TCO: Calculating the Real Cost of Your Business Phone System (2017)

When assessing the future of your business communications, making the decision to stick with an on-premises phone system versus moving your communications to the cloud can be a complex process. Of course, the overall benefits of switching to a cloud phone system, let alone one simple integrated and unified communications solution, clearly outweigh the benefits of managing a legacy phone service along with all the individual vendors required to meet your communications demands. But, when it comes down it, a huge part of this decision revolves around cost.

For an on-premises phone system, the most obvious outlays are the ones you can see and touch— the PBX hardware and the phones that connect to it. At an average cost of $1,000 per employee, the PBX easily stands out as the big ticket item. However, once you begin to probe beneath the surface, you may be surprised to find that the hidden costs of an on-premises phone system are nontrivial, making your total cost of ownership (TCO) greater than you originally expected. In fact, the costs may total more than the large initial capital expense of the basic hardware.