Business VOIP vs Traditional PBX Systems

Communication has always been essential for business, and it’s basically business that drives the best and fastest developments in the world of communications, from traditional methods like postal services to the telegraph, telephone lines, fax machines, and now VOIP, which allows you to communicate without the need for traditional telephone lines at all. Today, VoIP is the standard for business communication, whether you’re talking about in-house teams of employees, remote workers, or even talking to your customers. Try our #1 recommended VOIP service and see what the hype is about!

Business VOIP vs Traditional PBX Systems

The question is really this: are you better off with a cloud-based phone system and VoIP phones, or should you make calls with PBX hardware and a traditional service provider? Today, we’re covering the two important types of phone number systems: VoIP vs PBX. We’ll explain the acronyms, how each works, what kind of pricing and costs you can expect, what the differences are, pros and cons, and a lot more. Keep reading to get all the information you need on these cutting-edge technologies. 

Technology of Modern Communications

About VoIP

The term VoIP stands for voice over internet protocol, and, as the name suggests, it’s a virtual phone system that uses the internet, not the traditional copper wires of a PSTN, to send and receive your calls. You might also hear VoIP phones referred to as online calling, IP telephony, or virtual telephony. If you can remember voice over internet protocol, you’ll never forget what this refers to.

The biggest benefit to VoIP over PBX is the easy mobility. You don’t need an in-house phone system to get VoIP to work. You can accept and receive calls, internally and externally, no matter where you go, without having an in-house phone system set up. Anywhere with a decent internet connection (read: a minimum of 100 kbps bandwidth) is a place where you can make and receive VoIP voice over internet phone calls.

A VoIP system is also great because it can be used on any device. Take calls on your cell phone using mobile apps available on Apple and Android phones. Use your desktop computer, laptop, or tablet. You can even set up a traditional-style business phone in the office and use that if you like the feel of a phone in your hand.

How VoIP Voice Over Internet Works

Let’s quickly discuss how this all works before getting into the advantages and disadvantages or what you’ll need for these different business phone systems to work.

When you start a call, the audio of your voice first gets broken up into a huge number of little data packets. These get sent over the data network via the internet, and they’re scrambled along the way. This scrambling allows them to be sent more efficiently, but it also keeps anyone who might be trying to listen in from making sense of what they hear. 

Of course, you don’t want the person on the other end to hear nothing but gibberish, so those packets need to come back together, and in the right order, before they reach the person on the other side of that call. The VoIP solution takes care of that for you, and then the same thing will all happen in reverse as the person on the other side of the connection replies.

Summarizing VoIP

Let’s do a quick summary of VoIP: refer back to this section at any time if you’re trying to get your head around the details. In short, VoIP:

  • Can be used anywhere you have a decent data connection

  • Can be used to make calls on nearly any device

  • Works with your in-house team, remote workers, or customers

  • Uses an internet network to send and receive voice communications

About PBX

The acronym PBX stands for private branch exchange. This is an in-house communications system that uses a traditional PSTN phone system to send and receive voice calls. It’s a lot like your old landline phones, but the hardware and service are a bit different. Like a traditional phone service, it uses circuit switching and copper wiring, but unlike a traditional service, it is specifically designed to facilitate business communications by essentially allowing your company to own and run its own private branch exchange. You’ve got your own, private telephone data network, sort of: it just uses wires.

What does this mean? It means that with PBX systems and hardware in place, you don’t need to pay your local telephone service for every extra line or phone number you need to put in. You also keep control of your phones and system and can keep the whole thing right in your office building, where you can keep an eye on it and ensure maintenance is being done right. 

These systems are scalable, though with difficulty, and can be cost-efficient only for a very large business. They also allow for many users. The biggest downside, as you can imagine, is that you have no real mobility here. Your whole system is connected to a physical location. Your phones are all in one place, and you can only make and take calls in that location. You can only use an individual phone that is connected to the system itself. If for some reason you have to leave that location, solutions are limited.

