Multisite Phone Systems – Premise vs Cloud

When a business has multiple locations, there are a number of ways to make all the sites connect. Here’s the options and how they stack up:

  1. Cloud PBX – a phone system in the cloud provided as a service (SAAS)
  2. Central IP Phone System – a IP phone system centrally located, servicing all locations
  3. Distributed IP Phone System – a phone system at each site, linked to each other to act as one big system

Up Front Costs

With any phone system you’ll need to buy, lease, or rent handsets and likely PoE switches – we’ll consider that a wash for each option. Cloud PBX has the advantage of not needing to buy anything else generally. A central IP system will have a moderate up front cost either leased or bought, assume $50-200 per station. A distributed IP system will be the most expensive as you’ll need to buy a PBX at each site, plus licensing for multisite linking. First place for up front cost goes to Cloud PBX, second place to the Central IP system.

Monthly Costs

Cloud PBX generally costs per extension per month, this model can be amazingly cost effective for sites with low handset counts but quite expensive for sites with many handsets – say you have 100 seats you could be looking $2000-4000/mo. For the central IP phone system you’ll just need a PRI or SIP trunks which is 911 enabled for multisite – a typical business with 100 phones would have a bill $500-1000/mo. The distributed IP PBX can also be quite expensive as you’ll need to buy lines at each site – often expensive POTS lines and extra capacity at each site which can be very inefficient from a line utilization standpoint. First place for monthly cost goes to Central IP phone system, second place could favor either Cloud PBX or distributed IP phone system.


Cloud PBX may or may not be redundant – you’ll need to ask each provider if they have redundant switches, geo-redundancy, etc. With a the central IP phone system you also may or may not be redundant – some systems can do redundancy, geo-redundancy, etc. Distributed IP phone system will of course have the best redundancy since each site can operate independently. First place for redundancy goes to distributed IP phone system, second place cloud favor either Cloud PBX or central IP phone system.


Cloud PBX and the Central IP phone system will have a single interface for management, the only practical difference is you’ll have a few boxes to maintain with the Central IP phone system. The distributed IP phone system option will often but not always require each site to be managed separately plus you’ll have hardware at each site to maintain. First place for manageability goes to Cloud PBX, second place to Central IP phone system.

Network Design

Its worth note whenever you’re dealing VoIP, be it cloud or premise, the wide area network design is crucial. With any of these products my preference is a MPLS network, MPLS is a carrier service providing site to site connectivity with quality of service controls. Using IPSEC VPN to create a network for voice is generally a bad idea due to packetization overhead. SSL VPN can actually work well especially when the SSL VPN converts the UDP SIP traffic to TCP. However many IP phone systems will not require a VPN at all. Regardless if you’re not doing MPLS you’ll need to ensure you have ample high quality bandwidth at each site and firewalls capable of prioritizing VoIP.

Bottom Line

So what’s the right solution for your multisite business? Really the answer is all of these are good options, which is right for your business will depend on your size, sites, and priorities.