Do You Know the True Cost of your Communications?


There’s more to calculating the total cost of ownership for communications systems than you might think. Here’s what you need to know and how UCaaS can drive your communications Total Cost of Ownership (TCO) down.

Most companies already know that the benefits of moving to an agile and scalable cloud-based communication system far outweigh the advantages of a legacy phone service. However, it can be difficult to determine whether the TCO for your cloud-based solution can match your expectations for an on-premise legacy system.

For on-premise solutions, common outlays come in the form of things you can physically see and touch – like the PBX hardware you purchase. However, there may also be additional expenses hidden beneath the surface of an on-premise offering that today’s companies are failing to consider.

The True Costs of an On-Premise PBX

True cost on premise pbx

TCO of an on-premise PBX system goes beyond the initial expense of hardware.

Businesses nervous about moving to the cloud often suggest that budget is a major reason for their decision. However, the truth is that the cost of a PBX system actually goes beyond the initial expense of hardware. In-depth cost roll-up analyses reveal costs like:

  • Upgrades, maintenance, and training for PBX systems: Expenses from license fees, installations, network upgrades, and additional extras can quickly add up to a significant extra expense. What’s more, as legacy systems add new functionality, they require more highly-trained support personnel to maintain software and hardware and roll out regular system upgrades.
  • Telecom costs: Legacy systems require bonded T1s, PRIs, and other trunk links to connect the PBX in the building to local telcos.
  • Stand-alone services: Most legacy on-premise solutions can’t offer a full unified cloud communications solution by themselves. Costs for these services must come through third-party vendors, which can add up to substantial extra fees.
  • Connecting locations: Even companies without multiple locations to support may have a dispersed workforce that they need to help. Bandwidth-intensive communications between buildings and sites can cause IT headaches and budgetary problems. What’s more, the presence of a wide selection of hardware can be an IT management nightmare.

What’s more, it’s difficult to feature availability and costs in the long-term with premise-based solutions. The lack of future-proofing can be a common TCO issue for companies considering keeping their system on-premise.

UCaaS Could be the Answer

Replacing the unpredictable and often expensive on-premise communication strategy with an all-inclusive solution such as RingCentral Office gives companies the advanced and fundamental communications solutions that they need, combined with the flexibility and scalability required to evolve in the future. Cloud phone systems:

  • Provide everything you need for communications and collaboration in one solution, including meetings, video conferencing, text, audio and team collaboration.
  • Allow for lower multi-site management costs: Anyone can add or remove phones or numbers in a system.
  • Reduce IT infrastructure and maintenance: Because RingCentral handles everything in the “as a service” model, operational expenses are minimised.
  • Eliminate telephony costs: Remove several line items like switches because UC traffic travels over the internet.
  • Increased worker productivity: Enhanced features and capabilities mean that workers can get more done, leading to improved revenue for the company.
  • Reduced up-front and ongoing costs: Phones can be rented for a pay-as-you-go model, and RingCentral handles all the updates to your phone system for you.
  • Minimised mobile workforce cost: Supporting a mobile workforce is easy with the RingCentral Mobile app, which turns any smartphone into a fully-featured office phone.

The flexibility, simplicity, and potential of UCaaS mean that it’s the ultimate solution for companies that want to reduce TCO and prepare their businesses for the future.


Steve Rafferty

Steve Rafferty


Steve is the Enterprise Vice president for EMEA at RingCentral. He supports business growth through the use of digital technologies. He has a track record of delivering value to shareholders, employees, customers and partners by building high performing teams and developing individual team members. Steve makes the complex easy to understand through great communication.


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