Summarizing PBX

Here’s a quick summary of the PBX systems, and, again, if you’re trying to keep the advantages and disadvantages or differences between PBX and VoIP phone lines in mind, refer here to refresh your memory quickly. PBX systems:

  • Rely on on-premises hardware systems, much like a traditional phone

  • Are scalable and allow you to install new phone lines whenever needed

  • Are essentially a private branch exchange without the need for a service provider

  • Are tied to one location for all calls

What’s PSTN?

We’ve mentioned PSTN a couple of times, so let’s quickly explain what this traditional system is all about. The acronym stands for public switched telephone network, and it’s a legacy system that is in the process of being decommissioned worldwide. Most countries will have phased out these phones and their lines by 2030. You might hear these referred to as traditional landlines or even as the POTS: the plain old telephone system.

This system uses copper wires to connect callers and transmit voice data from one phone to another, and, since it doesn’t rely on an internet connection, it can be used even during a power outage. Of course, the big downside is that it costs money to maintain these lines, and the phone systems that work with them are tied to one place. You can’t use a cell phone with this traditional system, of course. Traditional PSTN also doesn’t support key modern business communications needs, like call recording, intelligent call routing, conference calling, and more.

By understanding what PSTN is, you can begin to see one of the potential downsides to standard PBX systems. Anything that relies on the old copper wire protocol is likely to be outdated in the not-too-distant future. Of course, traditional systems maintained by a traditional service provider will become legacy faster than PBX hardware, which can be maintained by the business running the traditional PBX lines, but, eventually, in the PBX and VoIP wars, PBX is likely to lose simply by becoming outdated.

Let’s now consider business VoIP vs traditional PBX in an overview of the two and what their key differences are.

Standard PBX vs Business VoIP: An Overview

Of course, the biggest difference between PBX vs VoIP is that the PBX system uses traditional phone lines to send and receive calls over copper wire, ultimately via connection to the PSTN, while a VoIP solution uses an internet connection to get calls and data through.

That said, there are some PBX systems that are hosted in the cloud, and these can overcome some of the disadvantages of PBX phone lines; however, for the purposes of this article, we’ll just be discussing PBX systems that are actually on the premises of a company.

Let’s consider a basic outline of the differences between these two systems. Then we’ll get into a more detailed comparison, pros and cons, costs, hardware solutions, and more.

PBX vs VoIP: Costs

Traditional PBX

  • Software licensing: Between $3,000 and $4,500

  • Installation: Between $1,000 and $1,500

  • Hardware and equipment: Between $5,000 and $9,000 for 15-20 users

  • Maintenance: Between $3,000 and $4,000 a year

  • Other costs: About $12,000 to $18,000 a year

Business VoIP

  • Software Licensing: Between $20 and $50 per user, per month, depending on the service provider

  • Installation: Between $35 and $50 depending on the service provider and unique needs

  • Hardware and equipment: Uses existing devices, like computers and cell phones: approximately $150

  • Maintenance: None, handled by the service provider

  • Additional costs: Between $140 and $300 a year

PBX vs VoIP: Hardware

Traditional PBX System

  • Traditional phones

  • PBX server

  • Backup power supply

  • Modems and splitters (if needed)

  • Outlets

  • Routers

  • Cabling

  • Sufficient circuit capacity

Business VoIP

  • Internet Access

  • Analog telephone adapter

  • VoIP gateway

  • Router

  • Ethernet cord

  • PoE Adapter

  • Desk phones and/or headsets (optional)

  • Backup power supply (optional)

PBX vs VoIP: Devices

Traditional PBX System

  • Landlines

  • Desk phones

Business VoIP

  • Desk phones

  • Computers (desktop)

