When it comes to VoIP, companies have generally had two choices: roll your own system or leave it to the experts. On premise installations offer greater control and flexibility but require enormous up front capital expenditure as well as expert personnel. Hosted VoIP relieves enterprises from the hassle of maintaining the network and delivers an expanded feature set at a low price, although customization options can be few if your enterprise needs are very different from the average.

However there is also a third option called managed on-site VoIP which offers a compromise between the other two. With managed VoIP, the service provider offers all of the equipment, devices, software and technical expertise needed to deploy a VoIP network (similar to a hosted system) except that all the hardware is located at the client’s premises (similar to on-site installations).

Organizations that wish to eliminate the high costs of purchasing expensive equipment but which still require extensive configuration options generally choose managed VoIP. Service packages typically include network monitoring, deployment of hardware and software, upgrades and changes as well as service management. The main difference with hosted systems is that the equipment is present on-site which provides a few benefits:

Unlike hosted VoIP, the service provider customizes every deployment according to the needs of the organization
The enterprise’s internal staff is often consulted for feedback and feature requests during updates
Many vendors offer unique value-added services through the use of customized applications for monitoring and productivity

Some enterprises may prefer managed VoIP as it provides them a sense of control to have hardware in their office rather than in the cloud. While such service contracts are more expensive than a hosted subscription service, it is still cheaper than purchasing equipment and deploying your own network. Nevertheless hosted VoIP offers a few advantages as well:

Increasing/decreasing capacity according to seasonal changes is easier
Subscription model means that lines can be added or modified as necessary since the equipment does not have to be changed
Companies do not have to worry about physical security of hardware as there is no equipment in their offices other than the phones themselves

Both hosted and on-site managed VoIP promise to take out the hassle of maintaining networks for their clients. The greater degree of control and customization offered by managed VoIP is attractive to many enterprises whose needs deviate from the standard. In general however, hosted VoIP is preferred by many small and medium businesses as it costs less, is easier to manage and they prefer not to have equipment on-site.