Where are we at right now?

The high price of PBX systems means that most companies cannot just instantly upgrade their system regardless of the advantages. As a result a lot of the older PBX systems are still in use today. But as the aging systems are beginning to wear down, companies have no choice but to replace the hardware. But instead of using the same PBX, most are looking to implement an IP PBX to take advantage of the benefits. Business executives are considering moving these solutions to the cloud to gain benefits that on-premise solutions cannot provide, no matter who the manufacturer is. Cloud-based call centers provide a significantly better total cost of ownership, enable maximum utilization of staff, and are more scalable and flexible than their on-premise cousins. Perhaps most importantly, the cloud supports a level of disaster recovery that is unparalleled with on-premise solutions.


Cloud PBX
Hosted private branch exchange (hosted PBX) is a telephone exchange that’s accessible over a cloud-based IP network system built, delivered and managed by a third-party service provider. It eliminates the need for building and managing an in-house PBX system. Hosted PBX is an IP-based telephony solution provisioned and accessed entirely through the Internet. Once a call is received, the hosted PBX routes that call to the corresponding client. Similarly, the client/customer connects to the hosted PBX using IP-based phones in order to make a call.

Hosted PBX may also be referred to as Cloud PBX or hosted voice. Hosted PBX is a solution that’s managed completely off-site, making it so businesses no longer have to invest in expensive infrastructure, software, and training. It is quickly set up and deployed, in some cases even granting users access in less than a day, and is primarily hands off when it comes to maintenance. It’s quickly becoming one of the most popular voice communication solutions for businesses today, because it cuts down on costs significantly while providing users with a suite of features that traditional PBXs could never compete with.

Now that you know what hosted PBX is, you might be wondering how it works. It’s actually pretty simple once you understand its essential functions.

How Hosted PBX Works
The Diagram below is a simplified flow of how the hosted PBX system (aka hosted VoIP) works:


With a traditional PBX, your office phone system connected to a standard phone line (known as PSTN or POTS). It used hardwired phone systems to send communication data, so your phone would typically rely on copper wiring running in and around the building to make sure everything was connected.
That all changed with the implementation of the hosted PBX that uses the internet to send data. It makes all that costly infrastructure of the past completely avoidable.
The data that travels over the IP network is sent to the cloud, where it gets to your voice providers platform, a platform that is mirrored across several different data centers. Once your call moves through the data center, it’s pushed back out into the cloud and delivered to your end caller over any network they use.

Traditional PBX vs Cloud PBX
But first, it’s important to understand the difference between hosted and traditional PBX so that you can make the right decision for your business.
A simple explanation of the difference between hosted PBX and traditional PBX is that the latter still requires the use of on-site equipment (hosted does not).
The major technical difference lies in how data is transmitted. For hosted PBX, this data moves through the cloud over an IP line, which makes IP PBX systems so much more flexible than older PBX. The consistent improvement of technology means that they are now much cheaper, much faster to implement and far more scalable than traditional PBX systems. Upgrading, adding and removing any additional features on your current IP PBX is also much easier compared to older PBX systems. Usually as easy as a clicking a software option that is available through your provider.

In older systems, you are limited to a certain number of lines as they are hard wired to the circuitry. With Cloud PBX, you can quickly add as many extensions as you want. Which is particularly beneficial for businesses that don’t yet know how they’re going to scale over time, because it’s flexible and easy to adjust when you’re still in a growth stage or seasonal. This includes remote employees or businesses that don’t have a traditional office space. Since calls are routed through the cloud, you can access a work line from virtually any device, anywhere in the world.

Which brings us to another point, one of the major challenges of a traditional PBX is the upkeep and maintenance required to care for a complex system. It isn’t always easy to determine where a problem originates; meaning whoever is in charge of the system could spend a considerable amount of time troubleshooting. Being in charge of a system like this can be a full time job. That means a company might spend a yearly salary on someone whose entire job is to understand the system backwards and forward, and constantly stay on top of changes, updates, and additions. This makes for an expensive challenge when you consider how much it costs to keep someone on staff.