  • Tablets/Laptops

  • Cell phones

PBX vs VoIP: Available Channels of Communication

Traditional PBX System

  • Traditional phone calls only

Business VoIP

  • Traditional voice calls

  • Video calls/conferences

  • SMS texting

  • Team chat systems

  • Collaboration tools (file sharing, screen sharing, etc)

  • Email and social media (with integration options)

PBX vs VoIP: Features Beyond Calls

Traditional PBX System

  • Caller ID

  • Holding

  • Call transfers

  • Voicemail

  • Call recording

Business VoIP

  • Voicemail (including visual)

  • Call recording

  • Call transcription

  • Call routing and call forwarding

  • IVR and ACD

  • Holding

  • Call analytics

  • Automatic callback

  • Softphone calling

  • Third-party integrations (CRM)

  • Mobile app support

PBX vs VoIP: Scalability and Mobility

Traditional PBX System

  • Can only be used on location where hardware is installed

  • Scaling requires new phone lines or an IP PBX system

Business VoIP

  • Can be used anywhere with an internet connection

  • Easily scalable: upgrade to add phone numbers or users or downgrade to save during leaner times

PBX vs VoIP: The Details

With all the main differences between these two solutions laid out, it’s time to take a closer look. We want to think about the setup process, how reliable each solution is for a business, the features available on each, the technology involved, and dig a little more into the different options available so you can meet your communications needs and make the right decision for you.


Available Features

Business communications rely increasingly on important features and options, so this alone can be a dealbreaker. The PBX phone systems are pretty limited, without many of the options available with VoIP. However, if your business doesn’t do much voice calling, this might not actually be a big problem for you. If most of your communication is done in written form on computers with online connections, you might be good.

On the other hand, if costs are an issue, particularly if you’re just starting out, then PBX may not be the right choice. It requires a considerable investment to get started: hardware costs alone can be extensive. You also might be relying more on modern technology for communication in various ways, in which case VoIP is likely to have more useful options. Let’s consider the key features of these two communication methods below:

Key Features of PBX

This type of connection will give you the most basic features of modern telephone lines. You’ll get voice calling, of course, and the ability to transfer calls from one line to another. You’ll also have call waiting, call holding, voicemail, caller ID, and faxing capabilities (which are crucial for some businesses and something VoIP can’t provide right now). You can also get call blocking and phone audio conferencing. 

Note that this last will only be available on the traditional desk phones you use. You won’t have video calling or conferencing. However, new models of phones do sometimes have color LCD screens that make it a lot easier to use a particular service than it used to be. Finally, note that you may also be able to get call recording with some PBX solutions, but this isn’t actually a standard feature and may be a service you’ll pay extra for.

Key VoIP Features

If you have a team or users that need access to the latest, cutting-edge network technology, then you probably want the advanced features available in a business VoIP solution. The modern workforce has grown up with data and technology and expects pretty seamless and effortless communication. With a business VoIP solution, you’re going to have IVR and ACD, call forwarding (including Find Me features), automated outbound dialing, voicemail that can include transcription capabilities and even video voicemail, and a lot more. 

You’ll get hot desking technology, call parking, call flipping, and the ability to set up a variety of call routing strategies, from list-based to skills-based, round-robin, time-based, and more. You will also have the ability to record and then transcribe calls, and you’ll be able to tap into and monitor any call that comes in. All those features above just describe what you can do with voice calling. There are a lot more connection options with business VoIP. 

You can hold and record video meetings that include virtual whiteboards, screen sharing, and data sharing. You’ll be able to sync everything in real time, including getting up-to-date user presence notifications, file sharing, user mentions, and SMS texting. While you won’t have access to traditional faxing, which is required in some situations, you will have virtual faxing capabilities, which are more than sufficient for most needs these days. And, if you want, you can integrate the entire system with your social media accounts. This makes it simple to keep up with your postings and see (and respond) to what people are saying about or to you.

