The Key Differences Between UCaaS & Onsite Phone Systems

by Doug KramerMarch 27, 2019

There are vast differences between business communications platforms today compared to just a few years ago thanks to technology, the internet, and the cloud.  Before diving into these differences, it helps to first provide a little historical context.

Traditionally, business phone systems required onsite equipment and connection through a local phone provider. The hardware was expensive to purchase and additional features required additional equipment. Maintenance was also required from time-to-time to keep the phone system up-to-date and running.  As a company grew and needed new phone lines, additional equipment needed to be purchased. There were not many choices for the service, and the competition was also limited.

With new innovations and technology, including the internet and the cloud, business phone service has changed dramatically in just the last few years. Today, there are hosted cloud-based Unified Communications as a Service (UCaaS) options with minimal onsite equipment because the provider manages your communications system remotely and handles all maintenance.  Upgrades are also performed by the provider and such upgraded features are included with existing service without having to add new equipment or even upgrade to a new plan. Adding users is easy and requires no additional onsite phone system equipment.  All of this frees up IT staff to focus on other projects, priorities, and systems.

Below is a full comparison of Onsite Phone Systems vs. UCaaS:

Onsite vs. UCaas Comparison: 


Onsite Phone System


Upfront costs

Onsite solutions require high upfront costs in the form of capital (CAPEX) outlays for onsite switching equipment.  This equipment must be stored, maintained, upgraded, and replaced from time-to-time.

Much lower cost of ownership that typically involves purchasing phones that will work with the UC solution.  The switching equipment is hosted by your provider which also handles storage, maintenance, and upgrades on your behalf.

Advantage:  UCaaS due to lower upfront costs.

Ongoing Maintenance

You are responsible for the expense related to ongoing maintenance cost. There are typically yearly maintenance fees plus you have to pay for a qualified phone technician to make any changes including moving a user to a different location.

Maintenance is the responsibility of your UCaaS service provider. There are no maintenance costs for you. Simple changes can be handled via an online web portal or by contacting the provider’s support team.

Advantage:  UCaaS due to no maintenance costs and ease of making simple changes.  

Flexibility & Scalability

Onsite systems require purchasing equipment upfront designed for maximum capacity. In other words, you’re paying for what you don’t necessarily need right now. If you don’t account for maximum equipment upfront, you will find you have to purchase additional equipment as you grow only adding to your capital expenses.

Cloud-based UCaaS providers let you scale as quickly and easily as you need to make changes. There are no system capacity issues. The costs to scale are low; purchasing additional desk phones (if needed) and purchasing a monthly service plan. You also only pay for active users so you can remove users as well for seasonality if needed.

Advantage:  UCaaS due to flexibility to scale up or down without capacity issues.


Support and service are typically handled by your onsite I.T. staff and/or outsourced to a phone system technician who will charge to provide maintenance, upgrades, and other changes.

Support and service are typically included as a part of your monthly service.  Your UCaaS provider should have support staff dedicated to making changes you need or fixing any issues.

Advantage:  UCaaS due to support being included with the service for no additional charge.  

System upgrades

Similar to maintenance, any upgrades would be your responsibility with one-time out-of-pocket costs for purchasing the upgraded equipment as well as installation costs.

Similar to maintenance, any upgrades would be handled seamlessly by your service provider. Most upgraded features are included with the existing service without having to change or upgrade your plan.

Advantage:  UCaaS due to upgrades included with service.  

Advanced Features

Features for your phone system are typically limited to your desk phone.  There might be a few UC features available such as Voicemail-to-Email. Any new features would require purchasing additional equipment.

Your phone system extends beyond your desk phone with UC functionality through a web portal and mobile app that allow you to make calls, check voicemail, view call history including missed calls, and more through your computer and mobile device.

Advantage:  UCaaS due to features that support real-time information, flexibility,

and mobility to support remote & field teams.

Upgrades & New Features

The equipment you purchase will have a limited set of features available.  Adding new features or new features for additional users would require updating equipment which means additional one-time phone system costs, set-up costs, and purchasing new equipment.

New features will often be developed and released as part of your current service.  Most new features will be UC features available through a web portal and mobile app.  Depending on the provider, most new features will be included with your current service.

Advantage:  UCaaS due to new features and upgrades included with your service compared to

additional equipment and upgrade costs for Onsite Phone systems.  

Bottom line:  As you can see, there are many advantages of UCaaS compared to a traditional onsite system.  An Onsite Phone system still might make sense for some large enterprise companies who have already made extensive outlays in onsite infrastructure and organization that have a large in-house IT staff to keep up with ongoing system upgrades and maintenance.

About Level365:

Level365 offers a complete Unified Communications as a Service (UCaaS) solution with enterprise voice that is customizable and scalable for your business. Our service seamlessly integrates communication among desk phones, computers, and mobile devices to support remote teams and provide flexibility for on-campus staff. The UC platform extends beyond voice communications with Unified Messaging, Analytics, Presence, Chat/SMS, Cloud Faxing, Business System Integration and more.