The hidden costs of old PBX systems

Is your PBX making cash disappear? If your company is still using an on-prem PBX system, you're probably frustrated by high running costs, poor flexibility and a limited feature set. Yet, you might be reluctant to upgrade because it’s not yet reached the end of its costed lifespan.

But no matter what you do, you can’t get back the money you’ve already poured into your on-premises PBX. And for every day that you struggle on with it, it’s holding you back from realising your company’s full potential. As well as some very real hidden operating costs, there are major opportunity costs – in agility, innovation and overall competitiveness.

Here are seven benefits you will experience, by moving to a cloud-based PBX right now.


#1 Reduce overall network costs

On-premises PBXs can’t cope with peaks and troughs in demand. Because they rely on dedicated, physical network capacity, you have to build them to meet maximum demand. You might have a traffic peak that lasts for just two weeks but, with on-premises PBXs, will have to pay for it all year. With cloud-based PBX, you can pay for peaks in demand when they occur.

#2 Slash your call costs

Traditional PBXs rely on public switched telephone network (PSTN) lines, so tally calls up as minutes on a fixed capacity network. When you make too many calls, or large numbers of international calls, the costs will quickly ramp up. By contrast, IP PBXs are based on more flexible data packets on a network that’s virtually unlimited in size. Call costs can be dramatically reduced.

#3 Make maintenance and upgrades easy

On-premises PBX systems rely on the hardware and software that you locate on site. Increases in capacity – extra hard disk space or network capacity, for example – require dedicated new hardware. Plus, both hardware and software maintenance requires people to visit and work on site. With the cloud model, everything – virtually unlimited hardware and expertise – is based at the service provider’s facilities and available at much lower cost.

#4 Don’t pay a premium for everyday expertise

Moreover, as legacy PBXs get older, and as new features are added, they require increasingly expert – and expensive – people to support them. So maintenance and upgrade costs will increase as the feature set advances. That doesn’t happen with cloud. Everyone at the cloud service provider is located in the same place and working and learning together, even as the very latest capabilities are added.

#5 Gain access to new features faster

Adding new features and functionality to an on-premises PBX is costly, yes. But it’s also very difficult from a practical viewpoint. As well as working within hardware limitations, the installation of new features is time-consuming and often requires user training – and possibly new devices. That all costs money. With cloud-based PBX services, you can access the very latest features as soon as they’re available. They’re installed centrally by the cloud service provider. They appear effortlessly as intuitive tools that you can start using immediately, and you can learn how with self-service training.

#6 Start with a far richer feature set 

Traditional, on-premises phone systems don’t include features like video calling, web meetings, team messaging, and more. In today’s world, these are mandatory capabilities – really nothing special – and available as part of any cloud PBX system.

#7 Avoid all the traps of hardware ownership

On-premises PBXs, as opposed to modern cloud pbx systems, require you to pay money upfront for hardware, which will depreciate and become obsolete over time. Indeed, they’re relatively expensive pieces of equipment, and typically have a lifespan of just seven years.

Plus, if you want redundancy – to protect against disasters like fire and electrical failure – those costs will be multiplied.

That means you’re tying up large sums of capital that might otherwise be spent on IT innovation, and you’re also tying yourself to an inflexible mindset for the lifetime of the equipment. Seven years is a long time in today’s fast-moving world.

Moreover, if you need to quickly ramp up your user base, due to rapid business expansion, for example, you will need yet further fixed hardware. And your call costs may also spiral upwards.


Read about how some of our customers have experienced the transition from on-prem PBX systems to Cloud PBX.


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