A reliable and feature-rich phone system is essential for effective business communication.
When choosing a business phone system, there are two main options: PBX (Private Branch Exchange) and VoIP (Voice over Internet Protocol). PBX uses traditional phone lines and hardware, while VoIP transmits voice data over the internet. The terms PBX and VoIP seem to cause a lot of confusion. Too many articles treat these two things as if they are the opposite of one another. That’s not quite true.
What do you think when you see the phrase, VoIP vs PBX? You may think that they are a binary choice, and two different types of communications.
Let’s clear up the confusion. Here, we’re going to provide an easy-to-understand definition of both terms, then explore how they are actually related.
Table of Content
- What is PBX?
- What is VoIP?
- What is VoIP PBX?
- VoIP vs. PBX: Why Do People Compare PBX and VoIP?
- VoIP vs. PBX: What is the Key Difference?
- VoIP vs PBX: Why VoIP Phone System over Analog PBX?
- hoosing Between VoIP And PBX
- How To Choose The Right VoIP PBX Phone System?
- Yeastar VoIP PBX for Business of All Sizes
What is PBX?
PBX, short for Private Branch Exchange, is a business phone system that links office desk phones within the same network. It enables employees to make free calls to each other and transfer calls seamlessly. By utilizing extensions instead of physical phone lines, a PBX phone system optimizes resources by allowing multiple phones to share fewer lines. This setup also ensures that the voice network and data network of a company remain separate from each other.
However, with the emergence of IP telephony and the growing shift away from ISDN and PSTN, traditional analog phone systems are becoming outdated.
What Is VoIP?
VoIP is an acronym for Voice-over-Internet Protocol. It’s simply a technology used to transmit voice data via an internet connection. A VoIP phone system takes your voice, turns it into file data, compresses those files, and then converts those files into packets of data. All of this happens in real-time. It’s virtually instantaneous. These packets are sent over the internet to a VoIP provider. The provider converts them back and sends them to the other phone.
Even though many things are happening during this process, a VoIP call is just as fast as an analog call.
People who were around when this technology emerged may be suspicious of it. Initially, VoIP providers had a difficult time successfully completing even a low level of service. That’s changed today. The sound quality of VoIP might be affected by the bandwidth and the device used. However, most VoIP providers now offer various different protocols and codecs to ensure HD audio quality.
A VoIP PBX can also work fine for businesses of many sizes, not matter small and medium-sized companies or large enterprises.
So What is VoIP PBX?
VoIP PBX is a phone system that works similarly to standard PBX. The difference is that it makes use of a wide area network or local area network instead of the traditional switched networks used in older public switched telephone networks (PSTN) systems. It is also known as IP PBX.
A VoIP phone system can use VoIP to switch phone calls on local lines, between a VoIP user and a landline user, or between two traditional telephone users. IP PBXs can be set up using hardware, or consist entirely of installed software.
Besides on-premise VoIP solutions, there’s another option known as a hosted PBX solution. This is cloud-based and offered up by business VoIP providers. Hosted PBX offers virtually the same features, but doesn’t require complex on-site installation and equipment.
Why Do People Compare PBX and VoIP?
The term PBX may have different definitions for different people. Some people think that PBX is the same as traditional PBX, while others think that PBX is actually another term for the business phone system.
When most people compare VoIP with PBX, they actually want to compare PBX systems like VoIP PBX, IP PBX, hosted PBX with PBX systems like analog PBX, TDM PBX, and proprietary PBX. Next, we will show you their differences and the pros and cons of each type of PBX system.
What Is the Difference Between VoIP and PBX: A Complete Overview
| Feature | VoIP | PBX |
|---|---|---|
| Connection Method | Utilizes internet connection (IP networks) | Uses traditional landlines (PSTN/PRI) |
| Cost Structure | Lower initial and monthly costs | Higher upfront costs and ongoing expenses |
| Scalability | Easily scalable with minimal investment | Complex and costly to scale up |
| Features | Advanced features (video calls, integration) | Standard telephony features |
| Maintenance | Managed by service provider, remote support | Requires in-house IT staff for maintenance |
| Security | Vulnerable to internet threats, but secure measures available | Less vulnerable to internet-based threats |
PBX vs. VoIP: Key Differences in Detail
Technology and Infrastructure
PBX (Private Branch Exchange) is a traditional phone system that connects to the local Public Switched Telephone Network (PSTN) using landline connections. This means that PBX requires dedicated hardware, specifically PBX equipment, to route calls over these traditional phone lines. It may also include additional devices like desktop phones. To support a high volume of calls, businesses need a significant number of analog phone lines and typically require a full-time IT staff member on-site to maintain the necessary physical hardware.
