Is Your On-Premises PBX Costing You More Than You Think?

Posted by SAS on Jan 7, 2019 11:33:00 AM

When moving away from your on-premises PBX, there’s often a list of reasons holding you back. 

So, what’s holding you back?

Nine times out of ten, it’s the elephant in the room. The on-premises PBX.

But why would your on-premise PBX be holding you back?

Many years ago, you implemented a phone system to be the backbone of your business communications. It was leading technology in communications at the point of installation, and there is commonly a  fear of migrating away when so much investment has been made in money and in the skills to run it.

However, the fear of migrating away could be costing you money today.

Despite the assumption that the one-off charges were covered on day one, your on-premises setup is probably costing you more than you think.

Initial Costs

There are the obvious costs of purchasing all equipment, such as a rack, cabinet and switches then either cabling or outsourcing the cabling and installation. On top of these, typically there are analogue or ISDN lines installed by BT Openreach, unless you’ve already made the move to SIP trunking. 

These phone lines require yet another expensive installation of more kit to your site. Often, because the phone bills are dealt with separately. Typically, we see one for phone lines and calls, and another for telephone system equipment. The combined actual cost gets overlooked.

CapEx vs OpEx

Whilst it’s nice to pay for items up front, cash is king. In consumer life, if you have the capital to pay off your car or house then you probably would. However, in business, it’s more sensible to dip in and out.  

Many businesses are held back by the prohibitive costs of the traditional PBX market. In most cloud markets, the cloud phone system market in particular, the OPEX model can really benefit your business. 

CapEx tends to be a large purchase that loses value over a number of years. This is preferential for tax purposes. Operational expenses, on the other hand, refer to your ongoing business costs. These costs are tax deductible within the same year, which leads to lower overall expenditure on essential assets. Making the simple switch from a CapEx to OpEx model for your business communications means you can recoup your costs more quickly. 

Ongoing Charges

When purchasing the initial on-premises PBX, it’s easy to assume that everything has been paid for. However, budgeting for running costs still needs to be factored into your business plan. 

Let’s assume that upon implementation you have paid the entire one-off costs. It’s not a case of feet up and wait for the next phone system to be installed. Ongoing charges of an on-premises are made up of several factors.  

Phone Lines

Analogue or ISDN lines are typically required with on-premises PBX setups. These are considerably more expensive than SIP trunks, and will eventually be phased out by a BT Openreach decision to decommission legacy ISDN technology. With a cloud phone system, your connectivity is utilised as the transport for your voice traffic so no phone lines are required.


Unlike with cloud phone systems, maintenance and support is not included in your ongoing costs. You likely had a few months' worth of free maintenance included with your initial contract. However, to ensure your system is fully operational all the time, you will need an ongoing maintenance agreement. 

Repairs and Engineering

Maintenance will cover certain aspects of your telephony, possibly routine replacements and genuine faults with equipment that comes with a warranty. Anything outside of the terms of your maintenance agreement will cost each time you require an engineer out to site or a replacement part for your phone system.


It is possible that you have a call package with your phone line provider. However the charges for making calls over the PSTN network are considerably more expensive than calling over SIP or VoIP. 

As cloud phone systems utilise the internet and private networks for calling, premium call charges disappear. What’s more, calling between sites is free when both or many sites are connected to the same network.


Managers of legacy style PBXs will be used to licensing models where you have to pay for each addition you make. Each time you need to renew a module, software instance or piece of equipment, there is an ongoing cost for an item you assumed had already been paid for.


If the phone system is the hub of your business, availability is crucial. When your phone system goes down, this means you come to a standstill. 

If you can’t receive calls, you are not serving your customers. If you can’t make calls, your team isn’t selling. Ultimately, if the phone system is down, you are losing money.

Long gone are the days where everybody downs tools and heads for the canteen. Through cloud technology and business continuity planning, even if part of the cloud infrastructure fails, you are supported by a comprehensive business continuity service.

In the event of a natural disaster or equipment or network failure, businesses can reroute calls to maintain telephone service to any location and any device, including landline phones, mobile devices and PC-based softphones.

Lack Of Productivity

The introduction of key features and themes in cloud phone systems changes the way businesses work. With these new features, you enable your business to become more productive. 

Below are just a few snippets you can expect, as standard, when deploying a cloud phone system. These each come with their own method of recouping costs when moving to a cloud system.

Auto Attendant: drives self-service for customers and removes the burden on staff to manage incoming calls. This frees up resource for other areas of your business

Mobility: in an on-premises world, users are tied to their desks. With cloud phone systems, mobile apps and find me follow me functionality enables you to take calls anywhere, saving time and money returning to the office to take calls.

Conferencing Calling and Virtual Meetings: travelling to and from meetings is timely and cost inefficient. Shifting resource nationally, and even internationally, can be reduced by the introduction of conference calls, video calls and virtual meetings with content sharing and collaboration features

Once you have come to terms with your on-premises PBX still costing you money, years after installation, it’s time to take a look a cloud phone systems


If you would like to find out more, then you may like to read one of our other blogs or downloads, or request a conversation with one of our consultants. We are always happy to discuss, without obligation.