Everything You Ever Wanted to Know About PBX vs. VoIP

Posted by Errin O'Connor on Jul, 27, 2021 06:07

Everything You Ever Wanted to Know About PBX vs. VoIP

Every day, businesses need to make decisions. Investing in a phone infrastructure, for example, is one. With the variety of options, however, it would take time to jump to a conclusion. There are two popular names you perhaps have heard of, including PBX vs VOIP? If it is your first time to hear about them, you possibly don’t know the one that best suits your specific requirements, streamlines your operation, and turns all your business goals into a reality. 

But don’t worry! In this guide, we will help you avoid any confusion and make a good decision with confidence. Read on for more information.

What is PBX?  

Known as a private branch exchange, PBX is a business phone system designed to connect all phones on office desks in a similar network that organizations of any size have been using for many decades already.  

Its ultimate function is to allow people in a business to communicate internally and remotely as a unified communication service. But it goes beyond that. Business phone systems are packed with other useful features you should not miss. These include the IVR menu and call transfers.  Traditional PBX phones feature a box that connects every internal device and line in an organization to external lines. They are also capable of call holding, forwarding, and other basic functions.  

Microsoft Teams Phones

Pros  of PBX Phone system

You Own The Hardware 

One of the benefits between PBX vs VOIP is that on-premise PBX is hardware ownership. Yes, you own every piece of equipment that connects to your phone system. It’s all yours. You do not need to share it with your colleagues and other organizations.  You can check our Microsoft Teams Phones for more information on hardware.

Perfect for Areas with No Access to High-Speed Internet 

Low-speed internet? That’s not a problem with a traditional PBX. In fact, it is ideal for areas with no reliable and fast internet connection. When you are operating a business in an area without enough access to the internet, it may be wise to invest in an on-premise PBX.  

Crystal-Clear and Reliable Call Quality  

People associate the traditional PBX system with low call quality. But it is not the case with on-premise PBX. The call quality is sharp, reliable, clear, and accurate.  

Cons of PBX Phone System

It Requires a Higher Cost  

When you consider investing in on-premise PBX, do not forget it is resource-intensive. There are multiple pieces of equipment you need to purchase. Let’s admit it. They may cause a dent in your savings account.  

Small businesses may not have enough budget. If you are in the same situation, there are excellent alternatives that will not cost you an arm or a leg.  However, there are still options available in the marketing for budget business phone systems like the Microsoft Business Phone system.

Fewer Features  

Another drawback of a traditional PBX phone system while comparing PBX vs VOIP is that the features are limited. Many organizations may think that the most expensive phone system is the best. But an on-premise system only has limited features.  

Even if you can communicate internally, hold, and transfer calls, it does not have the features that we can see in modern alternatives and options.  

Scalability Limitations  

Generally, PBX can support a range of phones. But time will come that businesses need to add and remove phones. While it sounds easy, it is complicated in reality. What you need to do here is to purchase another hardware to make it possible. If you do not make enough profit and you have to add phones, it would be difficult to buy another PBX kit.  

Expect More Downtime  

PBX systems are considered Single Points of Failure for a reason. That means the entire system will stop when a part of your technology fails.  

But there is a worse case than that. Whether your system requires a repair or replacement, it would take a few days before hardware could be shipped straight to your direction. As a result, your business operation will be affected. Particularly, you cannot place or even receive calls. When left unattended for a week, you might lose potential customers and profits as well.  

What is VoIP?  

Higher cost? Limited features? Scalability problems? Or more downtime? VoIP got you covered!  Voice over internet protocol, commonly known as VoIP, is a superb alternative to conventional PBX phone systems.  VoIP is a technology made to transmit any voice data online. Any VoIP phone system records voice and transforms it into data. This is an important feature to focus on while comparing PBX vs VOIP phone systems.  Read this article for understanding the benefits of VOIP PBX and its benefits in detail.

Since it is a recording, does it require higher storage space? No, it is not important as VoIP systems compress and turn these files into data packets in no time. Now, the data packets travel to the VoIP provider of your choice. This is where data packets are converted and connected to your target device within a few seconds.  