In contrast, VoIP (Voice over Internet Protocol) uses the internet to transmit voice calls by converting analog voice signals into digital packets. This allows VoIP systems to make calls using just an internet connection, resulting in less hardware being needed. VoIP service providers usually handle system maintenance and upgrades.
PBX systems manage calls using traditional fixed phone lines or Primary Rate Interface (PRI), often operating on a separate network from the company’s primary internet connection. On the other hand, VoIP utilizes the existing internet connection and network infrastructure, such as Ethernet, to transmit voice data. Typically, VoIP calls require about 100 kbps of bandwidth per line. But please note that there is no speed difference between PBX and VoIP systems.
Call Routing
VoIP routes calls over the internet or a local network. They can connect with other VoIP systems directly or interface with traditional phone networks using gateways. PBX systems route calls through physical phone lines connected to the public switched telephone network (PSTN). They utilize extensions and internal routing to direct calls within the organization.
Cost
When comparing the costs of VoIP (Voice over Internet Protocol) and PBX (Private Branch Exchange), there are several important differences to consider.
VoIP generally has lower initial setup costs, typically ranging from $200 to $1,000 per user for necessary equipment like IP phones and software. In contrast, setting up a PBX system can be much more expensive, often starting at around $7,000 and potentially reaching $25,000 to $50,000 for larger installations. Monthly costs also differ significantly; VoIP subscription fees usually range from $20 to $50 per user, and many plans offer unlimited calling. On the other hand, PBX systems tend to have higher ongoing expenses due to maintenance, licensing fees, and charges for traditional phone lines.
Scalability is another factor—VoIP systems are easy to expand by simply adding more users at a low cost, while scaling a PBX system can be complicated and costly because it often requires additional hardware. Additionally, VoIP maintenance is typically included in the subscription fee and managed by the service provider, whereas PBX systems usually require an in-house IT staff for upkeep, which adds to overall costs. Additinally, VoIP often includes many advanced features in its plans, while PBX may offer limited features that often require separate purchases or upgrades. Overall, VoIP is generally more cost-effective and flexible, making it an attractive option for many businesses compared to traditional PBX systems.
Available Features
PBX systems typically offer basic telephony features such as internal extension dialing, call transfer and forwarding, voicemail, caller ID, and conference calling. These features allow users to communicate effectively within the organization but are generally limited in scope. PBX systems are often location-dependent, which means they do not support remote work or mobile integration without additional hardware or software.
In contrast, VoIP systems provide a much broader range of advanced features. Alongside standard calling capabilities, VoIP includes options like auto attendants (virtual receptionists), interactive voice response (IVR) systems, voicemail-to-email transcription, call queuing, and more. VoIP also supports SMS and MMS messaging, allowing businesses to communicate via text—a feature that PBX lacks. Additionally, VoIP solutions often integrate seamlessly with customer relationship management (CRM) systems and other digital tools, enhancing overall functionality and flexibility.
Maintenance
VoIP and PBX systems differ significantly in maintenance needs.
PBX systems require a lot of in-house IT support to manage hardware, perform updates, and troubleshoot issues on-site. If something goes wrong, it can lead to service interruptions that need immediate attention. In contrast, VoIP systems are usually managed by the service provider, which means businesses don’t need as much internal IT help. Most maintenance tasks, including updates and troubleshooting, can be handled remotely, resulting in quicker fixes and less downtime. Overall, VoIP is easier to maintain than traditional PBX systems.
Security
PBX systems are generally more secure against internet-based threats because they use traditional phone lines and are not connected to the internet, reducing the risk of cyberattacks. However, they can still be vulnerable to physical access and toll fraud.
