Hidden Costs of On Premise Phone Systems- Where are They?


Managing the System

Phone systems need regular maintenance. System management can be expensive and underestimated with an engineer making an average of $60,000 per year not including benefits. Costs related to maintaining can rise quickly, especially if your system is integrated with other applications or IT services. With TechmodeGO in the cloud, you can easily self-manage the system with a simple interface.

System Performance

The more features you implement on a premises-based system, the more likely it is that you will need to upgrade your processor. This is rarely factored in at the time of purchase and can end up costing thousands, because you are in effect replacing the entire core of the system. With a hosted system from Techmode, this issue is completely negated.

Integration Costs and Updates

Need to integrate with your CRM or ticketing system? It normally costs you extra to get a system integrator to perform what can be a complextask. In addition, custom integrations often lock you in to the current version of the software. Attempts to update the software will break your integrations and require additional payments to fix. With cloud-based systems, the integration is already done and can be switched on at a moment’s notice.

How many hours per week would it take to manage my system?
How much will it cost to hire an engineer to support it?
What happens if the system slows down or needs an upgrade?
What integrations does the business need?

Data Storage

Traditional on-premises systems rely on server storage for features like call recording — and that means they can only store so much data. When you run out of storage, you cannot save any more data. This is an issue for compliance when the business nature requires you to save that data. With TechmodeGO, your recordings are stored in the cloud, so you don’t need to worry about running out of space.


How will the on-premise system scale with peaks and lows in demand? It can’t. You need to buy capacity for peak utilization, even if it’s only used a few weeks out of the year. Any time you aren’t using it is wasted money. With TechmodeGO, you can quickly scale up as business needs require, no need to pay for what you don’t use.

Redundancy and Disaster Recovery

Adding site redundancy for a traditional prem system doubles the price, you will need an entire duplicate system to have full redundancy. You will need to account for the costs if you lose equipment due to flood, fire or electrical failure. TechmodeGO is in the cloud, your business communications are always available on multiple devices. Equipment loss or failure is no longer a concern.

Is This Even the Right System for my Business?

Cloud phone solutions allow small businesses to have access to advanced PBX features, but it does not require the heavy investment of traditional on-premise systems. Set up is easy, employees spend less time managing their phones and more time on what’s important to your business. TechmodeGO is straightforward and efficient, there’s no need to waste a lot of time learning how to manage the system.

How much data can we store?
Has this type of system had any reliability or security issues?
How is mobility supported on this system?
When will the manufacturer stop developing for this system?

Hardware Maintenance

With a PBX system, you will need to factor in the maintenance costs of your on-site hardware. A few things that you will need to factor in are: temperature control, power consumption, what happens during severe weather, etc. With TechmodeGO, the system hardware is in our AWS data center, so you do not have a cost for server maintenance.


If a premises-based PBX is not constantly updated and patched, it could be vulnerable to cyber-attacks. Keeping up to date means an annual maintenance fee or large one-time upgrade fees. With TechmodeGO, these updates and patches are implemented immediately with no additional cost to you. TechmodeGO lives in a highly secure, world class data center, it’s built to prevent service interruptions, DDOS attacks, and other security issues.

Mobile Workforce

Mobile integration with premise systems can be tricky. It can result in call charges on the PBX trunks, with calls being routed to places they weren’t intended. TechmodeGO was built to enable and enhance connectivity for your mobile workforce. Mobile applications integrate with TechmodeGO enable you to make and receive calls from any device with your business phone number.

End of Life Hardware

The average lifespan of a premises-based system is about 7 years, mainly due to the hardware no longer being supported. You may also discover that the features that your business has grown to rely on are no longer being upgraded, leaving you with an expensive system that cannot meet your future business needs. With TechmodeGO, updates are done automatically, as often as once a week.

What are the annual maintenance costs of the hardware and software?
Have you sized this system for peak business demand?
How quickly can we add more resources?
Am I getting full redundancy? Am I paying for features I don't need?

Want To Know More?

Contact Techmode today to find out more about how our enterprise or SMB business phone solutions, on premise or in the cloud, can deliver results for your business.

Contact Us