Hardware and Setup

This is another big area of difference. As you may already have noticed in a quick review of the advantages and disadvantages of these systems, it takes a lot of investment to get a PBX system up and running. A VoIP solution is a lot easier, though you shouldn’t think that there’s nothing at all involved here. While PBX is far more complex, VoIP does require some setup; but even more employee training.

Most people will be able to use a PBX business phone with almost no training at all. And while you’d think that the modern workforce, with its familiarity with technology, would be able to use business VoIP without the need for special training, the opposite is actually true. Not only are business VoIP solutions very complex, but they also can all work a bit differently from the way casual tech on cell phones and computers tends to work. This means part of your training is actually un-training ingrained habits.


PBX Hardware and Setup

The biggest issue here is the hardware itself. It’s a fairly complex and lengthy process to get everything put in. You’ll need the right desk phones and then modems and cables as well as splitters to ensure lines go to every desk. You’ll also need wall jacks for each line, and these jacks must each have the right circuits for the phones and lines to work properly. 

You’ll need on-site PBX servers installed, and you’ll also want a robust backup power system to ensure you don’t go offline and become unreachable. The copper lines of the system itself don’t use electricity and will continue to work, but the modern phones your staff will use will all be plugged in.

VoIP Hardware and Setup

With VoIP solutions, the setup is a lot simpler. There’s very little hardware involved. The time sink comes later when you’re training everyone to use the various network options you’ve chosen.

To get started, you’ll need a router, ethernet cords, and internet access. A wifi connection simply doesn’t cut it for the data you’ll need with a business VoIP solution. Then, you’ll need a PoE adapter and a device you can work with–either a computer or mobile device–and then an analog telephone adapter (ATA) or a VoIP gateway.

Depending on your needs, you may also make use of special IP phones, headsets, speaker or video systems, and more. These are all optional and can scale with you as you need them. Ultimately, though, your VoIP solution can be up and running in just a day, barring unforeseen complications.


Once it’s up and running, you’ll want to get your team training right away. It takes time to learn how to use all these features quickly, and it also takes time to set up some of the best features of your new VoIP business phone solutions. 

For example, you’ll want to decide on a call routing strategy and then set it up. The good news is that VoIP providers are well aware of the need to provide easy training, so they will provide on-demand or even live webinars for training, and you can expect 24/7 support with a good service.



When you looked at the overview, you probably noticed right away that VoIP has a much lower upfront pricing structure. This makes VoIP a much better choice for a lot of smaller businesses and startups. VoIP can also easily scale, so you can add or subtract features, users, and teams in order to change your costs. 

Just be aware that these costs will add up over time as you pay monthly fees. In the end, PBX makes the most sense for a really large business that would be priced out of monthly plans very quickly because they have so many users. Bear in mind, however, that it takes a lot of months before the costs of VoIP come even close to the outlay of putting in a traditional PBX–and for many companies, it never will. And, you also will be getting a lot of features with VoIP that PBX simply doesn’t have.

PBX Pricing

When you’re setting up your budget, expect to pay, at the very least, $7,000. If you budget anything less than that, you’ll be unable to get your system put in. Remember that you need to pay for equipment, new hardware, software, licensing, and the upkeep and maintenance of all of this stuff, as well. The hardware alone can easily cost close to $10,000 for 20 users are more, and software licensing is several thousand dollars in itself.

You will also be responsible for maintaining the entire system, including both hardware and the system itself. Maintaining the system costs several thousand dollars a year, and if the system is large enough, you may have to hire your own in-house IT team. Bear in mind that a decent IT employee will cost you at least $50,000 a year. And don’t forget about the initial setup and installation. That’s going to run you between $1,000 and $2,000, and you’ll also be paying around $1,000 a month just in service fees.

So what are we talking about here? Put together the entire thing: purchasing, installing, operating, and maintaining, and you’re easily talking about as much as $50,000 just to get the entire thing set up. Then you’re talking thousands and thousands of dollars every year to maintain it.


