Every business phone system needs a PBX — the switchboard that routes calls to the right people. The real question is where it runs and who looks after it. An on-premise PBX lives in your building (or on your own server) and your team runs it. A cloud PBX lives in a data centre and a provider runs it. The features can be identical; the work and the money are not.
The short version
| Cloud PBX | On-premise PBX | |
|---|---|---|
| Upfront cost | Little or none | Hardware or server, licences, installation |
| Ongoing cost | Per user, monthly or yearly | Maintenance, support contracts, your own time |
| Updates and security fixes | Applied by the provider | Applied by you or your IT partner |
| Adding users | Change a number | May need more licences or hardware |
| Remote work | Built in | Possible, but you set up the remote access |
| Depends on | Your internet connection | Your building, power and hardware |
Cost: upfront vs subscription
An on-premise PBX is a purchase: an appliance or a server, software licences, often installation by a partner, plus phones. After that, you pay for maintenance and for whoever keeps it running — even if that's "someone in the office who knows the password".
A cloud PBX turns that into a subscription per user. You don't buy hardware, and you don't pay for capacity you might need in five years. The flip side: you pay every month for as long as you use it. If you're comparing the two over several years, include the costs that don't appear on an invoice — staff time, hardware replacement, the support call when something breaks on a Friday.
Who keeps it running
This is the difference people underestimate. A PBX is software, and software needs updates — new features, bug fixes and, above all, security fixes. PBXs reachable from the internet are a favourite target for toll fraud: attackers who get in can place expensive international calls at your cost.
- On-premise: you (or your IT partner) watch for updates, schedule them, take backups and check the system is healthy.
- Cloud: the provider does that. You still own your configuration — users, call routing, passwords — but not the servers underneath.
If nobody on your team wants that job, the cloud removes it.
Remote work and multiple sites
A cloud PBX is reachable from anywhere by design. Someone working from home signs in to the app or plugs in a desk phone, and it works like in the office. A second site is just more people on the same system.
An on-premise PBX can do all of this too, but you have to make it reachable from outside — firewall rules, VPNs or a remote-access service — and keep that secure. For a team that is often away from the office, that work adds up. More on this in a phone system for remote and hybrid work.
Call quality and the internet
Both kinds of PBX today usually connect to the phone network over the internet through a SIP trunk. The difference is where your phones talk to the PBX: over your office network (on-premise) or over the internet (cloud).
For a cloud PBX that means:
- a stable connection with enough upload bandwidth for the calls you make at the same time;
- a router that handles voice traffic well — and doesn't interfere with it;
- a plan for when the line is down, such as sending calls to mobiles.
On a good business connection, this isn't a problem. On an unreliable one, fix the connection first — whichever PBX you choose.
When on-premise still makes sense
On-premise is the better fit when:
- rules or contracts require all telephony equipment to sit in your own building;
- your site has poor or unreliable internet that you can't improve;
- you have in-house staff who already run servers and want full control;
- you have special hardware — door phones, paging, analogue lines — that must connect locally (though many of these work with a cloud PBX through gateways).
For most small and mid-sized companies, none of these apply, and the cloud is the simpler choice.
Switching from on-premise to cloud
Moving is less work than it sounds. Your phone numbers belong to your phone line or SIP trunk provider, not to the PBX, so they can move with you. A typical plan: set up the cloud PBX next to the old one, recreate users and call routing, test with a temporary number, then point your trunk or port your numbers to switch over. Leaving 3CX? Crane recreates your setup on Yeastar from a 3CX backup.
On PBXfactory
PBXfactory sells Yeastar P-Series Cloud on its Enterprise plan as a hosted cloud PBX. We run it on our cloud, apply Yeastar's firmware and security updates (routine ones in announced maintenance windows, urgent security fixes sooner) and monitor that it's running. You configure it and connect your own SIP trunk. It's €4.99 per seat per month or €54.99 per seat per year, minimum 2 seats, prices excluding VAT — with a 3-day free trial for your company's first PBX, up to 10 seats. See pricing.