It works great with H.323 phones. I haven't had as much luck with using SIP devices, although that could just be a function of the environments in which I've set it up.
The real issue is cost. How many devices are you using, and what is the monthly cost to you. Most providers I've worked with are in the $25 CAD/month range for each set, with a free phone. If your business needs dictate that your phones are critical I would avoid the cloud like the plague - any number of factors could impact performance, and if you go offline your customers will not be able to reach you. The advantage of the cloud, of course, is that it stays online even if you aren't. While they may not be able to talk to you they could leave a voicemail, or twin to a cell phone.
I would suggest that you ask yourself how important telephony is. If it's business critical keep your equipment on premise. If it's not business critical you can save some money initially by migrating your users to the cloud - but be careful, because it can become very costly over time. Subscription services make it difficult to change providers down the road, as well.
