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Hosted PBX vs Standard PBX

Functionality

Specific differences between a hosted PBX vs standard PBX service depend on the particular PBX equipment being compared. VirtualPBX offers a full-featured system with capabilities equal to or greater than the most expensive hardware systems. There are some key differences, however, that arise from the basic way the systems work.

Premise-based equipment is usually employed inside an office or building and is typically a single piece of hardware with multiple incoming phone lines shared across a higher number of extensions. Maintaining PBX equipment requires knowledge of PBX and phone technology and skilled technicians onsite to do the work.

VirtualPBX systems are hosted on our servers and our engineers address all of the equipment and maintenance needs. Calls are routed from the hosted PBX to extension owners through the public telephone network, enabling calls to be easily routed to anyone, at any phone, in any location. Administration of the system is done through a web-based interface, and is done easily in real-time by anyone, regardless of his or her familiarity with telephone systems.

Here are some clear contrasts between the two options:

Hosted PBX Standard PBX
Up-Front Costs Very Low Very High
Support Costs Low Moderate
Cost Per Minute on Incoming Calls Moderate Low to Very Low
Shares Incoming Phone Lines No Yes
Routes Calls to Any Phone Yes No
Supports Distributed Employees Yes No
Scalability Very High Limited
Call Capacity Very High Limited
Full Feature Set Included Expensive Extra
Fault Tolerant Yes No or Expensive
ACD Queuing Included Expensive
Distributed Administration Yes No

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Costs

Knowing what a PBX system will cost requires understanding how the system works and what associated costs will be incurred. In basic terms, the upfront and maintenance costs of a standard PBX will be great but typically come without much in the way of per-minute charges. A hosted PBX will have a small per minute charge but virtually no or very little initial set-up costs and no maintenance fees.

For companies that have large toll-free call volume, the comparison looks like this:

Five User System

Hosted PBX System Standard PBX System
Up-Front Costs (System and Installation) None $62,250
Per Month Per Year Per Month Per Year
Hosted PBX Service Fees $45 $540 $0 $0
Telephone Lines $0 $0 $30 $360
Monthly Hardware Payment $0 $0 $52 $625
Monthly Maintenance $0 $0 $63 $750
200 Toll-Free Min/User/Month $0 $0 $100 $1,200
Total Costs $45 $540 $245 $2,935
Hosted PBX Savings $200 (82%) $2,395 (82%)

Forty User System

Hosted PBX System Standard PBX System
Up-Front Costs (System and Installation) None $50,000
Per Month Per Year Per Month Per Year
Hosted PBX Service Fees $95 $1,140 $0 $0
Telephone Lines $0 $0 $150 $1,800
Monthly Hardware Payment $0 $0 $417 $5,000
Monthly Maintenance $0 $0 $500 $6,000
200 Toll-Free Min/User/Month $0 $0 $500 $6,000
Total Costs $359 $4,308 $1,567 $18,800
Hosted PBX Savings $1,208 (77%) $14,492 (77%)

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What to Choose?

When a Standard PBX System Makes Sense

  • All employees are physically located in the same office
  • High up-front costs are acceptable in exchange for the lowest monthly cost possible
  • There is no need for toll-free service for callers
  • Larger companies
  • There is little likelihood of change in company size

When a Hosted Service like VirtualPBX is the Better Choice:

  • Some employees telecommute or work away from the main office
  • There is no main office – the company uses a “virtual” office
  • High up-front costs are not an option
  • The company wants to offer toll-free calls to its customers
  • Small companies
  • Companies that expect their needs to change
  • Incoming call capacity needs to be high
  • Fault tolerance and system reliability are important
  • There is no desire to dedicate employees or contract outside for PBX support