On-premise IP PBX, cloud PBX or Teams Phone: which fits which company

Anyone replacing a phone system today has three options: an on-premise IP PBX, a hosted system at a provider (cloud PBX), or telephony directly in Microsoft Teams. All three are VoIP, incidentally — voice runs over the data network in every case. The difference is not the technology but who operates the system.

The three options at a glance

The difference is where the system sits and who operates it.

• On-premise IP PBX: you buy the hardware, it sits in your server room, you control everything — and you handle maintenance, updates and resilience.
• Hosted (cloud PBX): the system runs at the provider, you rent the function. Purchase and maintenance contract are replaced by subscription, service agreement and your own duties to cooperate. Endpoints, network and possibly a device for analogue special cases stay on site.
• Telephony in Microsoft Teams: no separate system at all. It requires a Teams Phone entitlement and a chosen route to the telephone network — a Microsoft 365 licence alone is not enough.

We cover the first two on our page about VoIP and cloud PBX, the third on the page about Teams telephony.

When is an on-premise system worth it?

When specific requirements argue against handing telephony over. In practice these are few but clear: production environments with special hardware, sites with unreliable internet, or requirements that mandate local data storage.

The price is responsibility. An on-premise system has to be maintained, updated and repaired when it fails — with everything that implies in terms of standby and spare parts.

When is a hosted system the right choice?

When telephony should simply work without becoming a project, and Microsoft 365 plays no part in your organisation. A hosted system is the unexciting solution: predictable monthly cost, no hardware, no maintenance contract.

It is also the obvious choice when several sites need connecting or when headcount fluctuates — extensions can be added and cancelled without anyone touching a device.

When is Teams the better answer?

When Microsoft 365 is your working environment anyway. You then avoid a second system with its own administration, user accounts and contract — though telephony still needs its own entitlement and a connection to the telephone network; it is not included in the licence.

The practical difference shows in daily use: a call can be extended into a meeting, presence follows the calendar and call handling can follow that status by rule, and people working from home are reachable on the same number as in the office.

The four questions that decide it

They can be answered in one conversation and replace most of a comparison document.

• Do you already use Microsoft 365 across the organisation? If so, much speaks for Teams.
• How many staff work mobile or from home? The more, the less a system tied to one location makes sense.
• Do special functions hang off telephony — fax, door intercom, production equipment, call recording, contact centre features? That list can well determine the option, not just the effort.
• How reliable is your internet connection, and is there a second route? Without a solid line, any cloud solution is a gamble — and the question of how an emergency call is placed during an outage needs an explicit answer.

Safety-critical lines sit outside this decision: lift emergency calls and fire alarm systems are governed by their own rules, need a connection that holds during power and internet outages, and are signed off by the relevant specialist firm — not decided in a telephony project.

What stays the same either way

Three things are independent of the option. First: existing numbers can usually be taken over — after checking ownership, contracts and number blocks. Second: the switch runs in parallel with the existing system and is reversible up to the porting date, after that only by porting again. Third: the network check belongs at the beginning — voice makes network weaknesses audible first.

We have described how such a migration works step by step in a separate article: From the old phone system to Microsoft Teams.

How do we start?

With an inventory, and it is shorter than most expect: which numbers exist, what hangs off them, what the internet connection looks like. The right option usually follows from that on its own.

We do this for companies in Singen and within roughly 100 kilometres — from Villingen via Konstanz into Switzerland. Talk to us if you would like to know what suits your organisation.