In contrast, VoIP systems operate over the internet, making them more susceptible to cyber threats like hacking and eavesdropping. To protect against these risks, VoIP providers often implement security measures such as encryption and firewalls, but the effectiveness of these measures can vary. Overall, while PBX offers some inherent security advantages, VoIP requires strong security protocols to safeguard communications.
Reliability
PBX are generally more reliable because they do not depend on an internet connection; they use traditional phone lines, making them less susceptible to disruptions caused by network issues. This makes PBX a better choice in areas with unstable internet. However, PBX can still face challenges such as power outages or hardware failures.
On the other hand, VoIP relies entirely on internet connectivity, which means its reliability is contingent on having a stable and high-speed internet connection. In cases of poor connectivity, VoIP calls may experience issues like dropped calls or delays. Overall, while both systems have their strengths and weaknesses, PBX typically offers greater reliability in environments where internet service may be inconsistent.
VoIP vs PBX: Why VoIP Phone System over Analog PBX?
VoIP — Lower Initial and Operational Costs
Landlines generally cost much more than VoIP solutions. Let’s start with the installation. Landline setup is usually charged a certain amount of money, while SIP trunking used in VoIP solutions requires little or no setup cost.
More importantly, since the calls are transmitted over an IP network, monthly service fees and calling rates are much lower for IP PBX users. The cost of internal calls could be reduced to almost none. You can also have a significant amount of expense from International and mobile calls typically.
VoIP — Mobile Team Support
Many VoIP PBX service providers offer mobile, web-based, or desktop softphones, which can turn your cell phone and computer into an office extension just like a desktop phone. This is very useful for multi-location offices, the remote workforce, on-the-go employees, and field workers. Traditional PBX phone systems are simply unable to support BYOD (Bring Your Own Device) mobility and help users break geographical boundaries. It just can’t adapt to the upward trend of hybrid work.
VoIP — Advanced Telephony Features & UC Solution
Traditional PBX generally only comes with limited basic features, and even if some systems can provide more, they usually require a lot of additional fees. IP PBX, on the contrary, offers a range of advanced telephony features like IVR, queue, voicemail, call recording, etc. They can even be license-free, depending on your service provider.
Better yet, VoIP solutions make it possible for you to embrace unified communications. This way, you will be able to enjoy more communication channels and functions, such as video conferencing, instant messaging, presence, CRM integration, etc. This is a major step toward digital transformation for any business.
VoIP — Easier Installation & Management
Compared to analog PBX phone systems, IP PBX systems are not only more user-friendly but also easier to install, configure and manage. With data and voice delivered on the same network infrastructure, you can not only reduce costs but also save a lot of time in the equipment installation and wiring of physical telephone lines. Some analog PBX phone systems can only be managed via complex commands that are proprietary to each vendor. In contrast, IP PBXs often provide an intuitive web-based management interface that allows IT staff to quickly and easily configure the VoIP system and its many features.
VoIP — IP Phone Compatibility
Phones supported by analog PBX systems are usually very limited. Analog PBX phone systems usually require proprietary phones from the same vendor, which means you are locked into that one vendor and unable to use other solutions. A decent IP PBX provider usually offers a highly compatible PBX phone system that allows you to plug and play most mainstream IP phones as well as use analog phones via VoIP gateways. Better yet, they also provide softphones to make web browsers, your mobile phone, and your computer as SIP endpoints.
VoIP vs PBX: Choosing Between VoIP And PBX
When choosing between VoIP (Voice over Internet Protocol) and PBX (Private Branch Exchange) systems for your business, it’s essential to consider several key factors. This guide will help you make an informed decision that aligns with your needs and budget.
Business Size and Budget
- Business Size: Different businesses have varying communication needs. Small businesses may prefer the cost-effectiveness and scalability of VoIP, while larger organizations might require the robust features of a PBX system.
- Budget Constraints: Evaluate your initial investment and ongoing costs. PBX systems often involve significant upfront expenses for hardware and installation, whereas VoIP typically offers lower monthly subscription fees. Ensure that your choice fits within your financial plan.