VoIP Pricing

Most VoIP systems are priced per user and charged on a monthly basis. You will usually pay between $20 and $50 per user and will get unlimited calling for this price. This means if you have a team of 10, you should be budgeting between $200 and $250 a month for a standard plan. Bear in mind that you can get volume discounts. These can be as much as 10% to 15%, depending on your usage and the service provider you choose.

You will pay more for certain features. If you need extra local phone numbers, expect to pay around $10 a month for each number. If you want vanity numbers, toll-free numbers, or international numbers, you will be paying between $10 and $20 a month for each of these phone numbers.

There are lots of features available with any VoIP phones, so be sure to check with your provider about what things are offered as add-ons and what things are not. Sometimes, it will make financial sense to simply add features like video conference transcription to the plan you already have. In other cases, the best idea is just to upgrade to the next tier.

Hardware and Setup Estimates

What about hardware? Here, it’s harder to estimate costs. Your cost could be basically zero if you want to use existing hardware like the desktop computers and cell phones you already have. On the other hand, without the need to get any extra hardware, sometimes it still makes sense to do so. 

If you want to fully take advantage of features, like whiteboard capabilities in video conferencing, you may want to have particular computers or systems on hand. Bear in mind, too, that you have no responsibility for maintenance and will have no ongoing maintenance costs, except for those costs that come with maintaining existing hardware.

When it comes to set up, this again depends on you. You may have the resources you need to set up the entire system on your own. If not, professional help will likely run you between $50 and $100, depending on the precise setup and how long it takes.

Business VoIP Pricing Caveat

There is just one thing you want to be aware of as you price the different solutions available for internet VoIP calls and other features. Be sure to check what fees may be associated if you need to break a long-term contract. While it is standard to have to pay some penalty for suddenly breaking a contract, there should also be some flexibility so that you can change plans quickly if you need. 

You also want to keep an eye out for any excessive monthly fees: look for solutions that offer very clear and transparent pricing structures. That leads us to our next important category of comparison: flexibility.


Flexibility is one of the key advantages that VoIP has over PBX. On the one hand, you are not tied to a single location or a single business telephone for making your calls. In addition, you can scale the system easily. All it takes is a simple connection with your VoIP provider, and you can upgrade or downgrade as needed. With a PBX system, upgrading to expand is enormously expensive and time-consuming. You will need to invest in more PBX hardware, and you still can’t take this hardware with you to make calls.

And if you need to downsize, you really can’t. The whole reason for downsizing would be to save money, but removing any part of your PBX hardware system would cost you more money. With VoIP solutions, stepping down to a lower tier of service is really simple, so long as you’re not locked into an unreasonable contract.


PBX Flexibility

If you want to add new lines, the cost can get pretty high pretty quickly. You will have to hire technicians to put in all the new phones and cabling required for new users, and you may even experience a disruption in service while you get all this done. Additionally, there’s really only so far that PBX can really be scaled up. 

You can put in more phones, but you are still offering the same service. There are no extra features to access, no matter how much you put into your network. No matter how many lines go in, your teams still cannot use the system anywhere but in the office. And that’s not even considering the physical limitations. Eventually, no matter the cost, there simply isn’t any more room for more phones, lines, and cables.


VoIP Flexibility

The simplest way to scale up to get more lines, phones, and better service with VoIP is just to step up to a higher tier of service from your provider and your online portal. Anyone with admin access can instantly change the service contract as needed by adding new features for a team or making room for more users. 

Some systems will let you step up one user at a time, while others will require you to step up in groups of five or 10. When you step up, however, you don’t have to buy anything else to make that upgrade possible. The only possibility of a downside here is if you were working with a provider that only offers a service you want bundled into a plan with lots of features you don’t need. That’s why it pays to shop around.

