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When it comes to telephony, too many businesses start with the wrong question: “What features does this system have?” That’s not the point. Every phone system can make and receive calls. The real pain comes when you choose the wrong model — and end up with outdated technology, frustrated staff, and unhappy customers.
From mid-market to enterprises, I’ve worked with all kinds of organisations across the UK and beyond, and what I’ve seen over the years is that the right telephony choice isn’t about ticking feature boxes. It’s about how your business actually works: your culture, your behaviours, and most importantly, your people.
In this article, I’ll walk you through the three main models — on-premise, hybrid, and cloud. I’ll explain how each one works, share the strengths and weaknesses I’ve seen first-hand, and help you decide which model best supports forward-thinking businesses.
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What This Blog Covers:
- On-Premise Telephony: Still Relevant or Outdated?
- Hybrid Telephony: Bridging On-Premise and Cloud
- Cloud Telephony: Features and Flexibility
- What to Keep in Mind Before You Decide
- Your Next Step Toward Smarter Telephony
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On-Premise Telephony: Still Relevant or Outdated?
On-premise telephony is what most people think of as a PBX. It’s a box, wired into analogue lines, sat in the corner of your office. It allowed your business to make and receive calls. But times have changed, and today, phone systems are so much more than operational tools. They have the power to change the way you do business – no matter the role.
With that being said, this option only gives you a basic set of telephony features and is quite rigid. If one person in credit control needs call recording, everyone has to have it. If something breaks, you’re waiting for an engineer to eventually show up with a screwdriver. If you want to add more users, you would be limited by what the hardware could do.
I saw this last point play out with a large travel agency with over a thousand employees. When I tried calling them to book a £10,000 holiday for my family of five, I was left on hold for 45 minutes, only for the call to be cut off. Most people would’ve given up and called another agency, but I was determined. So, I called again.
Not only did the same thing happen again, but I waited even longer! Why? Their PBX had run out of channels, so they literally couldn’t take my call. And not having a wall board either meant that they couldn’t see live calls coming in. Without this visibility, no one could jump up and say, “Blimey, New Business is getting hammered right now. Let's get these agents to get on the call to help them.”
Can you imagine how many other high-value customers they lost that day? And the week after? That’s the risk of sticking with on-premise.
Hybrid Telephony: Bridging On-Premise and Cloud
Hybrid systems are the middle ground between physical and cloud-based telephony: you keep your PBX but bolt on SIP trunks or cloud features. It’s almost like taking an old car in for service only to replace the wheels and radio, while the engine keeps failing. Yes, it buys you some time, and you might get some shiny, new features. But the core limitation is still there.
Moreover, in some cases, your PBX won’t even be compatible with the new SIP trunks. I’ve seen businesses spend money “upgrading” their PBX with SIP trunks, only to discover the box couldn’t handle them. So they ended up replacing it anyway. Hybrid might be appealing to businesses that aren’t quite ready for cloud, it buys them some time, but it isn’t a long-term solution.
Cloud Telephony: Features and Flexibility
Now I know, I may be biased, but cloud telephony really is different and built for the way we work today. There’s no equipment taking up space in your office, or engineers driving around with toolkits. Everything lives in the cloud and all you need is accessed through an internet line.
Like all cloud solutions, this telephony model was designed to be as flexible as possible. Smaller businesses tend to grow really quickly, and the last thing you need to worry about when expanding is damaging the customer journey or struggling to keep everyone in constant contact with each other.
With cloud, you can have offices in London, Birmingham, New York, and Paris — all on the same platform. The best part is that the calls between them are free. Moreover, features can be tailored to individuals. Need call recording for five users in credit control? Done. Want CRM integration so customer details pop up the second they call? Piece of cake.
And when disruption hits — whether it’s a train strike, extreme weather, or a sudden office outage — cloud allows business to continue as usual. I saw countless businesses where staff just picked up their laptops or mobiles, went home, logged in, and carried on working as normal. Try doing that with a PBX.
