When evaluating your options for a private branch exchange, you will often come across the terms: cloud PBX and on-premise PBX. What is the difference between the two services and how do you decide which one you need?
Getting the Right PBX System for Your Business
A PBX, or private branch exchange, is a private telephone network. A PBX system makes internal call management easy and ensures smooth collaboration between different teams and departments within a business.
There are two common types of private branch exchange systems: Cloud-Hosted and On-Premise. And choosing between these two systems depends on a few factors:
- What do you need from your phone system?
- Do you want to connect multiple office locations through the system?
- What communication features do you need?
- What is your budget?
- Do you have or need to hire an IT team?
- The answers to these questions can help you determine which phone system is right for you.
What is a Cloud Hosted PBX?
A cloud PBX is what it sounds like: a private phone exchange that works over the cloud. This means that it does not need a physical space in your office. The host will take care of the maintenance of the system and all you need to do is use it.
You will not have to worry about installing any hardware, saving office space for the system, or high maintenance costs. You won’t even need an on-premise IT team to handle all of it. However, you might not have as much control as with an on-premise system.
How Does an On-Premises PBX Work?
An on-premise PBX system is installed on company premises. This type of phone system is installed, run, and maintained by your company. You might need an experienced IT team to handle such a system.
Choosing Between Cloud PBX vs On-Premises PBX
The bottom line is that if you want a system that is wholly controlled and managed by your in-house IT team, then an on-premises PBX is the choice for you. However, if you don’t want to worry about the hassle of running and maintaining your phone system, then go with the system that’s hosted in the cloud.
Here are the other main differences between the two:
| Cloud Hosted PBX | On-Premises |
| Hosted by your provider | Operated on-site by you |
| Little to no control over how it operates | Controlled and managed fully by you |
| No physical space needed | Physical space needed |
| No installation or maintenance needed | Needs to be installed and maintained regularly |
| No professional IT experience needed | Needs an experienced IT team to operate the system |
| Uses VoIP tech; Needs a broadband connection | May use VoIP tech |
| Low monthly costs; No installation costs | Low monthly costs; High installation costs |
| Variety of virtual calling features | Limited calling features |
| Scalable as needed | Limited scalability |
| Recommended for small to medium-sized businesses | Recommended for large corporations |
United World Telecom Knows About PBX Systems
United World Telecom has the PBX solutions you need for your business. You can also choose to set up your own IP-PBX system. This way you can take full advantage of SIP to place calls over the internet. Doing so results in better international calling rates at higher scale.