And, of course, in terms of flexibility, there is simply no comparison between VoIP calls and PBX. VoIP will work on just about any device that has an Internet connection and will sync all of your data in real-time across all of those devices. PBX will only work on a regular phone, and there’s no flexibility to take things outside the office or synch anything.


At this point, you could be thinking that there’s just no reason in the world to go with PBX. However, there are a few ways that PBX has a small edge over VoIP, and call reliability and quality are one of those areas. VoIP calls depend on your Internet strength and reliability. PBX is hardwired in, which means fluctuations in the Internet will have no effect on your calls.


PBX Reliability

PBX phones that are hard-wired onto your promises are extremely reliable. It is very rare to experience any kind of outage, and the calls themselves are typically of excellent quality with very few stability issues, some international calls excepted.

This is because the PBX phone number you are using depends only on the copper wiring for communication: not an online connection. However, you can sometimes experience a drop in call quality, even with PBX, during storms. PBX systems do sometimes still have dropped calls and issues with echoing.


VoIP Reliability

The good news here is that VoIP calls are better than ever. When this technology first came into use, VoIP solutions were notorious for the poor quality of the calls. Today, this is not nearly as much of an issue. Most users will experience excellent call quality at all times, even on HD audio and video calls. Additionally, most of the VoIP providers provide better quality than your average cell phone or personal Internet phone call will experience. 

You will also get lots of options with your VoIP system, like noise cancellation, background noise, suppression, and the ability to test your audio and video before a call or video conference. Of course, VoIP is entirely reliant on a strong Internet connection to perform well. If that connection is weak, you will experience latency and possibly even dropped calls. There’s no sense in investing in a VoIP solution unless you also invest in a robust and reliable Internet connection. If you don’t, you will never be satisfied with VoIP solutions. Really, the minimum bandwidth you should be operating on is 100 KBPS per line. It also makes sense to invest in a backup power supply in case of power loss, though this is optional. A good VoIP provider will also give you robust troubleshooting help so that you can prevent or fix issues with call quality.

Still worried about the quality of your calls? Don’t be: today’s VoIP solutions offer many advantages, one of them being an average of 99.9% guaranteed uptime (the gold standard is 99.999% of uptime, but it’s usually not worth paying extra only for this minor increase in reliability). Today’s providers can offer this kind of reliability because of heavy investment in carrier-grade networks and redundant data centers to support every network.


Few things are as important to a business these days as security, and unfortunately, there’s some bad news here. Neither VoIP nor a PBX service will make you completely immune to the possibility of data breaches or hackers getting into your network. This is simply the reality of modern business life.

However, PBX does have a slight edge over VoIP in this area, too. For most businesses, this slight edge will not be worth the enormous extra cost. However, there are a few businesses where absolutely nothing is more important than security. If that’s you, and if you are willing to give up functionality, mobility, scalability, and lower cost of service, then PBX might be what you need to choose.


PBX Service Security

Because PBX uses the traditional PSTN copper wiring, it is much less prone to having a security issue than anything that is going out on an internet connection. You can’t have a hacker in your connection if you have no connection at all, so there are no cybersecurity threats to a PBX service.

However, all traditional phone lines are vulnerable to wiretapping. Wiretapping can be done relatively easily either on the premises or at the exchange level. This means anyone really concerned about security will need to do some investment in physical security to ensure wiretapping doesn’t happen locally and hope there’s no FBI-style wiretapping happening elsewhere. 

VoIP Security

Cyber security is a serious risk for everyone, and it’s a good idea to be concerned about this and to talk seriously with your VoIP provider about what they’re doing to make the system safe and private. If a voice over internet protocol provider guarantees you that there is no risk of a breach or a privacy violation, you should walk away. No one can make this promise, and doing so should be a red flag that the provider is not being honest with you.

However, modern VoIP does offer much better security than you might think. Things will certainly be much more secure than on your home Internet, for example. You should be expecting features like end-to-end, encryption, real-time notifications of any unusual activity, third-party testing of the system for security, 24/7 network monitoring, and two-factor authentication and password protection. Look also to see that your service has some third-party security certifications. These could be GDPR, PCI, HIPAA, SOC 2 Type 2, or others.

