Comparison B/W Hosted PBX & Traditional On-Premise PBX

Telecom Business Review | Friday, December 17, 2021

A good consultant can help you decide which of these pros and cons outweigh the others, given the specifics of your situation.

Fremont, CA: Imagine, if you will, the outdated telephone switchboard, with a live operator fiddling with analog levers, switches, and plugs to join calls. It's a hackneyed image, to be sure, but it's still effective for introducing the idea of a manned switchboard with several lines and any number of calls that need fielding.

Businesses utilize the modern equivalent of that kind of system, opting for multi-extension phone lines rather than several individual lines. This modern system, called the "private branch exchange" (PBX), doesn't require live operators anymore. Often, a receptionist is known to manually direct calls from those who don't know how to contact the person they're trying to commune with.

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The question now arises whether PBX serves a company best in the traditional model described above or makes it more sensible to turn to a Hosted PBX system, which eliminates the PBX equipment from your premises. However, your telephone calls will be replied to, so what's the best way to choose?

Naturally, each company has various needs, and what works best for one company will not be the best solution for another. Let's consider the benefits and disadvantages of each approach, so you can weigh the pros and cons to find the best solution for your company.

Why You Might Prefer a Traditional PBX

When you house your own PBX on-site, you have more control. The phone line and its diverse extensions are alone under the management of your company. This is the main advantage that draws most people who choose traditional PBXs, but there are also additional advantages.

Since the system is your own, you can modify it as needed, which may be especially valuable if your phone needs are complex or dynamic. If you need many phone lines, getting a PRI ("primary rate interface") is recommended for greater phone line usage efficiency.

Integration with your present CRM platform can be smooth, too, because an in-house PBX is generally intended to work well with all of the tech tools that your company depends on. Again, this should provide you access to some best-in-breed functionality.

Furthermore, an in-house PBX is the best choice for businesses with a large centralized workforce with specialized needs. Once you surpass a critical mass of extensions (within 50 or above, depending on the system), in-house PBX is specifically cost-effective.

Why You Might Like to Avoid a Traditional PBX

When you are in charge, the responsibility and maintenance of any type of system fall on your shoulders, and an in-house PBX is not unlike. If this management is your forte, you will likely do fine with it, but the challenge of many retaining and increasing extensions is prohibitively complex.

Budget stress may be the powerful downside when hosting your PBX. You'll find higher initial charges and setup costs than you would with a hosted system, and you are the one to pay for yearly maintenance and regular upgrades. Plus, you need space for the PBX to keep it charged and physically secure. Of course, the easy key is to hire someone to help upkeep your PBX, but even this plan of attack may be inefficient.

Study your financial needs closely before pursuing or leaving the idea of a Hosted PBX.

Why You Might Prefer a Hosted PBX

If your company works in several locations – or if your business has no headquarters location and your employees all work distantly, for instance, or travel extensively – then utilizing a hosted PBX may be an excellent choice for strengthening everyone's phone extensions under one system.

A Hosted PBX provider is reliable for ensuring you can make calls uninterrupted in a partial communications outage. In addition, they frequently back up their systems to protect yours. Even for one site, still, you can achieve great flexibility when adding or removing extensions when a Hosted PBX provider is devoted to servicing your PBX.

Lastly, the cost may be the greatest advantage of using a hosted PBX. Industry analysts calculate that setting up hosted PBX costs up to 70% less than performing an in-house PBX.

Figuring Out What's Best for Your Business

When deciding whether to use Hosted or in-house PBX, there are many factors to consider, from the size of your team and the number of networked positions to your comfort levels with technical issues and your tolerance for being reliant on service providers.

Some of these parameters speak to your business, while others come down to personal preference. A good consultant can help you decide which of these pros and cons outweigh the others, given the specifics of your situation. Any way you cut it, it's a hard choice to make and one that is best tackled with the help of experts.

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