Features You Need
- Basic vs. Advanced Features: Identify the essential features you require, such as voicemail, call forwarding, or conferencing capabilities. VoIP systems often provide advanced functionalities like video conferencing and CRM integrations, making them suitable for dynamic work environments.
- Customization Options: Check if the system allows customization based on your specific requirements. VoIP providers usually enable quick additions or removals of users, while PBX systems may be less flexible.
Your IT Team Expertise
- Technical Support: Assess whether your team has the technical skills to manage and maintain the chosen system. PBX systems often require dedicated IT personnel for installation and upkeep, while VoIP solutions are typically managed by the service provider, reducing the need for in-house expertise.
- Training Needs: Consider whether your employees will need training to adapt to a new system. Opt for a solution that is user-friendly and offers adequate support resources.
Growth Rate of Your Business
- Growth Potential: As your business expands, you may need to add new users or features. VoIP systems allow for easy scaling through software updates, while PBX systems may require additional hardware and time to accommodate growth.
- Remote Work Support: If your team works remotely, VoIP is advantageous as it can be accessed via smartphones or laptops. In contrast, traditional PBX systems primarily rely on desk phones.
Security Considerations
- Data Protection: Consider the security measures in place for each system. While traditional PBX systems are less exposed to online threats, modern VoIP providers implement strong encryption and security protocols to safeguard communications.
- Disaster Recovery Plans: Ensure the chosen system has contingency measures in case of outages or network issues. Many VoIP providers offer backup power options and redundant connections to maintain service continuity.
How To Choose The Right VoIP PBX Phone System?
When choosing an enterprise phone system, you usually need to consider a variety of factors such as the size of the business, IT staff resources, and your requirements in functionality. Review the following to explore which business VoIP system is the best choice for your company.
Is your company’s network connection stable enough?
As mentioned before, with the phasing out of ISDN and PSTN lines, today’s future-proof business phone systems use mostly VoIP technology, which requires a stable and fast internet connection. This is the very first thing you need to confirm before purchasing any IP PBX. For areas with limited landline or SIP connection, VoIP GSM/3G/4G Gateway could the best alternative for business communications.
Do you have in-house IT staff to manage and maintain the PBX system?
The answer to this question greatly influences your choice between an on-premise IP PBX and a cloud PBX system. If you have technicians with the required expertise and you prefer the maximum control over your business phone system, an on-premise IP PBX is a great choice. However, for small businesses or start-ups lacking in IT resources, it will save you a lot of effort to choose a hosted voice solution and have it is taken care of by your service provider.
Does your company has any significant staffing changes in the near future?
Analog PBX phone systems are usually more costly and cumbersome to add lines and new users while VoIP phone systems are much easier to scale. Particularly, cloud PBX systems are more flexible for companies with staff growth or reduction over the course of the system’s lifespan. The number of extensions may be increased or decreased instantly, and you only need to pay for what you require. It is particularly beneficial for seasonal businesses with fluctuating communication needs or start-ups that are experiencing rapid growth.
Does your business operate in multiple locations?
If so, you may come across this question – “does it matter if I opt for on-premise or cloud-based PBX? While both phone systems can support organizations with multiple locations, they are implemented differently. Cloud PBX makes it easier to connect headquarters, branch offices and dispersed telecommuters under the same phone system. Some on-premise PBX providers also offer a variety of multi-site solutions, such as Yeastar Remote Access Service.
Yeastar VoIP PBX for Businesses of All Sizes
Yeastar VoIP PBX is a versatile solution designed to meet the communication needs of businesses of all sizes. Whether you are a small startup, a growing mid-sized company, or an established enterprise, Yeastar offers a feature-rich and scalable VoIP PBX system that can adapt to your evolving requirements.
Go beyond just a PBX with all communications integrated as one. Yeastar business VoIP phone system is available as cloud, hardware, or software solution to your preference. With it, you can enjoy advanced telephony features, roubust call center solution, omnichannel messaging experience and more. Also, the VoIP phone system emphasizes ease of use and management, making it accessible even to non-technical users.
Interested in it? Get instant access to the VoIP PBX system and the full feature set with a 30-day free trial and there is no commitment to get started.
