Telephone Answering Service

The Allure of a Hosted System

Now May Be the Time to Say Goodbye to Your Premise-Based System and Move into the Future

By Peter Lyle DeHaan, PhD

Hosted telephone answering service systems have been around for a long time. Though many operations have praised the benefits of using a hosted system and switched to them, other services have been resistant to make the change.

Author and blogger Peter Lyle DeHaan

In contrast to a premise-based system, which you buy, install, and maintain in your office, a hosted system lives off site that you access remotely via the internet. This requires a mental mind shift from how things have always been to a new way of doing business, but it may be time to embrace that change.

Here are some benefits to consider when looking at a hosted platform to replace your premise-based system.

Financial Advantages

With a premise-based system you have a sizable capital investment to make, which is a balance sheet item. You must deal with financing and depreciation. A hosted system is a monthly expense, which occurs on your income statement. Check with your tax consultant for details, but most services realize a financial advantage by going with a hosted system.

Always Up to Date

When you buy an answering service system, it’s expensive to keep it current, running on the latest version. Though some upgrades come at no cost, others may carry an expense. And even with a maintenance agreement, some upgrades may not be covered. Contrast this to a hosted system, which is always up to date and running the latest software.

Save on Maintenance Costs

System maintenance on a hosted system is covered by your monthly service fee. There is no need for a maintenance contract or to hire expensive IT personnel. Though you will still have operator terminals to deal with, the room full of equipment and the need to keep it running at all times is gone.

Improve Reliability

With real time backup systems and the fault-tolerant infrastructure inherent with the hosted system, the threat of downtime is greatly reduced compared to an on-site system. This isn’t to say downtime will never occur, because it’s a reality with any technology, but it’s much less likely than with a premise-based system.

Free Up Facility Space

How large is your equipment room? Imagine freeing up that space for other uses. Yes, you will still have some equipment in your office, but it’s more likely to fit on a shelf in the closet than take up a full room.

Eliminate Parts Inventory

To minimize downtime with your on-site system, you must maintain an inventory of all critical spare parts. This is a costly investment that offers no benefit other than to give you peace of mind, with the potential to decrease the length of system downtime.

Slash Telco Costs

With a hosted TAS system, you also cut your telephone costs, as most of that shifts to your provider and is covered by your monthly invoice. Yes, you may still have some office phone lines or an emergency backup landline, but that’s minimal compared to your current telephone answering service expenses.

Reduce Utility Expenses

A premise-based system consumes a lot of electricity to run 24/7. When you remove that equipment from your office you also eliminate that expense. A parallel issue is backup power in the form of a UPS system and generator. With a hosted system, these can be much smaller and may not be needed at all.

Something that’s often overlooked, however, is that your premise-based system generates a lot of heat. This carries with it an air conditioning cost to dissipate that heat. If you don’t keep your equipment room cool, your system will overheat, causing increased downtime and reducing system life expectancy.


For all these many benefits, a hosted system deserves thoughtful consideration for your telephone answering service. If you’re still not sure about this, just ask someone who’s already made the switch.

Learn more in Peter Lyle DeHaan’s book, How to Start a Telephone Answering Service.

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of TAS Trader, covering the telephone answering service industry. Check out his books How to Start a Telephone Answering Service and Sticky Customer Service.

By Peter Lyle DeHaan

Author Peter Lyle DeHaan, PhD, publishes books about business, customer service, the call center industry, and business and writing.