In the past traditional PBX systems were large, expensive and hard to maintain. Often a company would retain a telecommunications company to manage this for them. In contrast – today we are finding more often than not, that these bulky systems have moved to the cloud. With this move, cost has drastically been reduced and there is now no headache of updates or upgrades – that is now left to the cloud provider to manage.
Let’s quickly examine the differences.
Internet telephony is not a new technology — it’s been around for many years, but only recently has it become reliable and ubiquitous enough to be a serious choice for business. While Internet telephony was once an oddity often plagued for garbled and dropped calls, these days a well-planned and implemented VoIP system can provide call quality and reliability that rivals mobile phone or landline calls.
To understand how VOIP works, it’s helpful to compare it to how conventional phone calls operate. When you place a “regular” phone call using the Public Switched Telephone Network (PSTN), also known as Plain Old Telephone Service (POTS) you use what’s called circuit-switched telephony. This system works by setting up a dedicated channel (or circuit) between two points for the duration of the call. These telephony systems are based on copper wires carrying analog voice data over the dedicated circuits
This is in contrast to newer Internet telephony networks based on digital technologies. VOIP uses what is called packet-switched telephony. Using this system, the voice information travels to its destination in countless individual network packets across the Internet. This type of communication presents special TCP/IP challenges because the Internet wasn’t really designed for the kind of real-time communication a phone call represents. Individual packets may — and almost always do — take different paths to the same place. It’s not enough to simply get VOIP packets to their destination. They must arrive through a fairly narrow time window and be assembled in the correct order to be intelligible to the recipient. VOIP employs encoding schemes and compression technology to reduce the size of the voice packets so they can be transmitted more efficiently.
PBX (Public Branch Exchange) is a miniature telephone network that is set to work within a company while providing several lines to an external phone company where calls can go in or out. Companies utilize a PBX in order to minimize cost. Instead of having a single telephone line for every office or department which are only used for a fraction of the time, the company can reduce this to a few lines with the use of PBX while still having a telephone unit in each office. All internal calls are routed internally while calls to the outside take any of the available outside lines.
Most PBX systems are not equipped to handle VOIP calls because they were created and perfected before the advent of VOIP. But the advantages of implementing VOIP services in a PBX system has motivated companies and manufacturers to develop IP PBX systems.
Utilizing VOIP in a PBX system can result in a seamless integration where users can use the same phone to dial outside numbers or call a branch office in another country via VOIP. An advanced PBX system can lessen the phone bill of a company by such a huge margin that most companies who needs to replace their older PBX systems have opted to add VOIP support by purchasing and installing an IP PBX system.
As you can see by the convergence of these technologies now any company or individual can own a PBX system, or more properly – a Virtual PBX system.
So what is the difference between VOIP and Virtual/Hosted PBX? Well for one VOIP is a type of service and how your call travels from point-to-point. By contrast, Virtual/Hosted PBX is a phone exchange that handles several incoming and outgoing phone lines with a suite of features like, call forwarding, hold, call parking, music on hold, call transfer and the list goes on. We’ve all seen VOIP commercials on TV from Vonage, Verizon and the like. These commercials are directed at individuals because they are limited in feature sets and mostly just VOIP. I for one have not seen any TV commercials for Virtual/Hosted PBX services.
In summary – the cloud makes perfect sense for Virtual/Hosted PBX systems and is a natural progression. VOIP has forge the path to the clouds doorstep. Now – small business can afford the same complex and enterprise business solutions at a faction of the cost. We have installed numerous traditional PBX’s back in the day. They are expensive, companies would spend upwards of $50K for a PBX system, then have to also pay the local and long distance fees charged by phone companies. In todays Virtual/Hosted PBX and VOIP world, cloud providers charge a flat-rate per line per month. We charge $35 per line and the user can use their own software or phone, or $65 per month and we will provide a Polycom Smartpoint 321 phone. Local and long distance fees included, but not International charges. These fees are flat-rate fee per month per phone. So think about this – if you are a small company that needs 5 phones, then you would pay $325 per month, plus or minus a few additional features you may choose. In the traditional PBX realm, I see customers paying over $1700 per month for the same setup, plus maintenance fees.
In Closing – only you can decide if Virtual/Hosted PBX and VOIP is right for you. It sure is less expensive, from a 50% – 80% savings over your traditional phone bill. As well – you don’t have to purchase hardware and software, figure out some where to store it and pay staff or consultants megabucks to manage and maintain it. All companies can easily and greatly reduce their cost immediately. On last thing – it’s mobile. Meaning if you move your offices from one location to another, you don’t have to worry about dragging your old PBX system along. Once you move, just connect your phones back into the Internet and you are set, nothing changed. As well – you can answer calls from your computer, your handset and even your smartphone.