The importance of the decision between an on-premise, cloud, or hybrid communications model cannot be overstated. It will influence capital and operating expenses, communications capabilities, the customer experience (CX), and even your cybersecurity posture. The timeliness of the decision is also critical.
As we pointed out in a recent article on CX trends, AI innovations are supercharging customer expectations for personalization and convenience. Yesterday’s advanced capabilities, such as seamless omni-channel communications, are quickly becoming baseline standards. One thing’s for certain: it is far better to proactively plan and choose a path, rather than delaying the decision until you’re forced to make a change.
As we’ve explored in past articles on Unified Communications (UC) trends and cloud computing advancements, there’s no one-size-fits-all “best” option for everyone. But, there is a best option for your specific business. This article will break down each model so you can see the benefits, drawbacks and other factors that will help you make the best decision.
On-Premise Communications: Control, Ownership, and Customization
Simply put, on-premise communications systems mean that your system hardware is in your building and runs on your network. You have to purchase and maintain everything. While many associate “on-premise” with “obsolescence”, this is not necessarily true. There are modern, premise-based platforms that offer advanced communication features. The Mitel CX platform, for example, offers omnichannel capabilities, intelligent routing, workforce management, AI-powered tools and more. It can be used in hybrid, private cloud and on-premise deployments.
On-Premise Pros
- Control: Because you own and maintain the on-premise system and network, you can control how everything is configured.
- Customization and Compliance: This level of control enables businesses to customize their communications tech stack with specialized integrations, unique call routing parameters, or anything else their hardware can accommodate, which is especially important for organizations in highly regulated industries.
- Predictable Long-Term Costs: While on-premise systems require a capital investment upfront, their ongoing expenses are typically limited to maintenance, licensing, and support. This means in the long term, they can be more predictable than pay-as-you-go subscription models associated with cloud platforms.
On-Premise Cons
- Responsibility: Either an internal employee or a trusted contractor has to patch, maintain, secure, and troubleshoot the system. If there’s an issue or outage, it will be on your team to resolve.
- Scalability: Adding capacity requires buying and installing new hardware. If you’d like to scale back down in the future, the costs will have already been sunk.
- Technical Limitations: With cloud-based systems, new features and functionalities are generally effortless to access. With an on-premise system, even something like integrating distributed teams requires additional configuration, security controls, and connectivity planning.
Cloud Communications: Ongoing Flexibility and Low Up-Front Costs
In a cloud communications model, your platform provider is responsible for running and maintaining their own data centers. You access voice, video, messaging, and other communication and collaboration tools through a subscription, typically priced per user. This is commonly referred to as Unified Communications as a Service (UCaaS).
Cloud Communication Pros
- Flexibility: Scaling up or down, accommodating remote and hybrid employees, incorporating new tools and technologies, and making other adjustments is generally a seamless process.
- Low Upfront Costs: Unlike on-premise systems, your platform provider is responsible for the upfront infrastructure costs. This shifts the investment from a large capital expense (CapEx) to a comparatively small monthly operating expense (OpEx).
- Reduced IT Burden with Greater Business Continuity: In contrast to on-premise systems, your platform provider is responsible for patching, maintaining, securing, and troubleshooting the system. Additionally, updates and new feature releases are automated. If your building loses power or connectivity, your communications will be unaffected in the cloud. If there’s an issue with the system, it’s the platform provider’s problem to solve.
Cloud Communication Cons
- Reduced Control and Compliance: The provider runs and updates their platform as they see fit, regardless of your schedule. Additionally, your communications data lives in the provider’s cloud. This introduces a range of data governance concerns for businesses in highly regulated industries.
- Internet Dependency: Your connectivity will ultimately determine call quality, availability, and overall performance. Many businesses require an SD-WAN and connectivity strategy when deploying a cloud communication platform.
- Accumulation of Subscription Costs: In theory, UCaaS offers a more manageable and predictable cost structure compared to on-premise. But in actual practice, it’s easy for subscription costs to accumulate. Licenses for employees can remain after they leave, premium tiers are often extended to users who really don’t need them, and add-on features and modules can layer costs to the point where they are difficult to understand and streamline.
