What Is Cloud PBX?
The cloud is quickly becoming ubiquitous, and the communications industry is no exception. There’s been a lot of investment into the development of specialty solutions and services, such as the cloud private branch exchange (PBX). But along with the increasing impact of hosted PBX offerings — Spherical Insights predicts the global market will be worth $43.4 billion by 2032 — there's also substantial hype. That's why this month's FAQ installment will answer two critical questions: What is cloud PBX, and how can it benefit your business?
What Is Cloud PBX?
The key to cloud PBX lies in location. Traditional PBX systems and their IP-switched offspring reside onsite, requiring regular oversight and maintenance to ensure stable performance. Cloud solutions — also called hosted PBX — shift hardware to provider stacks.
For a relevant comparison, consider software-as-a-service (SaaS) platforms. Instead of buying and downloading software to local machines, SaaS deployments provide cloud-based access to services. Cloud PBX does the same. Businesses can leverage their internet connection and gain access to all the features of typical PBX systems without the need for costly hardware or support.
By combining ease of deployment, speed of service, and long-term potential, PBX in the cloud offers credible gains for enterprise calling.
Cloud PBX supports traditional landlines, IP phones, and mobile devices, and providers charge a monthly fee for service. Initial criticisms of cloud-based PBX were similar to that of VoIP: connection and traffic issues occasionally caused QoS problems such as dropped or poor-quality calls. Improved cloud infrastructure combined with widely available broadband connections have significantly reduced the likelihood and severity of these issues, especially when combined with solid QoS policies that prioritize PBX network traffic.
Is Cloud PBX the Same as Hosted PBX?
Although the terms cloud PBX and hosted PBX are occasionally used interchangeably, there are some key distinctions between them. Namely, where they are based and how calls travel before reaching their destination.
While hosted PBX may give the appearance of being cloud-based because it’s off-premises, it’s actually co-located, i.e., hosted at the data center of a third-party service provider. Your business connects to the PBX infrastructure via an IP, allowing you to make and receive calls through the hardware at your provider’s location.
A cloud PBX, by contrast, isn’t based physically, but virtually on cloud computing technology. Calls are transferred over the internet rather than being routed through any physical computer system.
Compare and Contrast
But just how do cloud PBX solutions stack up against on-premises offerings?
Cloud PBX
On-Premises/Traditional PBX
No hardware needed on-site, so set-up and maintenance costs are low.
Requires on-premises hardware and equipment, causing high initial set-up and maintenance costs.
On-the-go and flexible — staff can connect to the cloud and work from anywhere.
On-premises PBX is more restrictive, requiring staff to work from the office.
Quick and easy to add new capabilities and stay up to date with changes in business needs.
Difficult, time-consuming, and costly when it comes to scaling up or down.
Features can be altered swiftly to stay up to date with advances in technology.
High risk of obsolescence thanks to hardware requirements and the need for copper phone lines.
Does not require a dedicated IT team to maintain; your own staff can be trained in the software.
Often requires specialist training by the on-premises PBX provider.
Additional features are typically included in your monthly fee.
Upgrades need to be purchased.
Lower overall monthly costs depending on plans, number of users, and additional features.
Higher overall monthly costs. Fees are also particularly high for international calls.
Security
Traditional PBX systems aren’t connected to the internet but are under the direct control of your local IT, so they are not as susceptible to potential online security threats like hacking, malware, or other security breaches.
However, cloud PBX has come leaps and bounds since its initial incarnation, so much so that — as long as you take specific care — it can equal its on-premises predecessor in security offerings. Of course, it’s essential to choose a reputable cloud PBX provider who will take the necessary security steps to protect your data, and this element of outsourcing can make some people nervous. Luckily, the most robust systems will provide measures like encryption, access controls, authentication, and more.
Flexibility and Scalability
On-premises PBX can present some serious challenges when it comes to scalability and flexibility. Systems are designed to manage a set number of phone lines within a closed network. This means that both expansion and external connectivity can be a significant challenge. What’s more, traditional PBX only supports voice communications and cannot be scaled to support any form of enhanced multimedia.