In addition to needing a full-time employee to manage your traditional PBX, the startup costs are much higher than that required for hosted PBX. The hardware that comes with traditional on-premise call centers requires a certain amount of time to set up, especially when it comes to making sure that everything works according to plan. The more phones you rely on for the center, the more time you’ll need to get the system started. The amount of power required for installation may come into conflict with any other hardware you need for manufacturing and other aspects your business. Once up and running, maintenance and upkeep could be additional expenses that get tacked on year after year.

With cloud based call center software, however, installation is hyper simplified, often times ranging from minutes to a half-hour. This process doesn’t interfere with any other objectives you may have going on in the physical world, so you can have your more tech-savvy staff members take care of this part of your business.

And then, there’s the space. With phones that are still hardwired, you’ll likely need space on-site (typically a server closet) where your physical equipment and wired phone lines are housed.

The Benefits of Hosted PBX
The Quick List:
• Lower up-front implementation costs
• Lower overall support and maintenance costs
• The ability to route calls to any phone or device anywhere
• Supports distributed employees
• Easily scalable (it grows as your business grows) while a PBX system is limited to the designed number of slots
• Supports a very high call capacity
• The ability to add numerous special features
• Easily integrates connects with other UCaaS tools
• IP PBX can handle both calls and data
• Business Continuity

When comparing the two, you’ll notice that hosted PBX has a lot more benefits than what people expect from traditional PBX. That’s because there are a whole lot of them to choose from..

The Not So Quick List:

It’s Fast:

The best thing about the platform: You can change, install, add, and move change. How easy is this? All you have to do is type your username and password into the online platform and access a provider-based dashboard. Then, save your changes. TA-DA, your settings have been updated!


Unparalleled flexibility services are one of the many reasons why hosted PBX is growing so quickly with businesses. Not only does it come with a full suite of benefits and features, but it allows you to implement a VoIP solution that can revolutionize your business. With Hosted PBX a business can change their call settings in a flash. The same way an employee can log into an app and easily route their phone number to a new device; Hosted PBX makes accessing features like call forwarding, conference bridges, Caller ID, and Voicemail to SMS as easy as toggling an on/off button. To update features and settings for a traditional PBX, there was always a middleman. Businesses had to call voice providers to implement the options they wanted (sometimes at an additional cost to them). Now Hosted PBX has put the power of flexibility and total call control in the hands of the user.

Remote / Travel Employees:

One of the things that makes hosted PBX the top choice for many businesses is the flexibility employees have to work from remote locations. Sales, Engineers and management never have to be out of the loop. Employees can log into an app, set their phone number to remote mode, and immediately have their calls forward to any IP phone, cell phone, home phone, or laptop. VoIP makes it happen anywhere in the world. With an on-site call center solution, sending agents home and providing similar tools can be complicated and expensive. Remote users require not only a handset, but often a local gateway or device. The primary contact center location requires additional bandwidth, security devices and gateways to support them. And the entire solution requires management, maintenance and support. As detailed above, cloud call centers ignore geography, including the location of individual agents. Agents can route their office phone to their home phone, take a phone home and plug it into a broadband connection, even accept ACD calls on their Smartphones. And regardless of their location, their supervisor can monitor calls and manage their state.

A Service You Can Count On:

Businesses reliability is arguably one of the biggest benefits. Every lost call represents lost business. If there is anything that you can count on, it’s business disruption. Power will go out. Telecom and data lines will do down. Bad weather will make it difficult for employees to make it to the office. Trying to build sufficient Disaster Recovery and redundancy to account for each of these issues is an expensive and inexact science.
For Hosted PBX, since it’s not a physical landline or housed in an on-site server that can have a whole lot of problems, is virtually unstoppable no matter the natural disaster or physical damage that impacts a business year over year. With back-up options like failover redundancy or fixed wireless, businesses ensure the call center remains operable at all times. If a location is lost, for any of the reasons listed above, the cloud call center will continue to accept and queue calls, play messages, route calls to available locations, or fail over to home agents or cell phones without ANY action being taken by the business. Because of the flexibility detailed above, long term disaster recovery options are increased exponentially.

