What is Cloud Hosted PBX?

Traditional private branch exchanges (PBX) allowed businesses to use their own in-house telephone exchanges, housing control over multiple phone lines and organizing incoming call traffic within the company inside a gateway box on-site. A cloud hosted PBX does all of this off-site and in the cloud. Either system can use voice over IP (VoIP) technology instead of using traditional landline hardware or a hybrid system of VoIP with some manual telephone switching.

Benefits of Cloud Hosted PBX:

  • Reduced Costs
  • Less Hardware/Infrastructure Needed
  • Advanced Features and Integrations
  • Make a Small Business Seem Bigger
  • Online System Interface

Understanding what a cloud hosted PBX is may require a bit of context and history. With the availability of VoIP services and the ubiquity of phone ownership, it may be hard to appreciate, at first, what a PBX does and why cloud hosting is valuable. There are important differences between cloud hosting and traditional PBX systems. These differences can impact your ability to afford a PBX system and VoIP services, making it more or less expensive to deploy your business telecommunications system and influencing what features are available to you. You should carefully consider the advantages and disadvantages of a cloud PBX before you make your decision. After reading this article, you should have a better idea of what questions you should ask and what considerations you should have.

In this article, we will introduce cloud hosted PBX systems and how they can help your business. We will also help you determine if you need one yourself.

Article Contents:

  1. What Is PBX?
  2. Why Should I Choose Cloud Hosted PBX?
  3. Cloud Hosted PBX Features
  4. Is Cloud Hosted PBX Right for My Business?

1. What is PBX?

The PBX term itself is from the early days of widespread phone use. “Private” branch exchanges are distinguished from the “public” exchanges that residential and other phone users connected to. A private exchange allowed you to have additional lines, manually control incoming calls and manage communications inside of a large organization. Originally, this activity was done either from a switchboard somewhere in the building or on somewhat sophisticated handsets that were probably custom-designed for the company.

These systems could be installed with additional wiring, planning and programming. Phone operators controlled these systems in similar ways to how public phone systems were managed. Technological improvements led to better phones, fewer operators and improved infrastructure. The concept of having enterprise-grade phone systems capable of handling large call volumes remains an important part of doing business. Today, a traditional PBX system usually requires installing a PBX gateway box on-site, and this may still cost several thousand dollars.

2. Why Should I Choose Cloud Hosted PBX?

Today, many of these systems are cloud hosted thanks to improved Internet capabilities and expanded bandwidth. By packaging voice data for traffic online instead of through phone lines, VoIP is already capable of accomplishing much more for phone customers than plain old telephone service (POTS). Taking it one step further, though, you can choose to have your PBX functions conducted off-site so you can save money on equipment and maintenance costs. Although your Internet bandwidth does limit how much call traffic you can process with a hosted PBX system, there really is not a strict limit to how many extensions you can have. You no longer have to ask your phone company to help you modify your onsite PBX or spend a large amount of money adding phone infrastructure to your building. Cloud hosting is really a breakthrough for small operations.

Instead, you can obtain the equipment you need and start using your PBX while all phone line and queue functions are handled online in the cloud. Your software and infrastructure investments are smaller and you may be able to start using your PBX in under a day. You still need computers and headsets, IP phones or analog phones with analog phone adapters (ATAs) to use VoIP. You also need a VoIP account of some kind. These investments are typically much smaller than what you would spend to install a traditional PBX, however.

While cloud hosted PBXs are great for many smaller businesses and others that do not experience heavy call traffic, cloud hosting does have limitations. At some point, if your business communications needs grow enough, you may need a local PBX system because hosted cloud systems use more bandwidth. These local systems may also be more secure, since you maintain your PBX on the premises. You can even save money with a local PBX if your call volume is large enough, since you can switch VoIP service providers during different times of the day, peak call levels or for other reasons. For large organizations, sometimes a local system is more practical. For these companies, using SIP trunking may make more sense if they want to use a traditional PBX while also using VoIP services.

Cloud Hosting Advantages:

  • Low Upfront Deployment Costs—No expensive gateway to purchase and host onsite.
  • Enterprise Phone Service Features—You get access to features that make your business look and feel bigger, such as multiple virtual extensions and virtual receptionist services.
  • Support and Maintenance Provided by VoIP Vendor
  • System Stays Online—Power outages take onsite PBX systems offline until power can be restored, so your VoIP service would be disrupted. Hosted PBX systems are also great for creating redundancy within a business telecommunications system in case an onsite PBX fails.

Disadvantages and Considerations:

  • Large Communications Systems—If you have very heavy call volume, an onsite PBX may provide better quality and cost efficiency with your VoIP service.
  • Uses More Bandwidth—Hosted PBX systems typically require significantly more bandwidth for the same call volume.
  • Less Direct Control—Offsite PBX systems may provide less direct customization. You do not directly secure the system.

3. Cloud Hosted PBX Features

Hosted PBX typically offers more features and flexibility than traditional PBX with landlines, since technology changes so rapidly that existing PBX systems rapidly become obsolete. You can easily control your system from an online portal and readily scale capacity and capability to match what you will actually use. As such, it is a great solution for small to medium-sized businesses (SMBs). As your business grows, you can increase capacity and features to fit your needs.

Some Typical Cloud Hosted PBX Features:

  • Call Queues
  • Automated Receptionist
  • Unlimited Virtual Extensions
  • Graphical User Interface (GUI)
  • Connect Branch Offices Through Internet Connections
  • Bring Your Own Equipment (BYOE)
  • Is Cloud Hosted PBX Right for My Business?

If you are looking for a reliable, inexpensive and scalable way to access business communications services, a cloud hosted PBX might be right for you. These systems can offer you an accessible way to achieve more and use VoIP throughout your business.

First, you should ask yourself what you are trying to accomplish with your PBX. Here are a few questions to think about:

  • How much call volume do I have?
  • What is my budget?
  • Do I have enough Internet bandwidth for the call volume I have?
  • Do I prefer to service my own system directly or outsource the maintenance of my PBX?
  • Am I more concerned about reliability or cost?
  • If I already have an onsite PBX, do I want to switch or do I need a redundant system?
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