards, may be the better choice. Both decisions have value.


This is often where businesses make the most mistakes. As a business owner, you are too focussed on what type of infrastructure you need now. At Shesh Tech, one of our core values is scalability and agility. We make sure to deploy systems that have the potential to grow as your business grows. Where do you see your business in 1 year, 5 years or 10 years? If there is going to be rapid growth, this will need to be considered. Hosted solutions often are much better at scalability. Providers have off-site data centres with the ability to host many more users than you will ever need, so adding more users is easy. When purchasing an on-premise solution, you will need to consider purchasing a larger, and more expensive appliance, that can accommodate growth.

Choosing the correct UC solution can be valuable to the success of your business. Each of the many factors, that need to be considered, have their strengths and weaknesses. To make sure you make the best decision for your business, why not speak to one of Shesh Tech’s UC specialists for a free consultation. They will provide you with the correct advice, and information regarding your communications needs to ensure you end up with the best system for your business.