The True Cost of a Business Phone System


Have you ever considered what your business phone system truly costs? If you have thought about this, have you ever asked yourself if there’s a better, cheaper way?

For such a basic utility, phones can be surprisingly expensive to install and maintain. It’s estimated that an on-premises phone system—commonly called a Private Branch Exchange or PBX—can cost an average of $1,000 per seat to install, not to mention the cost year after year that you’ll incur for maintenance.

Here’s a quick cost breakdown of some hidden fees that will crop up when you install your own PBX system phone system.


  • Hardware and software licenses
  • New phones
  • PBX licensing, maintenance, and upgrades
  • Telco connectivity: Voice T1
  • Multi-location connectivity
  • Telecom charges: local and long distance
  • Standalone services
  • Employing certified technician

All of these products can easily increase your phone bill up to $100,000 a year, in addition to the upfront hardware and installation costs you’ll need to get started.

So if you’re looking for ways to avoid the high costs of a PBX phone system while still having access to the latest technology, there are other options for you to consider. The beauty of living in the Internet age is that many services can now be accessed remotely via the Cloud.

The Cloud, if you’re unfamiliar with the term, is the name attached to any service that is hosted off-site in a datacenter. Because these services are off-site, you no longer have the large initial setup costs associated with installing a business phone system.This can help you save on the cost of labor for setup, the cost of PBX equipment, and the space needed to host that system.

In addition to your business saving money on the startup costs, you also save money on all of the licensing, standalone services, and other hidden costs that accompany an on-premises PBX. With most hosted phone systems, these costs are eliminated in favor of a single, affordable monthly subscription.

But saving money doesn’t mean you have to skimp on the features you need. A hosted phone system for businesses provides access to enterprise-grade communications to every business. This means that every business has access to important phone system features that were previously reserved for large companies with the budget to afford it. With a hosted business phone system from Jive, you have the ability to create intricate dial plans, access key call analytics, and enjoy a wide variety of other features that will improve your business practices.

A hosted system works well for:

  • Entrepreneurs who often work remotely.
  • Large organizations constrained by a low IT budget.
  • Call centers in need of call analytics.
  • Small businesses trying to minimize costs.
  • Large enterprises looking for enterprise-grade features.
  • Business professionals trying to run their practice.

In the digital age, your technology can make or break you—but that doesn’t mean it should break your budget. A hosted phone system saves you money compared to an on-premises PBX business phone system. By signing up for a hosted system via the Cloud, your business can have access to hundreds of features and improve your ability to perform and improve your customers’ experiences. You’ll eliminate thousands of dollars of spending from your IT budget and be able to focus more on what you do best.

Check out this whitepaper on how much an on-premises business phone system could be costing you!