An NHS practice I worked with was branded the “worst in Yorkshire” for patient service. Once we replaced their PBX with a cloud system, they finally saw their call data. This feature alone really turned things around. They discovered most calls came in at 7 am, not 9 am when they officially opened. So they adjusted staffing, which significantly reduced wait times, and swiftly transformed their customer service.
Speaking of taking your business to new heights, one of the most overlooked benefits of cloud telephony is how it supports your people. I’ve worked with an organisation that employed lots of mums returning from maternity leave. Instead of losing them, the business gave them the tools to work from home for a few hours each morning. Not only did they keep their talent, but they saved on recruitment costs and had happier staff.
What to Keep in Mind Before You Decide
What Businesses Overlook: Culture First, Tech Second
Before you start shopping around for a new phone system, let’s have a quick chat about how to go about making the right decision in the first place. Firstly – and I can’t stress this enough – don’t start with the tech. Start with your culture.
For example, at Babble, I don’t even use a desk phone anymore. My colleague might prefer one, but I use Teams because it integrates with our platform. The point is, technology should fit into your natural workflow — not force you to change your behaviour.
Lots of businesses tend to forget this. Dazzled by the shiny lights and fancy terms our industry is guilty of pumping out, they buy systems with every bell and whistle. But their people don’t use them. Meanwhile, other businesses tell me how they work, what tools they already have, and we adapt the solution around that. That’s where the real value lies.
Cost: Stop Thinking Cheap, Start Thinking Value
Yes, PBX looks cheaper on the surface: you buy once, maintain it a little, pay your phone bill, and that’s it. But let’s be real: the hidden costs are everywhere. Missed calls. Wasted staff time. No visibility. Customers who, unlike me, don’t come back.
With cloud, you’re not just buying a phone system. You’re buying flexibility, continuity, insight, and growth. One customer told me they thought they were saving money by sticking with PBX — until they realised how much business they were losing every single day.
Cloud Security: No Longer the Top Concern
A few years ago, people worried about moving to the cloud. From “What will happen to our numbers?” to “Who has access to our data?”, I’ve heard every concern there is. However, today, most of my clients don’t even ask, because they’ve seen the benefits.
Let me put your mind at ease: numbers are safe in the cloud. In fact, you can spin up a local number in Birmingham to test a market without even opening an office there. Security is robust, and the flexibility is unmatched.
The real barrier now isn’t fear — it’s mindset. Smaller organisations often lag behind until they’re forced to change, like during COVID or the PSTN switch-off. The leaders, meanwhile, are the ones pushing boundaries, asking: “How can this technology make us better?”, and more importantly, “Where is this all going?”.
What’s Next: AI and Smarter Telephony
The future is already here. AI is starting to handle routine queries: “Hi, your delivery is out for Thursday. Do you still want to speak to someone?” That frees your staff to focus on high-value interactions. We’ll see more of this in the next three to five years: smarter, more customer-focused systems, available 24/7. (And yes, cloud is the only model flexible enough to keep up.)
Check out this blog for a deeper dive into how AI has drastically improved customer experience.
Your Next Step Toward Smarter Telephony
Deciding between on-premise, hybrid, and cloud telephony is not as complicated as it seems. The choice becomes clear once you focus on how your business actually works and where you want it to go.
The problem most smaller businesses face is trying to run modern, flexible organisations on outdated or patched-up systems. On-premise ties you down, and hybrid buys you time but not freedom. While cloud gives you the flexibility, scalability, and resilience you’ll need to grow — whether that’s supporting remote workers, integrating with your CRM, or adopting AI in the near future.
I’ve spent years helping businesses like yours navigate these choices, and my approach is always the same: I start by understanding how your business really works. What’s your culture? How do your people prefer to communicate? What does your customer journey look like? Once we know that, it becomes clear which platform best supports you.
My advice is straightforward: if you want to stand still, stay with on-premise. If you need a short-term patch, go hybrid. But if you want to grow, adapt, and future-proof your business, the answer is cloud.
So don’t wait for a crisis to force your hand. Let’s have a conversation about how your teams work today and what your customers expect tomorrow. Together, we’ll map out the telephony model that fits you best.
