, , ,

Comparing Skype for Business in the Cloud, Hybrid and On-Premises

Skype for Business offers plenty of deployment options, but which is best for your business?

Skype for Business is much more than a business-focused repurposing of the famous peer-to-peer communications app it shares its name with. While it shares many features with Skype – user-friendly access to voice, video and IM, for example – Skype for Business also does so much more.

When Microsoft decided to replace its Lync UC platform with Skype for Business, the intention was to create a complete end-to-end enterprise class communications and collaboration solution. A key part of that was to offer a flexible range of deployment options covering cloud, on-premises and hybrid so every potential customer could use Skype for Business in a way that best suited its operations and objectives.

This level of choice is great for the end user, but it also requires an understanding of the different options so the right decision can be made. In this article, we compare the Skype for Business editions available with the key facts you need to know when making your choice.

Skype for Business Server Edition 2015

Skype for Business Server Edition is the on-premises software solution. Part of the broader Office software suite which includes Office programmes, Exchange Server and Sharepoint Server, it is the direct replacement of Lync Server.

Skype for Business cloud, on-premise and hybrid
Skype for Business was built as a complete end-to-end UC solution with cloud, on-premises and hybrid deployment options to suit all uses.

Running Skype for Business Server Edition requires customers to buy the software up front and then configure and install it on their IT network. These can be variously viewed as advantages or disadvantages, depending on your viewpoint. Many businesses are moving away from on-premises solutions to avoid high capital expenditure and what is widely regarded as a higher total cost of ownership (TCO) compared to hosted cloud services.

It is true that configuring a server edition on your IT network can be complex, especially if you are setting it up across multiple sites in a large organisation. Outright ownership also adds ongoing costs in maintenance and repair. But many businesses, especially larger enterprises, still prefer the level of control they get from outright ownership. The added expense and need for full time IT support are viewed as worth it.

Originally, Skype for Business Server edition was a better option for large organisations because it provided full access to enterprise-grade telephony and collaboration features. This has not been so relevant since Microsoft added the same features to its cloud service with the Office 365 E5 Enterprise release.

Still, many enterprises opt for Server Edition because of the additional control they have over things like system security and timing of updates. For example, with a hosted service, you are at the mercy of the provider as to when updates and upgrades are run. This can become very inconvenient if it happens to coincide with a time when you need full access and functionality. Also, running your own on-premises solution is viewed as the better option if you wish to customise how Skype for Business runs on your network or integrates with other IT systems you use.

Skype for Business Online

Skype for Business Online is a cloud-based application available as part of the Office 365 suite. Office 365 is a subscription-based service, with different plans offering access to different bundles of features. Out of seven Office 365 business packages, Skype for Business is available on five. Licenses are sold per user.

Skype for Business logoAs a cloud application, there is no need to purchase software up front as with the server edition. Capital expenditure is therefore replaced by the on-going operational expenditure of paying the subscription, although there is an annual commitment on licenses. There is no need for configuration and set up – Skype for Business Online is available and ready to go as soon as you have an Office 365 log in. All maintenance and updates are handled by Microsoft, lowering Total Cost of Ownership.

When Skype for Business was first launched, only the server edition included PBX and enterprise-level conferencing capabilities. But a Cloud PBX has now been added to the Office 365 enterprise plans, along with Skype Meeting Broadcast, which allows broadcast of webinars of up to 10,000 people. All Skype for Business Online subscriptions support web and video conferencing for up to 250 people.

The main advantages of Skype for Business Online are lower costs, ease of use and flexibility. Small businesses can access enterprise-class voice, chat and collaboration for just a few pounds per user per month. With Cloud PBX and Exchange Online, it offers the convenience of phone and email all in a single interface. And as a cloud application, you can use it on any device, wherever there is an internet connection.

Skype for Business Hybrid

There are a number of potential benefits to running Skype for Business Server on-premises alongside Skype for Business Online in a hybrid deployment. It might be that you are looking to gradually migrate your UC to the cloud, and want to run both on-premises and cloud systems for an interim period while this happens.

Some businesses prefer to use Skype for Business Server as the core system, but like the flexibility offered by the online edition, such as being able to use the full range of features on mobile devices.

Skype for Business hybrid for calls
Many business opt for a hybrid Skype for Business deployment to provide greater flexibility for their business phone systems.

Microsoft supports a wide range of hybrid options for Skype for Business. The most obvious. is to simply run Skype for Business Server and Online side by side. Some users are homed as on-premise users, others as Online users, and the two are synchronised through Active Directory. This is a good option for migration, where staff might have different preferences for on-premise systems or cloud, so you can accommodate both and move people over gradually.

Other options include running Skype for Business Server with Exchange Online and SharePoint Online, reducing demand on your data centre from email and collaboration. Similarly, you could run Exchange Server with Skype for Business Online, keeping email on-premises and linking it to UC in the cloud.

A popular hybrid option is to combine Skype for Business Server, or the hybrid gateway Skype for Business Cloud Connector, with Phone System in Office 365. The advantage of running VoIP through a Cloud PBX like this is that you can run mobiles on your business phone system without the need for additional edge servers on premises.

Skype for Business / Microsoft Teams Series Sponsors

Enghouse Interactive

A leader in customer communications with integrated solutions such as multi-channel contact centre, self-serve, attendant operator consoles & call handling.


Nuvias Group is a pan-EMEA ICT distribution business incorporating brands such as Wick Hill, Zycko and Siphon.


Plantronics is a global headset manufacturer producing audio communications equipment for business and consumers.


Polycom are a video conferencing provider and manufacturer of SIP phones, headquartered in the USA.

Sennheiser logo

Sennheiser is a German privately-held audio company specialising in the design and production of a wide range of headsets for business and personal use.

Swoop Datacom

Complete IP endpoint eco-system provisioning and management platform with secure capability and real world template support.


Global cloud video conferencing & collaboration solution provider headquartered in Norway.

West Unified Communications

Global unified communications and contact centre vendor headquartered in Chicago, USA

Leave a Reply

Written by Paul Newham

Paul Newham

Hi I'm Paul, I specialise in technology, covering telecoms, cloud and IT infrastructure and digital marketing.