Another important security feature when you are using VoIP is good training for your employees. Make sure you test them regularly to ensure they know how to identify a malware email or other attempts to infiltrate the system. Also, be sure that your employees clearly know they should never be using VoIP solutions over an unsecured network.

Laying It Out–PBX Service: Advantages and Disadvantages

Now that you’ve gone through all the details, here’s a rundown of the advantages and disadvantages of PBX service. Come back here for a summary of the most important details when you need to refresh your memory or explain to others on your team what your reasoning is for choosing one service over another.

PBX Pros

  • Easy to use

  • Familiar to the entire team

  • No learning curve as with VoIP service

  • Greater security and good control of that security

  • Good call reliability and quality, unaffected by the internet fluctuations

  • Higher customization: businesses can design the entire system from the ground up

  • Can access VoIP services via the installation of an SIP Trunk (more on this below)

PBX Cons

  • Works on a legacy system that may become obsolete in a decade or less

  • Extremely high upfront costs

  • Ongoing hosting and maintenance costs

  • Unexpected maintenance costs at any time

  • Very limited features: hard to keep up with more technologically savvy competitors

  • Requires an in-house IT team and plenty of space

  • Very difficult and costly to scale

  • Cannot be used outside of the on-premises system

  • Not flexible

Laying It Out–VOIP Service: Advantages and Disadvantages

Now that you’ve gone through all the details, here’s a rundown of the advantages and disadvantages of VoIP service. Come back here for a summary of the most important details when you need to refresh your memory or explain to others on your team what your reasoning is for choosing one service over another.

VoIP Pros

  • Significant cost savings, especially in initial installation

  • Access to lots of essential modern features for business communications

  • Easily scalable

  • Very mobile

  • Will not become obsolete any time soon

  • Very easy to set up

VoIP Cons

  • May require a long-term contract commitment with fees for early termination, particularly to get the best prices

  • Hosted off-site, so less control over the phone system as a whole

  • Depends on the stability of the Internet for quality and reliability: may require an upgrade to a costlier Internet connection

  • Potential for security issues

  • Requires extensive employee training to take advantage of all features

PBX vs VoIP: Making the Choice

Now we come down to the nitty-gritty: what’s the best choice for you? When it comes to PBX and VoIP, VoIP is going to be superior to traditional PBX systems in most cases. VoIP is much cheaper, offers much better mobility and scalability, and provides far more of the features that are becoming non-negotiables for modern business communications. In recent years, VoIP call quality and reliability have improved, and strong security standards are now the norm.

It’s also important to bear in mind that traditional phone systems are on their way out. By 2030, it’s possible that a PBX system may not be supported at all. This calls into question whether it makes any sense at all for a business to spend all the money that’s required to install a PBX phone system. It really only makes sense for enterprise-level corporations or for sectors where security concerns trump all other aspects of business.

However, it’s also worth remembering that hosted PBX systems, which are essentially cloud-based, Internet connection-dependent alternatives to traditional PBX systems, have become much more popular in recent years. For the right company, an IP PBX system could be the solution. If you’re willing to put in the investment, SIP Trunking could also allow you to connect your current PCBX system to a VoIP-capable system.

What Is SIP Trunking?

SIP Trunking, which stands for session initiation protocol, is a communications option that can move voice over Internet protocol connections even between legacy phone systems on the public switched telephone network. With an SIP system installed, you’ll be able to make calls over the Internet and consolidate data that you may have in several different locations.

It works by setting up an intermediary between the legacy phone system and the Internet telephone service provider. If you have a traditional system of phone networks, you would need to install an ISDN, or integrated services digital network. This is a circuit that has individual lines, known as trunks, that connect the private branch exchange to the PSTN. When the system is set up, all voice calls get sent over data networks. 

