Work from Home Series: Hosted VOIP Phone vs. In-House Solution

In Technology by Matsco Engineering Team

Just like keyboards and computers took over from typewriters, conventional landlines are no match for Voice over Internet Protocol (VoIP) phone solutions for modern businesses. While VoIP phone solution are the new norm, deciding to host your VoIP phone with a third-party vendor or in-house depends on your business, and the features you require.

Hosted VoIP Phones

Hosted VoIP phones are generally complete phone services from a third-party provider that’s delivered over the internet. With a hosted VoIP system, a master unit that connects all your office phones is located in your provider’s datacenter, allowing employees to remotely connect to it over the internet.

As the need to work from home increases, so does the importance of a phone system that employees can access remotely. The following outlines the pros and con of the Hosted VoIP solution.


  • Lower setup and maintenance costs
  • Reduced risks and complexities since the VoIP vendor manages the system and delivers the service
  • High portability and easily accessible as many VoIP providers allow access to your VoIP phone via internet browser or mobile app
  • Budget-friendly, easy, and quick implementation
  • Scalable
  • Highly suitable for businesses with team members working from home


  • Your service provider may have actual control of the VoIP system
  • VoIP requires reliable internet connection
  • Calling an emergency number (e.g. 911 in the US) from a VoIP line will only transmit limited location data and you’ll need to provide your location for first responders
  • VoIP is not a guarantee that your phone expenses will decrease dramatically since the needs of businesses differ

In-House Phone Solutions

An on-premise VoIP solution is typically hosted and maintained with the office. The master unit, and all the employee extensions are located in the same office, making remote access or multiple locations more complex.


  • No risk of an increase in fees
  • Complete control and flexibility with the VoIP system
  • An on-premise VoIP phone system will allow you to develop an understanding of its capabilities since you / your IT partner would handle the deployment


  • Potentially higher ongoing costs (specifically when scalability is considered)
  • It can be complex to manage and may require on-premise IT expertise
  • Implementation may take longer
  • Making customizations or adding new features can be relatively expensive
  • Less reliable for team members working remotely

Key Differences Between Hosted VoIP Phones and In-House Phones

The Total Cost of Ownership

In terms of the overall cost of ownership, while an in-house phone solution is based on CAPEX cost structure, moving to a hosted VoIP phone service will change this to OPEX. Consequently, you can expect a higher initial cost when setting up an on-premise VoIP solution.


A hosted VoIP solution is easier and more cost-effective to scale. Whether it’s as a result of business growth or in response to unforeseen events like the Coronavirus pandemic where many employees have had to work from home, a hosted VoIP solution is by far easier to activate across several different locations. Some VoIP service providers also allow you to add or remove users in line with changing business needs.


Hosted VoIP service providers level the playing field between large and small enterprises by providing access to rich features that were once inaccessible to small businesses. With a cloud-based VoIP service, features such as voicemail to email transcription and customized music on hold can be easily activated or deactivated from a secure portal.

Ease of Use

With more workers than ever now adopting remote work globally, it’s important to ensure that your VoIP system is easy to use even with minimal training or support. With a hosted VoIP solution, you can usually expect a user-friendly mobile and web portal as well as apps that allow you to make changes remotely. Although some of these may be available with an in-house phone solution, some are typically characterized by complexities in usage.

Overall Reliability

Since hosted VoIP is cloud-based, it usually has built-in redundancy in the provider’s data center with multiple backups in place. You can also enjoy better uptime levels with a hosted phone system since the service can easily be redirected to your voicemail or alternative cellphones in the event of any user-related issues. This level of reliability may be difficult to match with an on-premise VoIP system.

The Bottom Line

Whether it’s for their ability to seamlessly help you adapt to remote working or for their call management features, VoIP solutions have become essential in today’s business world. If you’re having to manage team members working from different locations due to the Coronavirus pandemic or other business changes, a hosted VoIP system can help you ensure that you not only save money in these times but also boost productivity.

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