What’s the Right PBX for Your Company?

Choosing the right business phone system for your company can be a difficult task. First, you need to decide if you want a Hosted PBX or an On-premise PBX phone system? Determine how many Users and endpoints will be required as well as scalability as your company grows.

Another consideration is if you want to use desktop IP phones, only softphone apps on mobile devices or a combination of both. Also consider what other Unified Communications collaboration tools may be available like video conferencing, SMS and chat for example.

In this article, we’ll discuss the differences between Hosted PBX, On-premise IP PBX, On-premise Analog PBX and provide some insight into the pros and cons.

Hosted PBX

Hosted PBX or hosted VoIP is a type of phone system where the provider is responsible for housing and maintaining the IP-PBX and handling the technology required to provide the services to the phone system. In some cases, simply connected a pre-configured desktop IP phone to the router and the calls, signaling, and features are handled remotely through an IP-PBX server at the provider’s location. A hosted PBX offers all of the standard PBX features without the need for an actual PBX in your home or office.

Remote employees anywhere in the world have access to the hosted PBX with a personalized account from any device that can register to the interface software. This means they have access to the hosted PBX from any Internet-enabled location or device that is certified for use with the company’s phone system.
Typically the only expense is a flat-rate monthly or annual fee on a per user basis. Plans may include unlimited minutes or per-minute rates with PBX features like Auto-attendant, Music on Hold, Greetings and Call Queues to name a few.

Pros and Cons

• Minimal initial equipment and set-up cost
• All IP-PBX feature programming is done by the customer
• Maintenance costs of the IP-PBX are the provider’s responsibility. Note: on-premise and remote phones and network devices are the customer’s responsibility.
• Low monthly or annual rates
• Scalability, easy to add more Users/extensions
• Upgrades and new features are included
• Connections and voice quality are a result of Internet connection
• Loss of Internet or power outage results in phone service interruption (settings can be configured so calls go to voice mail or routed to a cellphone)
• Customized features may be limited or unavailable depending on the provider
• Fee increases and cancellation fees may be charged

On-Premise IP PBX

The on-premise IP-PBX phone system, which is housed in a computer equipment room or phone closet at a location, is similar to a traditional PBX system. The biggest difference is more current technology is used for IP routing and the signaling is done with an IP phone to the IP-PBX server using a local network.

Calls can be routed through a traditional phone company as well as voice over Internet (VoIP) using SIP trunking. To connect the system to a traditional phone company Gateway cards are used. There are two options: the provider can be the one that provides this service or a SIP trunk can be configured for use with an Internet service telephone provider (ISTP).

Pros and Cons

• On-premise PBX is managed by User
• New open-source feature sets can be added without any license fees
• Can keep the current carrier
• Add more VoIP trunks to save on calling costs
• Over time there’s ROI for owning server
• No DIY time on the part of the customer
• Most providers offer training of staff on new IP-PBX system
• With SIP trunking, loss of Internet or power outage reduces the effect on operations. Calls can be forwarded to another number or mobile phone. There’s an off-site facility with failover or back-up system and power sources that minimize interruptions.

On-Premise AnalogPBX

For many years companies used analog PBXs that routed calls over Plain Old Telephone Service (POTS). An “on-premises” PBX means that your business is responsible for maintaining the necessary hardware on-site. As the technology evolved copper wiring and analog hardware became obsolete.
The initial start-up costs of using an on-premises PBX solution is typically much more expensive. It’s necessary to purchase your own hardware, set it up, and perform your own maintenance. These machines were large, needed special storage facilities, regular repairs, and were operated manually.
Remote employees cannot use the PBX and if a business needed to move to a new location, or add or remove a phone line, the process could be very costly and time-consuming.
There are several downsides to using this option:
1) Expense
2) Maintenance
3) Obsolete technology
4) No access for remote employees