As a physical system, they are difficult to relocate and are only a realistic choice for those companies that expect their business needs to remain constant and with no remote working requirements.
Cloud PBX has a competitive advantage here. Scaling is quick and effortless. Whether you need to add new lines during peak times or reduce capacity during off-peak seasons, this can be done with the click of a button. It’s a particularly good choice for businesses that experience fluctuations in demand or for remote teams looking to improve mobility.
Features can also be expanded based on business necessities or client expectations. Additional communication features like virtual receptionists, mobile apps, and integrations with popular business applications are also useful and unique to cloud PBX systems.
Cost
Installing expensive on-premises hardware and keeping up with associated maintenance costs makes cloud PBX a far better option in terms of cost efficiency. There’s a much lower initial capital investment compared with traditional systems, with no need for cable installations or any physical circuits. In fact, employees can work from existing internet-connected desk phones, mobile phones, laptops, and tablets.
Where traditional PBX is almost incapable of automatic post-installation updates, cloud PBX updates are constant and seamless. They also won’t require any hardware changes or IT support visits, and are typically included in your subscription fees. You’ll be able to manage the system yourself, without hiring a dedicated in-house team.
Remote Work Options
For many businesses, it’s the shift toward remote work that really makes cloud PBX worthwhile. According to the 2023 Buffer’s State of Remote Work report, which discusses the experiences of 3,000 remote workers globally, the majority of employees want to work either entirely or partially remotely. That means if you want to be competitive in the hiring market, you need to adjust — especially given that Deloitte’s 2023 Contact Center Survey notes the majority of leaders have either adopted, or plan to adopt, cloud solutions.
Cloud PBX Benefits
Change for change's sake isn't a good model for technology investments, but cloud PBX has proven itself both viable for enterprise deployments and reliable over the long-term. So, what does shifting to cloud PBX really do for your bottom line? And what cloud PBX features might you benefit from the most?
Ease of Integration: Cloud PBX systems are inherently vendor-neutral, meaning they play nicely with any existing cloud technology. Since no hardware installation is required, configuration is typically much faster than onsite solutions.
Virtual IT Support: If something goes wrong with on-premises solutions, local IT has to diagnose and fix the issue or call in outside help — both options that could take days or weeks. Under a cloud-based model, all IT support, system upgrades, and feature additions are handled remotely.
Scale on Demand: Your PBX needs can change over time, especially if you’re a start-up or small business. Adding capacity to local systems is both time-consuming and could impact existing service — and it's virtually impossible to pack up local tech if you move to new offices. Cloud PBX, also known as a virtual PBX, scales in the same way as any cloud resource — on demand. More bandwidth can be allocated to your PBX to address sudden traffic increases or the addition of satellite offices. When this capacity is no longer needed, you can simply revert to your original agreement.
Alignment with New Technologies: The next step forward in enterprise telecomms? Unified communications, which combine voice, video, and rich-media calling, in turn empowering employee collaboration and ease-of-use. But UC deployments naturally require both large bandwidth pools and flexible resources, making them a tough sell for onsite services and the ideal match for cloud PBX.
Time To Change: Choosing a Cloud PBX Provider
The ability to adapt to market changes and customer demands is a core skill for all businesses, no matter their size or specialty. In recent years, companies have understood the importance of cloud-based solutions in meeting this requirement. Where phone systems are concerned, cloud PBX is often a modern business necessity, ensuring users can respond rapidly to change.
After all, the modern office isn’t as static as it used to be. With the desire to work from home increasing among employees, your phone system needs to be flexible, easy to set up from anywhere, and accessible with just a softphone and internet connection.
Choose a provider that can promise and deliver on this, alongside 24/7 customer support for round-the-clock issue resolution. Plus, make sure that as well as offering a range of advanced features and extensions, your provider is committed to a security-first approach. For example, Vonage invests heavily in security and privacy measures and maintains a wide range of compliance certifications across our product lines. They include ISO 27001, PCI-DSS, SOC, HITRUST, and CSA STAR, to name just a few.
