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Which is better in the long run: On-premises or hosted UC?

How do you decide between on-premises and hosted UC? Expert Zeus Kerravala explains how to determine which is a better long-term option.

I am in the process of replacing our Index 400 and am looking at two options: hosted VoIP provided by Claranet and on-premises services with Avaya's IP Office. My choice is hosted UC because of the rapid deployment, resilience and rich features. My financial director's choice is the on-premises solution because of the lower overall cost, good mobility features and it is software driven. Both will do the job, but which is better in the long run: on-premises or hosted UC?

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The answer is that it depends on how long you plan on keeping the unified communications (UC) solution and how quickly you want to add new features.

As a general rule of thumb, if you're comparing apples-to-apples features, the break-even point with on-premises versus hosted UC tends to be in the 48-month range. If you keep your solution for more than five years, it's cheaper to buy on-premises.

I believe hosted UC to be the wave of the future, however. The reason is that it's easier to deliver functionality off-net without the need for VPN clients. Remember that this isn't the old telephony industry where new features were rolled out once in a blue moon. These are software solutions where the changes can be implemented quickly, so adding new features is easier with hosted UC because the service provider is responsible for adding them instead of the individual enterprise. Also, with the cloud, no spares kits or software patches are ever needed.

If there are specific features that you need on IP Office, or you plan to do some custom feature development, then I recommend you use IP Office. If you're just using basic features, then go the hosted route because the lower maintenance costs will make it cheaper and easier in the long run.

Learn more about on-premises and hosted UC options:

Dig Deeper on Developing a UC Strategy

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