At this point, you’re able to use VoIP phones or adapters or any of the other hardware that goes with VoIP services in addition to your traditional phones. Once you have this, you have all the upsides of VoIP (and the downsides, too, so don’t forget that, especially in regards to security: you still want a VoIP provider with great security protocols in place, and you want your team trained well, too.).

Is Trunking an Option?

Trunking may be an option, but it’s really best only for those who already have PBX systems in place. It doesn’t make much sense to put in a PBX system and then put an SIP trunking system in place. You’re just adding expenses at that point. It makes a lot more sense to just start with VoIP to begin with rather than invest in an expensive legacy system and then add an expensive trunking system on top of that. 


Let’s get to a few common questions about these systems that sometimes trip people up. This can also be a good quick reference if you want to send someone to find answers to questions they’re asking you. Bear in mind that these questions are in relation to the legacy PBX system, not an IP PBX, and assume you have a good internet connection for your VoIP.

Do I Need a PBX System to Get VoIP?

The good news here is: no. A VoIP phone uses a data network over a regular Internet connection and does not need any legacy systems in place in order to work. VoIP uses existing hardware. You probably already have for your business, like desktop computers and cell phones, rather than the typical business phone used for PBX.

What Is PBX Good For?

A PBX system works best in managing inbound and outbound calls when you want complete control over an internal server. Once you have a PBX system in place, you eliminate any need to purchase new a new line or phone number as you increase the number of users. You are in control. You can also build the system from the ground up to perfectly suit your business. 

You have responsibility for the maintenance, which is an expense, but that also means you have complete control. Security is stronger with a PBX system, too, though you will have to take steps to prevent any possibility of wiretapping.

How Do the Costs Compare?

You should expect to spend, at a minimum, around $7000 to put in a PBX system. If you have a bigger company, the costs can easily rise as high as $50,000. You should also budget for ongoing monthly maintenance expenses, which could include keeping an IT team, and you should also be prepared with an emergency budget in case of large maintenance needs that have to be addressed.

To put in VoIP, you will need no more than about $1,000 to get started unless you purchase a lot of hardware unique to your needs. This would only be the case if you can’t (or don’t want) to use your existing phones and computers. You will have monthly charges that will vary according to the number of users you have and the features you want. You should also budget, however, for a bit of slower production while everyone gets on board during training and learns how to use the system.

What About Call Quality?

For most users, call quality with VoIP will be more than sufficient. However, there may be some cases where quality is so essential that a PBX system is the best choice. Remember, too, that call quality will depend on the strength of the Internet connection you have. If that connection is poor, you may have to seek a solution, like paying for an upgraded Internet connection. Other solutions include requiring employees to avoid using data-sucking apps during business hours.

What About Security?

The security offered by modern VoIP solutions is excellent. With two-factor authentication, end-to-end encryption, and more, most businesses will find that their VOIP provider has the solution they need for any concern. However, you can improve security by training your people carefully and by doing endpoint hardening on the devices that access your system.

If you work in an enterprise where security trumps all other considerations, then a PBX system may be the right one for you. Be sure to weigh the pros and cons of this solution and carefully investigate the security features offered by VoIP, as you will be sacrificing mobility and many communication features. Be aware that wiretapping is always a possibility, even with PBX.

Which One Is the Better Choice? 

For nearly every business, VoIP will be the better solution. It offers savings, features, and ease of installation that PBX can’t match. It works well with existing hardware and will not likely become obsolete anytime soon. It does require some time to train on, and it does require careful attention to security, but it’s definitely the wave of the future. 

Legacy systems will be obsolete very soon, and VoIP systems may suddenly (and hopefully temporarily) become much more expensive when everyone has to turn to them. By getting in on VoIP now, you’re ahead of the curve. Ready to try VoIP for yourself? Try our #1 recommended VOIP service today.

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