Real Time Communications Featured Article

Old School On-Premises PBX Systems No Longer a Practical Capital Expenditure

July 09, 2015

There once was a time in the technology world when purchasing equipment and software was a no-brainer. Capital expenditures were a solid investment, one that would reap many years of benefits, support and dependable performance in return.

Like a reliable 1950s Kenmore kitchen appliance, those days of longevity and return on investment are long gone. Today’s appliances are built to be thrown on the trash heap and replaced after a few years of service, and technology investments are rapidly following suit. Businesses of all sizes are now faced with a major decision when it comes to investing in communications technologies, and there are a number of peripheral considerations as well.

It used to be a given that businesses of a certain size required on-premises PBX appliances, or entire closets, to power their telecom needs. Administrators were needed to manage and maintain these systems, but they were dependable and ensured basic call holding, forwarding and transfer functionality. The advent of IP-based and cloud communications has changed the game in a major way, however, and even large enterprises are questioning the feasibility of making major capital investments in on-premises systems that might be rendered obsolete within a few years.

A much better bet, for any size organization, is to budget for a regular, operational expenditure – renting, instead of buying, so to speak. Purchasing managed and cloud-based communications services enables this type of budget management, and eliminates the need for an on-premises specialist or administrator to manage equipment and systems. Communications services come with support and management from the service provider, as well as service level agreements (SLAs) to back it up.


Businesses also benefit from a broad range of communications and collaboration functionality that may be implemented relatively quickly and which are intuitive and easy to use from an employee perspective. Additionally, these types of systems support mobility and BYOD, critical elements for today’s disparate and remote workforce. Branch and remote offices are easily brought online, and organizations have the option of scaling up or down easily to meet fluctuating or seasonal workforce needs.

Of course there are cases where some type of on-premises equipment and software is necessary and even advantageous. Many companies are therefore embracing a hybrid blend of on premises and cloud-based services to meet their communication needs as well as their budget planning and expectation. Whatever type of solution they end up choosing, the days of the out-of-the-box, one-size-fits-all, on-premises PBX solution are going the way of the vintage Frigidaire as organizations opt for the latest and greatest in features without the need for a giant capital expenditure.

Edited by Stefania Viscusi

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