Hosted and virtual PBX systems – Similar, but not the same

Hosted and virtual private branch exchanges, better known as PBXs, share some of the same technologies but are operationally very different.

South Africa has lagged in the development of hosted and virtual PBXs because the carrier, voice over IP (VoIP), was illegal for many years. It was only legalised on 1 February 2005 after many years of agitation by the industry.

Today VoIP and IP telephony are becoming increasingly popular, mainly because of significant cost reductions and the wide range of state of the art new facilities that IP offers.

For many, internet protocol (IP) is more than just a way to transport data, it is the foundation for advanced unified communications applications including web and video conferencing.

But even though it was legalised in 2005, it took quite a few years to take off. At the time mobile operators had structured their data charges in such a way that VoIP telephony was unaffordable.

They did not want to carry digital voice in fear of negatively impacting on their GSM voice business. But that has all changed now.

VoIP refers to a way of carrying phone calls over an IP data network, whether on the internet or an internal network. The primary attraction of VoIP is its ability to help reduce expenses because telephone calls travel over the data network rather than the phone company’s network.

Businesses are using IP telephony across their own managed private networks because it allows them to better handle security and service quality.

Using their own networks, companies have more control in ensuring that voice quality is as good as, if not better than, the services they would have previously experienced with their traditional phone system.

However in practise this is not always the case. As company networks carry other service it is important that voice services are prioritised over for example data and email. Failing to do so will reduce the quality of voice calls, often becoming unintelligible.

Virtual PBXs and hosted PBXs share some of the same benefits that include providing lower cost services than traditional on premise PBX systems.

However, the two are significantly different in the way that they function and the benefits that they can provide for businesses.

Search for any of these terms and you will find that they are used interchangeably on websites, blogs and within search engine results.

This results in much confusion in the industry with businesses ultimately not making the right decision when retiring their on premise equipment.

According to Sarah Dingman, Versature’s senior marketing specialist, the difference between hosted and Virtual PBX’s – as stated in her blog – is that a Virtual PBX service answers calls for the business and provides routing options.

The calls are forwarded on to employees or locations anywhere in the world. With Virtual PBX, the various employees and locations each require separate phone service, whether that be a cell phone or land line.

As Virtual PBX services only handle the incoming aspect of the businesses’ telecommunications needs, there is limited value here, which is why the service is normally priced extremely low.

There are few barriers to entry which means there is a ton of competition in this space. In my opinion, this service is well suited for micro-businesses of less than five employees, startups working out of their home offices, or for those businesses where the bulk of the employees are on the road. As the business grows, it is inevitable that it will outgrow the Virtual PBX service and will need to replace it.

Dingman says that a hosted PBX is a complete, enterprise-level business phone system while a virtual PBX system although part of a hosted PBX and is not exactly a full voice communications system by itself, and that these systems allow businesses to transmit incoming calls and route them to the appropriate person in addition to providing them with an automated answering service.

Calls may be routed to VoIP extensions, cell phones or landlines that can provide outbound calls in addition to inbound routing.

A hosted PBX provider will usually completely replace an organisation’s existing telephone company. Many of the hosted systems require changing to using IP phones, and all voice communications will go through a router that is connected to a broadband internet connection.

These systems are ideal for companies that are geographically dispersed and have more than one location as they provide a main number that handles all incoming calls. From the main number, outside parties are able to reach the person who they are trying to speak with using extension dialling.

In addition, a hosted PBX will generally provide companies with things like auto attendants, conference calls, call holding, voicemail to email messaging and call forwarding.

This is essentially a complete solution that mimics a physical PBX but comes at a much lower cost as companies are able to take advantage of SIP trunking and calling that is cheaper than what they would pay with a traditional phone company.

There are many blogs written about the subject, but they all say more or less the same thing. There are however a few things to keep in mind before making the change.

Does your company have enough bandwidth available? A simple connection to the internet will not necessarily do the job.

Other question to ask are about the service provider itself, the connectivity to the provider, the value the VoIP product adds to your business and your financial relationship with your service provider. Do they have a trusted track record with their current client list? Cross-check their references and ask for a demo.

It is too easy to download an open source PBX from the internet and install it on a single server without backup in a location with frequent power cuts, so you should probably check up on their hosting situation too.

EE Publishers

Now read: Euphoria Telecom Cloud PBX – No Internet required

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Hosted and virtual PBX systems – Similar, but not the same