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How much will it cost my business to migrate to a premise based VoIP phone system?

We will cover how much it costs to migrate to a premise based VoIP phone system. When it comes to migrating to a premise based VoIP phone system, one of the most common questions our customers ask us about is the price. Specifically, they want to know how much it will cost to migrate, change, or upgrade to a premise based VoIP phone system.

Over the years, we’ve heard this question so many times from companies of all shapes and sizes. For some, we recommend that they abandon the idea and go with cloud based, or hosted VoIP service. For those that are best served with a premise based phone system, the best bet is to sit down and carefully review the ins and out of their business’s needs.

How much does it cost a business to migrate to a premise based VoIP phone system?

First things first, most of our customers ask us this basic question because they’re comparing it to a cloud based system. For many, they’re unsure if they should go with 100% cloud service, or updated premise based phone technology.

So, here’s the deal - it’s hard to pinpoint a price because it depends on many, many factors specific to your business and your needs. Remember though, when buying a premise based VoIP phone system, your one-time upfront costs are much higher, while cloud is cheaper up front. Remember, you’re still buying a “phone system” to be installed on-site. It will require a maintenance plan and still needs local support, IT support, etc. to keep it plugging and chugging.

Having said that, depending on leasing options, you can expect to spend anywhere between $500 and $1,000 per month, over the course of a 5-year contract. Conversely, you can pay upfront for your new phone system, and costs could be anywhere from $5,000 to $25,000 to $50,000 or more!

Remember that the total costs of migrating to a premise based phone system depends on three main things:

  • How much does the premise based phone system cost? Are you buying or financing it?
  • How much does the T1 provider per month cost? Is it time to look at other options that are less expensive?
  • What is the fee for maintenance & software subscriptions to keep the phone system current for its entire product life-cycle?

When looking at your costs, compare it to your current hard and cost costs. Think about things like if you have an expensive maintenance plan on an old dinosaur phone system. You’d be surprised how much you’re wasting just to keep your existing system running as is.

Also, look at your contract terms to figure out if it’s the right time to migrate to a VoIP phone system. Depending on your ETF (early termination fees), it might not be cost effective at all to migrate to a VoIP system. In fact, you might have to wait a few months, or even a year or two, before you’re financially able to migrate. However, depending on the VoIP dealer you’re in talks with, they may offer to pay off a portion, or all your ETFs, so this is something you need to explore carefully.

And speaking of VoIP dealers, how much will the phone dealer charge you for various items relating to a new VoIP system? I’m referring to things such as pricing, training, labor, etc.


How much will it cost my business to migrate to a premise based VoIP phone system?


Variables that impact the cost of migrating to a premise based VoIP phone system.

In terms of understanding the costs, here are some specifics that can help you figure out where your costs may lie when migrating to a premise based VoIP phone system.

What are your software needs?

Depending on your needs, your software costs can range wildly. For instance, are you investing in a phone system that uses desktop software for managers & staff to get most use out of phone tech? Do you want mobile software for your iPhones and Droids?

Your software needs can drastically impact the costs of migrating to a VoIP system.

Are you a contact or call center environment?

Being an office with 50 users or less, your needs may be somewhat normal. However, if you’re a contact or call center type environment, than your needs may be drastically different. For instance, do you have service or sales department that are going to have contact center agents that are going to log in & out for real time metrics for quality control for or advanced call routing? You could see similar needs like this in a car dealer with various departments.

If you want the ability to see activity REAL TIME as it happens in a department, you need call center software and this will add cost and complexity but give you more value and metrics.

Do you want your calls automatically recorded?

When it comes to ending the he-said she-said game, there’s no better tool than simply recording your phone calls. If you want all calls, both inbound and outbound, as well as toll-free to be recorded, you can do that with VoIP, but it will impact your costs. Also, if you want your calls backed up and easily searchable, again this will cost you.

What type of system do you need?

I’m talking about the whole nine yards. Are you looking for simple phones with basic capabilities, or something more complex with various features? Do you need conference phones? What about hardware such as routers or switches? Do you need wiring? Does this system need to be professional designed?

The system you want to create and implement will drastically impact the costs of migrating to a VoIP phone system.

How to determine the cost to migrate to a premise based VoIP phone system?

The essential point is your best bet is to talk to a local phone dealer in your area and get some details in order to get a better idea of the cost. In a scaled business with more than 30 phones it's next to impossible to give an accurate quote without seeing the business first hand, otherwise, there will be too many assumptions and the proposal won’t be accurate at all.

To learn more about the costs surrounding migrating your business to a premise based VoIP phone system you can click here to contact us online, give me a shout directly at, or touch base with me at 908-378-1218.

By Vincent Finaldi
Vice-President, Tele-Data Solutions
E-mail: | Direct Line: (908) 378-1218
What brings me satisfaction is meeting with New Jersey–based businesses and genuinely helping them solve communication and business problems. As someone who has lived in New Jersey my entire life, I love working and playing here. I live in Morristown with my wife, Lisa, and root for the New York Giants.

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