Premise based phone systems are often referred to as PBX or simply a phone system. The word “premise” is derived from “premises” which is defined as an area, property, or site. Therefore, an on-premise phone system is where you physically have all of the equipment necessary for operating a switchboard system within your physical location. The premise phone system receives a dial tone from a traditional telephone trunk provider. The dial tone comes directly into your location and connects to your phone system. On-premise systems have a server on-site.
You, the end-user, are responsible for any upgrades, maintenance, and expansion of the system. Unlike the on-premise system, the Managed VoIP is cloud-based. You pay a monthly fee to lease all of the telephone equipment which is located somewhere off-site. The internet is used to connect the provider with the customer.