We consistently find that customers can substantially reduce upfront investment in hardware and installation as well as ongoing monthly operating expenses.


Our analysis here is for a typical 16 extension system for a branch office. 


In summary, in the first year cash outflow is reduced by approximately 65%, with the total savings over a five year period of 40%.  This does not take into account the cost of capital.

  1. We have used real customer quotes for the cost of the onsite hardware and installation, software licences and training.
  2. For the phones, proprietary phones are required for most onsite systems.  Our analysis uses mid-range phones in both cases.  For the hosted solution, we have uased the Grandstream GXP2130
  3. In both cases, some network upgrade will probably be necessary.  We have included the cost of a 24 port POE switch and a router in both scenarios.  Some rewiring of the network drops to desks may be necessary, but would be similar in both cases.
  4. For the monthly operating costs. we have assumed that only 6 traditional Bell lines would be necessary to support 16 extensions with an on-site PBX.  In many cases, this is on the low side.  For the hosted PBX solution, there is no limit to the number of simultaneous calls.
  5. Monthly maintenance is based on 12% of initial hardware and licences.  Often we see that this is up to 15% per year.  for the hosted solution, full support including any programming changes is included in the monthly charge.

The initial investment required for a hosted solution is only 16% of the on-site installation preserving capital.  Monthly expenses are 17% lower on an ongoing basis


Taking a five year view, savings in the first year would be 65%, and over a five year period would be 40%.