Hybrid Communications: The Potential Best of Both Worlds
In a hybrid deployment, elements of on-premise and cloud communications platforms are combined into a single, unified environment, tailored to the organization. This could mean an on-premise PBX phone system at a key location while branch locations use a cloud communications platform. Or it could be that all voice calls are on-premise, but video, social and collaboration tools are on the cloud—whatever works best.
Hybrid Communication Pros
- Control, Customization and Flexibility: Hybrid combines the control and customization of on-premise with the ability to scale and incorporate new technologies offered by cloud communications platforms. For example, sensitive communications can remain on-premise while employees leverage a cloud platform for communications and tasks that are not bound by compliance regulations.
- Balancing Your Costs and Internal IT Capacity: Hybrid offers the ability to strike a balance between CapEx and OpEx, freeing your IT employees to concentrate on high-value duties.
- Making the Most of Your Investments: If you have an on-premise system that you like, a hybrid model can allow you to integrate it into a modern, advanced communications tech stack. Additionally, a hybrid model can enable you to migrate elements of your communications to the cloud and evaluate your ROI as you go.
Hybrid Communications Cons
- Overall Complexity: Hybrid requires you to manage three major components: the on-premise environment, the cloud environment, and the integration between the two. In addition to technical complexity, it also requires additional administrative work.
- Expanded Areas of Expertise: In order to deploy a hybrid model effectively, it requires expertise in telephony, cloud platforms, networking, and security. Outside of enterprise organizations, this skill set blend is difficult to find in internal teams.
- The Double-Edge of Balance: As hybrid offers the potential advantages of on-premise and cloud models, it also offers the potential drawbacks. Avoiding this potential negative requires the multifaceted expertise outlined above.
A Real-World Hybrid Example: Mitel + Zoom Workplace
Mitel and Zoom offer a purpose-built hybrid communications solution that integrates Mitel’s enterprise telephony platforms—including MiVoice Business, MiVoice 5000, MX-ONE, and more—with Zoom Workplace and Zoom AI Companion.
Users get the control and security of an advanced on-premise business telephone system while being able to call, meet, chat, and tap AI-powered collaboration tools from an advanced, cloud-based platform. For businesses in highly regulated industries like healthcare, government, and finance, Mitel + Zoom Workplace truly represents the best of both worlds.
Self-Assessment: Six Questions to Get Started
While these questions are just scratching the surface, answering them at the beginning can help ensure the success of your migration.
- What’s the state of your tech stack? For example, if you have a fully functional, well-supported on-premise telephony platform, that’s an argument for going hybrid or remaining on-premise. If your system is at the end of life, that’s an argument for going to the cloud.
- What’s your budget for new investments? As the decision between communication deployment models leads to higher CapEx or OpEx costs, your current budget can help determine which path works best.
- Where do your employees work the most? A truly distributed workforce makes a stronger case for cloud or hybrid models.
- What are your compliance requirements? The more stringent the regulations and greater the need for strict data governance, the stronger the case for an on-premise or hybrid deployment.
- What’s your internal IT capacity? Organizations with robust IT support have the most latitude in choice. Leaner teams may be better served by cloud deployments, or by leveraging managed IT solutions for on-premise or hybrid options.
- How robust is your network? Businesses with strong, redundant connectivity can be excellent fits for a full UCaaS cloud platform. However, businesses with issues regarding bandwidth, QoS, and redundancy may need to improve their network infrastructure before making a choice.
Making the Right Choice Is Just the First Step
The best communications model for your business isn’t a matter of opinion; it’s the product of detailed analysis. Even if a particular solution offers the most appealing features and benefits, it may not fit into your long-term budget or satisfy other regulatory requirements. That’s why it’s so important to find a partner who is neutral to all deployment models and vendors.
At IPC Technologies, we’re different by design. Not only do we offer technology consulting services for critical decisions like these, we are experts on the cloud and on-premise and hybrid deployments and are partners with today’s leading communication technology providers. We’ll assess your network, map your capabilities and regulatory obligations against your budget to help you choose and deploy the model that best fits your goals and constraints.
The right choice of communications model is just the first step. Reach out to us today to make sure every step that follows is the right one, too.