Before, the calls are of low quality. Everything changed today. With the constant innovation in technology, VoIP providers offer advanced voice calling features.  That’s not all! VoIP companies provide other unique advantages for small, midsize, and large organizations. Keep reading for further details!  

Business Phone System from Microsoft

Pros  of VOIP Phone system

Reduce Costs  

Have you been spending hundreds of dollars on a traditional PBX system? If yes, there are ways you can cut costs in your phone system using Wireless VoIP phones.  On average, a landline phone system costs $50 per month. On the other hand, a VoIP plan is less than $20 per line every month.  

Let’s make things worse. In a private branch exchange phone system, businesses need to buy and install a physical piece of hardware. Experts say it can cost a big sum of money.  Once you buy the hardware, you have to allocate an extra budget for installation. The rate ranges from $500 to $2,000 per user. Imagine if your team is growing. You have to prepare your pocket.  

There are also other expenses to experience, including copper wiring and calling. With VoIP, you can acquire more considerable and more reasonable savings over time.  

Complete Portability  comparison between PBX vs VOIP

One of the problems with the PBX phone system is that it is not portable.  

This is where VoIP can be a lifesaver. A virtual number or VoIP number, for instance, is incredibly portable. That means you can use the same number even if you relocate your business to other locations. You can also access and employ the number wherever you go.  

It’s Accessible  

Business Phone Accessible 

Apart from considerable savings, accessibility is another advantage of VoIP. In PBX, you cannot call wherever you want. In VoIP, you can make calls from anywhere. It is not just like that. If you cannot answer the call at the moment, you can get voicemails or transfer calls to someone free and competent. But your internet connection should be stable and strong.  

During this Covid-19 pandemic, the demand for VoIP has increased. Surveys found that approximately 3 billion people are mobile VoIP users already. Experts say more than 61% of small, midsize, and large businesses switch to a VoIP system. It is also estimated to increase in the future.  

Add-On Features Can Be Enjoyed Without Additional Costs 

It is true that traditional PBX provides call queuing, video conferencing, call transferring, and other functionalities.  But it is not available for free as these features do not come with the standard PBX system. That’s why you have to pay extra costs.  

Say bye to that trouble with VoIP. Every new functionality like calling features does not require another payment.  So, if you are on a budget and want to enjoy quality features, it is a wise idea to switch to VoIP technology as soon as possible.  

Expect More Flexibility with Softphones  

VoIP also comes with Softphones that you can install on whatever device you are using. It could be a smartphone, a personal computer, a tablet, and another smart device.  

If you feel skeptical about Softphones, you do not have to feel that way. It is a multipurpose tool. It can free up desk space, cut extra equipment costs, allow for greater portability, and enable a connected workforce.  Portability is often a major factor in PBX vs VOIP comparison.

Cons  of VOIP Phone system

Strong Internet Connection is Needed  

VoIP requires a strong and reliable internet connection. If there is a problem with your connection, you may not enjoy its advanced calling features.  So, if you are planning to relocate your small business, be sure the internet is good in the area for your convenience.  

You Cannot Track the Location of Emergency Calls  

If you need to track the location of emergency calls, it is not possible with VoIP. Look for other excellent alternatives, or let us wait for VoIP providers to include this feature into their cloud-based services soon.  

It Might Require Time to Learn  

VoIP is user-friendly and easy to navigate. But if you have been using a traditional PBX for years, the transition to VoIP will not be easy. It really takes time to understand and learn VoIP technology. Don’t worry! You just have to go to the flow. If you find something confusing, do not be afraid to contact the service provider of your choice.  

Which is Better Between PBX vs VOIP?  

It’s VoIP, no doubt. The features are superb. The VoIP plan is cost-effective. The customer support may be responsive and accommodating. However, it depends on your VoIP providers. So, what’s your thought? Invest in VoIP now to stand out from your competition, improve communication across your organization, and boost revenues at the same time.

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Errin O'Connor
About the Author

Errin O'Connor

With over 25 years of experience in Information Technology and Management Consulting, Errin O’Connor has led hundreds of large-scale enterprise implementations from Business Intelligence, Power BI, Office 365, SharePoint, Exchange, IT Security, Azure and Hybrid Cloud efforts for over 165 Fortune 500 companies.

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