Fast Setup and Easy to Maintain:

Another important factor is the setup time and how easy the system is to maintain. Unlike traditional PBXs, hosted PBX can be set up within a number of days, sometimes even on the same day that you order it through your provider. Setup requires no on-site infrastructure (like server closets or data centers) which makes the entire solution easier to maintain.
You’ll remember that with the traditional PBX, it was sometimes necessary for a business to hire a full-time employee that was trained on the system and could make any necessary changes or troubleshoot problems. hosted PBX takes that need away, saving companies a full-time salary that otherwise would have been attributed to their telecommunication costs.

Saving Money:

It can be a difficult task finding a balance between saving money and providing quality services. When it comes to relying on the physical world to set up a business, this task is easier said than done. In addition to the phones and similar hardware you’ll need in this case, costs come from setting up the technology to work correctly.
This is not an issue with cloud call centers, as you will only need a strong Internet connection to keep the system working, as well as a limit on usage. With no money spent on hardware, you can keep a budget handy for products, events, and other future projects that can boost your business
A typical business “oversubscribes” the number of telephone lines or call paths it pays for on a monthly basis. This means that a business with 100 employees will typically purchase 20-25 lines to cover the number of people on the phone at any given time. For call centers, which are largely in the business of queuing calls to wait for an available agent, the oversubscription works in reverse. The business must have a line available for every available agent, plus additional lines for calls that are queued. One hundred agents could require 200 or 300 lines.

How does a business know if they have enough lines? Quite simply: It doesn’t. If more callers are hitting the main number than they have lines available to queue them, the carrier returns a fast busy to the end customer. Meanwhile, the business has no idea that occurred because the call never reaches its phone system.
With a cloud-based call center solution, calls will queue in the service provider’s architecture and not on the local phone system. Cloud call centers enjoy unlimited scalability to meet their peak periods and only require enough bandwidth to support the number of agents on the phone at any given time. As a result, the business can generally cut its traditional telecom expense (PRI, POTS, T1) by more than 75 percent.

Monitoring Performance:

Knowing how you’re performing in different aspects of your business is important for figuring out where you need to make improvements. While traditional hardware makes it harder to keep an eye on how your products are performing and their satisfaction rates, the digital world makes this information easy to access and narrow down.Cloud-based systems can lend a great hand in this area, especially with call centers, as they can show how agents communicate with customers so that they can better deal with dilemmas. Companies can also figure out what issues need more attention and which ones have been solved.


Many businesses have periods of higher-than-usual traffic. To accommodate retail seasonality, a business event or a new product release, businesses are often forced to add agents and the underlying equipment, licensing and phone lines to meet customer demand. Unfortunately, this creates periods of time when the business is carrying expense or equipment that it does not require over the course of a year.
As previously detailed, cloud services are generally delivered as a “per user” or “per feature” monthly expense, affording businesses the opportunity to increase and decrease costs with seasonality and growth, while ensuring that a call is not missed due to call capacity limitations.

Try it Before you Buy it:

What about the features that call center staff are clamoring for?
Since services are provided on a subscription model, businesses can try out new functionality without spending a great deal of time or money. And since the vendor has to prove its worth every month, rather than every seven to 10 years, businesses can rest assured that innovation will continue throughout the length of any agreement.

Lower Total Cost of Ownership:

Call center businesses, more than others, are subject to the “hamster wheel” of technology investments. Equipment and software used by the call center must be purchased or leased, depreciated, patched for bugs, upgraded every year or two, maintained by on-site staff, and eventually, replaced. And despite the efforts of the IT team, these expenses are often not predictable. In contrast, Cloud services are generally delivered as a “per user” or “per feature” monthly expense, without upfront capital expenditures. Given the lifespan of most on-site equipment, a lower TCO can easily be realized over five, seven or even 10 years.



The Obligatory Graphic:

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