The reason for a difference in these systems is in reliability, security, capabilities…

Premise

   Reliability / Redundancy – Offers the highest level of reliability and redundancy available on the market, with uptime reaching 99.999%

   Security – Offers an extremely high level of security.

For Who? – This system might make more sense for those that:

• Consider minimizing downtime as a top priority
• Consider protection of data as a priority
• Planning to have their phone system for over 5 years
• Have over 20 users per site
  
  

Cloud

   Reliability / Redundancy – Lowest level of reliability and redundancy, uptime of the system is over 99.8%

   Security – Lowest level of security since you’re calls are over the public internet

For Who? – This system might make more sense for those that:

• Are looking for a temporary phone system
• Can endure several hours of system downtime during business hours per quarter
• Have under 20 users per site / Have a great deal of remote workers
• Do not have the financial ability to make larger payments upfront
• Cannot have a bill that fluctuates month to month
  
  

Private Cloud 

   Reliability / Redundancy – Offers the highest level of reliability and redundancy available on the market, with uptime reaching 99.999%

   Security – Offers the highest level of security available.

For Who? – This system might make more sense for those that:

• Consider protection of data as a top priority
• Consider minimizing downtime as a top priority
• Are planning to have their phone system for over 5 years
• Have over 20 users per site
  
  

As you can see there are many factors that need to be discussed in order to ensure the solution you chose is the right one for your needs.