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Is Moving to the Cloud Really Cheaper than a PBX?

is moving to cloud cheaper than a pbx


Although we all now reside in an always-online digital world, phone systems remain the primary communication method between employees, customers, and partners. A reliable phone system, whether it be a traditional PBX or cloud solution, it can still be the difference between the success and failure of your business.

However, the on-premises system has fallen out of favor over the years, and new cloud providers warn that the old way of doing things comes with hidden integrated costs.  Downtime and inability to scale in a digital age are just a few weak spots that providers typically target.

Value, Costs, and Planning Should Always Be Considered Together

The sales pitch that follows will promise to cut costs by over 50%, and predictably will trigger an emotional reaction rather than data-driven and informed decisions.

The reality is many big providers will tell new clients what they want to hear to get them to migrate from their on-prem PBX to a cloud solution. Without adequate planning, this particular digital transformation story could leave you with the dreaded cloud hangover.

There is no such thing as a one-size-fits-all and a fact discovery combined with meticulous planning and budgeting will help you determine the best solution for you and your business.

The good news is that the cloud offers greater network reliability and an option to port over your existing numbers without disrupting your entire business. Scaling your business and adding new phones is as simple as adding another low monthly subscription fee to your account.

But here are a few things you need to be aware of before diving in headfirst.

A Cloud-based Phone Service is Very Different in Cost Structure than a PBX

Cloud phone service costs can vary dramatically.

Businesses can expect to pay anything between $10 and $50 per line depending on the features and scale that you need. A question you have probably not asked your teams is how many handsets do you need? And how many calls do you want the ability to make simultaneously?

On the surface, migrating to the cloud involves determining what licenses, services, and possible storage you need. But many seldom think about the costs around IP addresses, domain resilience, and data transfers.  A mouth-watering $20 a month per user will initially sound like a great deal. But it’s the fine print that could catch you out. 

For example, an innocuous nominal monthly “recovery fee” of 5% of billing could add $1 per user per month, which sounds reasonable. But if you zoom out and multiply that by the length of a 36-month contract and 200 users and you could end up paying an additional $7,200. Many cloud products come with hidden charges like this, so don’t be afraid to do your research and ask the right questions.

Ensuring your legal team provides additional clarification on the terms and conditions of your contract could also save you both time and money in the long run. 

If you don’t have a legal team, no worries because when enlisting Converged Technology Professionals as your RingCentral partner, we work with one of the largest national legal teams to review your contracts.

Where are the Cost Savings? 

If you can identify and remove any hidden charges mentioned above, it is very possible to make significant savings by migrating your PBX to the cloud. Mostly because you are moving away from rigid pricing methods and towards a fairer pricing structure where you only pay for the services you need and use.

These are just a few reasons why you must understand precisely what you need before committing to anything. 

It also becomes much easier to scale up or down based on your unique seasonal requirements. By removing the additional costs associated with expansions and adding new agents, it also becomes much easier to scale your support, hardware or gear requirements, and maintenance.

There may or may not be costs for your initial installation, however work with your partner to see what can be done about these and what it exactly involves.  Free calls between offices also deliver efficient and productive communication for free, which is a giant leap forward in terms of progress. But once again, careful planning and analysis of your core infrastructure should not be underestimated.

If you choose to move forward with a pbx to cloud migration, make sure to request a copy of our Migration Guide Checklist and Ebook to help with your planning.


Collaboration and Flexibility Offer Value Too

When searching for cost savings and ROI, financial benefits shouldn’t be the only focus or primary motivator for moving to the cloud. If you zoom out to look at the bigger picture, where does your contact center need to be to serve the rising expectations of your increasingly mobile workforce and the all-important customer experience that you deliver?

A cloud-based cohesive, unified solution that is designed to enhance the customer experience and increase agent efficiency is not just a pipe dream, it is becoming the standard for contact centers.

Multiple channels such as SMS, webchat, email, phone, and even fax can all be managed under one roof. Do not underestimate the value of providing your agents and managers with a 360-degree view of all interactions across a myriad of communications channels.

Cloud technology has removed geographic restrictions and infrastructure limitations. In doing so, it has never been easier to unify all your employees and offices in a single system with an integrated communications ecosystem built on your requirements. However, determining which cloud PBX provider is best suited to your business is not so easy.

The world of communications technology is complex, and the best cloud PBX system for one company will not be fit for purpose for another. Every business leader reading this will have a different set of expectations from their technology partner to achieve their objectives around cost savings, flexibility, and scalability. 

The bottom-line is don’t get distracted by the sales patter, shiny technology, and low prices in a generic sales pitch. Good old-fashioned planning and budgeting will enable you to make informed decisions that will help you thrive and survive in a digital age.

If you would like more information about how Converged Technology Professionals can help you plan and transition your communications to the cloud, please contact us and we’ll be glad to discuss your situation and goals.  

If you’ve enjoyed this article, you may also like:

PBX to a Cloud Solution - be Prepared with our Migration Checklist

How Phone Manufacturers are Forcing the Move to Cloud


is moving to cloud cheaper than a pbx LI


Converged Technology Professionals is a RingCentral Premier Partner and a Mitel Platinum Partner experienced in helping businesses migrate their phone and communications to the cloud.   Converged has offices in Milwaukee, Crystal Lake, Illinois, Indianapolis, and the Grand Rapids area.

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