At first glance, PBX and VoIP seem like two very different types of phone systems, but modern technology, such as IP PBX, cloud PBX, and SIP gateways, allows many businesses to use a combination of both.
The variety of options and combinations will allow you to create a custom phone system that fits your needs, and you probably won't have to worry about the differences between PBX and VoIP during your search for a new phone system. Any provider worth considering should be able to help you navigate your options with ease.
Why is PBX and VoIP confusing?
PBX (Private Branch Exchange) is a traditional telephone system that works with analog lines. It allows internal communication within an organization and connects calls to the PSTN (Public Switched Telephone Network).
Basically, this allows your calls to travel through physical wires to connect you to the person on the other line.
In the past, these systems required human operators to connect and disconnect cables; companies had to employ many of them to keep operations running smoothly.
Then came the PABX (private automatic branch exchange). This automatic branch exchange automated the manual aspects of connecting calls, eliminating the need for human operators. PABX is technically the only version in use today, but we call it PBX for short.
Modern PBX systems include features such as:
- Ability to manage multiple phone numbers.
- Phone menus.
- Call routing.
- Call management.
- Analytics.
- Voicemail.
This is what people mean when they talk about PBX; no one is actually talking about manual switchboard operators.
Some businesses still use PBX systems connected to the PSTN, although many are in the process of switching to Internet-based communications, such as VoIP. To make matters even more complicated, VoIP can technically be used over a PBX system as well.
While VoIP is the best option for most, traditional phone systems offer some advantages:
- Reliability: Traditional PBX systems are known to be very reliable. They work even during internet and power outages.
- Quality of service: They often provide consistent, high-quality calls, which can be important for certain industries.
- Security: These legacy systems can remain isolated from the Internet, reducing the risk of cyberattacks.
However, they are not without their flaws.
Physical hardware makes it a real hassle and expense to maintain and operate. When there are problems, you'll likely have to call a technician, which means potential downtime. And it gets even more complicated if you want to hire remote staff.
VoIP services have PBX software
VoIP converts your voice into data packets and sends them over the Internet to the person you're calling. When the data packets reach their destination, they are decompressed and converted back into sound.
Compared to the traditional phone systems I talked about earlier, VoIP is cheaper and much more flexible. You and your team can use it on any internet-connected device, including your computer, mobile phone, or IP-enabled desk phones.
On top of that, VoIP services often include additional business features like call forwarding, advanced analytics, text messaging, voicemail to email, video conferencing, and more.
But perhaps the best part is that you can manage your entire system from one computer. No equipment, control rooms, distribution boards or cables are needed.
In terms of ease of use, Nextiva is one of the best. Within the dashboard, you can easily set up and customize your phone system, adjust call routing flows, configure voicemail settings, and add new user extensions with just a few clicks.
When you see terms like cloud PBX or IP PBX, these are VoIP solutions.
They offer all the features you'd expect from a traditional PBX system (and more), but they facilitate calling over the Internet rather than through a physical infrastructure.
The only difference between a cloud PBX and an IP PBX is where they are deployed. A cloud or hosted PBX refers to a system that is maintained, secured, and updated by your provider. All of the software that runs your phone system is hosted on their servers.
With IP PBX, it is deployed on servers that you own.
In short, VoIP, Cloud PBX, and IP PBX are modern phone systems with very few differences between them. PBX and traditional PBX generally refer to a traditional phone system that still uses physical wires and infrastructure instead of software stored on a server.
Advantages of VoIP vs PBX
When comparing VoIP to traditional PBX systems, it is clear that VoIP offers several important advantages that modern businesses cannot ignore.
1. VoIP saves you money
VoIP involves lower installation and operating costs than traditional PBXs. It eliminates the need for expensive hardware, deployment, maintenance, and long-distance call charges.
With a traditional PBX, you need a stable power supply, a large distribution board and cabinet, phone lines, and other equipment to make the system work. That alone can easily cost several thousand dollars, if not more.
On the other hand, VoIP requires very little hardware (if any). You can choose to buy IP phones and headsets, but it is not mandatory.
The only other cost you may need to consider is upgrading your Internet.
2. VoIP is much easier to scale
The best VoIP phone services are highly scalable, allowing you to add or remove users with a few clicks from your computer. You probably don't even need an experienced IT technician to make these changes.
With a traditional PBX system, scaling requires significant investments in hardware. You will need to add more phone lines and install new hardware as your business grows.
3. VoIP works well in remote environments
VoIP empowers remote work by allowing team members to make and receive calls from anywhere with an Internet connection. Your team can manage calls from their computer or smartphone, meaning they can work from anywhere.
Traditional PBX systems tie businesses to central offices due to the hardware and physical connections required.
4. VoIP offers more advanced features
VoIP phone systems offer many advanced features, including voicemail to email, call forwarding, video conferencing, IVR, text messaging, conference calling, team chat, call recording, and more.
Many VoIP software solutions also offer built-in analytics, giving you all the data you need to make better decisions.
Thanks to the variety of built-in collaboration features, many companies can do away with external team chats, video conferencing, audio conferencing, and text messaging solutions.
Traditional PBX systems won't give you the same luxury – you get some basic features and that's it.
5. VoIP providers take care of security for you
VoIP providers are responsible for at least high-level remote monitoring and real-time security alerts. They have a lot to gain from protecting and maintaining their data centers, including the software hosted there.
Additionally, most VoIP systems use strong encryption protocols to protect voice data traveling over the Internet. They are also typically protected with intrusion detection and custom firewalls to guard against external threats and unauthorized access.
With traditional PBX systems, you are responsible for securing your own system.
6. VoIP connects with other business applications
Most VoIP providers offer one-click integrations with other software – your CRM software, customer service software, and ERP systems, to name a few.
Let’s say a rep on your team gets a call from a customer. The system will automatically pull that customer’s data if it’s connected to your CRM. This allows your agents to deliver more personalized customer experiences.
Software integrations consolidate data from different communication channels into a single platform, making it easier to manage and analyze. This provides valuable insights into customer behavior, calling patterns, and performance metrics.
7. VoIP has built-in redundancies
VoIP providers have multiple data centers in different regions to achieve redundancy. In the event of an unexpected outage or failure at one center, traffic can be rerouted to another. This, in turn, minimizes downtime to keep the system up and running.
The biggest problem businesses have with VoIP is due to their own internet connection. When stability or bandwidth issues occur with the network, it is not uncommon to experience delays, echoes, and dropped calls.
That being said, VoIP systems tend to be much more reliable than PBXs.
Additionally, PBX issues are notoriously difficult to troubleshoot and repair. If you don’t have an experienced IT department to help you, you may need to call a technician. Every minute you wait for them to arrive, troubleshoot, and resolve your issues, your entire system is down.
VoIP installation over PBX
If you're considering using VoIP but your business already has existing phone lines, you don't have to throw your investment away.
SIP (Session Initiation Protocol) gateways act as a bridge between analog PBX systems and VoIP software. Adding SIP can help you begin migrating to VoIP, reduce costs, and give your team new features while continuing to use your existing system.
SIP trunking makes it easy to scale your system to the number of lines you need – you can easily add more without adding physical phone lines.
This way, you can scale at a fraction of the cost while saving on long distance and international calls.
