A Comparison of In-House Exchange v. Hosted Exchange












In the days before the internet, the term “exchange” meant a telephone exchange. Now it has expanded to include the email server and infrastructure businesses need to communicate internally and with the outside world. Traditionally, this hardware was installed and managed in-house, but this is no longer the case as Voice over IP (VoIP) can be hosted on a virtual exchange that’s cheaper, secure and flexible.

What Is an Exchange?

A conventional telephone exchange has a big cabinet. This houses the circuits used to operate internal and external telephone circuits hardwired to employee’s phones. A separate infrastructure is used to connect employee’s computers to the main and email servers. Emails, which legally have to be indefinitely retained, have to be stored on hard drives controlled by email management software.

VoIP phones differ in that they operate over the internet and form part of the computer infrastructure. Instead of separate exchanges, the email server and telephone exchange are combined into one unit.

In-House or Hosted

An in-house solution is one that is physically on your site. It’s controlled and maintained by IT staff or an outside contractor. The exchange equipment is owned or leased from a supplier, and you are primarily responsible for its successful operation. In-house solutions may use a separate network for phones and computers or a combined internet-compatible VoIP solution.

Hosted exchanges are quite different. They are off-site and are virtual exchanges hosted in the cloud and managed by your service provider. All you need is an internal internet connection to each VoIP phone and computer. It’s important to note hosted solutions are incompatible with old-fashioned hardwired phones.

Comparison Between Hosted and In-House

Hosted exchanges have several benefits over in-house solutions, especially for small and medium-size businesses. These are as follows:

  • Cost: Hosted solutions are paid for by a monthly subscription, whereas the hardware and software needed to operate an in-house exchange must be internally financed. Overall, hosted solutions are usually cheaper.
  • Installation: Installation of a hosted solution can take a matter of hours or at most a few days compared to weeks or months to purchase and install on-premise exchanges.
  • Email storage: Hosted exchanges in the cloud offer almost unlimited storage, while in-house exchange servers have to be continuously upgraded as files grow.
  • Maintenance: The cloud service provider is responsible for all software and hardware maintenance, whereas customers are responsible for maintenance of in-house exchanges.
  • Upgrading: Upgrading in-house solutions are expensive and tricky, but cloud exchanges can be seamlessly upgraded with no interruption of service.
  • Disaster recovery: Cloud vendors offer sophisticated disaster recovery solutions.

Replace the Old With the New

The need for conventional telephone exchanges and in-house email servers has all but disappeared thanks to the availability of high-speed internet connections. A hosted exchange offers numerous advantages over in-house and is almost always at a lower annual cost. Additionally, hosted solutions work better, offer the latest technology and customers don’t have to worry about upgrading outdated solutions. It makes sense to switch to a hosted exchange. To discover how a VoIP exchange can revolutionize your business, contact us.We can show you how to use the many benefits of a hosted exchange solution.