In short: A hosted vs on-premise phone system decision is about who runs the PBX. Hosted puts it in a provider's data centre for an ongoing fee, with patching, updates and resilience handled for you. On-premise keeps a PBX on your site, with more up-front cost and in-house responsibility, but suits existing investments, specific integrations and local survivability.
What the two models mean
A phone system, or PBX, decides where calls go: extensions, groups, menus, voicemail and the connection to the phone network.
- Hosted (cloud). The PBX runs in a provider's data centre. You use desk phones, apps and softphones over your internet connection, and the provider looks after the platform. See hosted PBX for how that works in practice.
- On-premise. The PBX runs on hardware or a server in your building, or in a server room you control. Calls reach the phone network through SIP trunks or, until the switch-off, ISDN and analogue lines.
Both can deliver the same everyday features. The differences are in cost profile, responsibility and resilience.
Side-by-side comparison
| Hosted / cloud | On-premise PBX | |
|---|---|---|
| Cost profile | Mostly ongoing: per-user or per-system subscription, with little up front | More up front (hardware or server, licences, installation), then maintenance and support |
| Maintenance and patching | The provider updates and patches the platform | You or your maintainer apply updates, patches and hardware fixes |
| Security responsibility | Shared: the provider secures the platform, you secure devices, accounts and your network | Yours: the PBX, its operating system, remote access and firewall rules |
| Resilience and disaster recovery | Runs off site, so calls can divert to mobiles or another site if an office goes offline | Needs a second system, failover licence or divert plan to survive a site outage |
| Remote working | Apps work anywhere with an internet connection | Possible, but needs secure remote access to the on-site PBX |
| Scaling | Add or remove users as you change | Limited by hardware, licence size and ports; growth can mean upgrades |
| Feature updates | Arrive as the provider releases them | Arrive when you upgrade, which may need new hardware or licences |
| Contract and lifecycle | Fixed-term service contracts | Asset owned for its lifespan, then replaced |
| Local survivability | Depends on your internet connection | Internal calls can carry on if the internet fails |
Pricing for either model is 'ask us for a quote'. Our cloud phone system cost guide explains what to include in a fair comparison.
When on-premise still makes sense
Hosted is not automatically right. Keeping or buying an on-premise system can be the sensible choice when:
- You have a recent, supported PBX. Replacing working, paid-for equipment early may not pay back. Moving its lines to SIP trunks keeps it working past the 31 January 2027 PSTN and ISDN switch-off.
- You rely on specific integrations. Some door entry, paging, nurse-call, alarm or line-of-business systems connect directly to an on-site PBX.
- Internal calls must survive an internet outage. Sites that need local survivability, such as large campuses or remote locations, may want calling that does not depend on the internet.
- You have the skills in house. Organisations with their own telecoms or IT team may prefer full control.
If your PBX is near the end of support, or you are paying to maintain hardware you rarely change, a hosted system is often simpler. For older lines, our ISDN replacement options and PSTN switch-off checklist pages set out the routes.
3CX can run either way
3CX is unusual because the same phone system runs in several ways. According to 3CX, you can use it:
- Hosted by 3CX, where 3CX runs the system for a separate annual hosting charge (included with SMB Free)
- Self-hosted in your own cloud account, on Amazon, Azure, Google or DigitalOcean
- On-premise, on Windows or Linux on your own hardware
The licence is the same annual, per-system licence by edition and simultaneous calls, so you can start on-premise and move to the cloud later, or the other way round. We can also host and manage it for you as hosted 3CX. For resilience, 3CX lists built-in failover and a standby licence on its AI edition at 16 simultaneous calls and above.
Questions to ask before you decide
- How old is your current PBX, and when does vendor support end?
- Which devices or systems connect to it directly (door entry, alarms, paging, faxes)?
- How many people work remotely or across several sites?
- What happens to calls today if your office loses power or internet?
- Who patches and secures the system now, and how often?
- How do your costs compare over the full term, including maintenance and upgrades?
Our business phone systems buyer's guide covers the wider choice, including Microsoft Teams Phone.
How we help
We supply both routes: hosted platforms including Forever UC, hosted 3CX, Webex Calling and Microsoft Teams Phone, and SIP trunks for PBXs you keep. We audit what you have, check your connectivity and resilience, and give you a straight recommendation.
Contact us to compare hosted and on-premise for your sites.
Why choose your cloud phone system with Forever Systems
We are vendor-neutral. Forever Group supplies and supports several cloud phone platforms, so we recommend the one that fits how your organisation works rather than the one we happen to sell.
- Side-by-side comparison of hosted 3CX, Microsoft Teams Phone, Forever UC, Forever Teams and Webex Calling for your users
- Contact centre and call recording options matched to your call volumes and CRM
- Number porting, handsets and set-up handled for you, including the move off analogue and ISDN lines
- Connectivity checked so call quality is right from day one
- UK support for moves, adds, changes and faults
- For BT Cloud Voice, see our BT Business Partner site cloudvoice.cloud
We work with businesses, schools, charities and public sector organisations. We do not sell consumer phone services.
Want a vendor-neutral cloud phone system comparison and quote?
Tell Forever Systems what you need and we will come back to you by email with options, not a hard sell.
Contact usFrequently asked questions
Is a hosted phone system better than on-premise?
Not in every case. Hosted suits most organisations because the provider handles maintenance, patching and resilience, and apps work anywhere. On-premise can suit organisations with a recent PBX, specific on-site integrations or a need for internal calls to work without the internet.
Is a hosted phone system cheaper than on-premise?
The cost profile is different rather than always lower. Hosted is mostly an ongoing subscription; on-premise is more up front, then maintenance. Compare the full term, including support, upgrades and lines. Ask us for a quote on both.
Can I keep my on-premise phone system after the PSTN switch-off?
Often, yes. If your PBX supports SIP, or can be fitted with a gateway, you can move its lines to SIP trunks and keep using it after the 31 January 2027 switch-off.
What happens to a hosted phone system if the internet goes down?
Calls can be diverted automatically to mobiles, another site or voicemail, and users can carry on from mobile apps over mobile data. A backup connection at the office adds further resilience.
Can 3CX be installed on-premise?
Yes. 3CX runs on-premise on Windows or Linux, self-hosted in your own cloud account, or hosted by 3CX, under the same annual licence.