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PBX versus VoIP: What Sets Them Apart

PBX versus VoIP: What Sets Them Apart?

Selecting the right phone system for a business can be nerve-wracking. With a multitude of options available, making a well-informed decision can be hard. In this article, we will compare PBX and VoIP systems, with a specific focus on the advantages of utilizing VoIP.

When it’s about phone systems online, you are more than like to come across PBX and VoIP systems. Traditional PBX systems have stood the test of time, having been in use for decades. On the other hand, VoIP is a relatively newer phone solution that brings forth a multitude of advantages. It is important to note that both options have their own set of pros and cons.

The Origins of PBX

PBX, short for Private Branch Exchange, traces its roots back to the 1960s. Initially, PBX systems relied on human operators to manually route calls. Businesses discovered that by acquiring their own phone systems, which encompassed phone lines, desk phones, and staff members, they could save on costs.

Over time, advancements in technology led to significant improvements in PBX systems. The need for manual operators diminished as automated features were introduced, making the systems more reliable and efficient. Companies began adopting PBX phone systems on a larger scale, benefiting from features such as extension dialing, call forwarding, and even holding music. These developments marked significant milestones in the emergence of PBX systems.

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In the 1990s, a groundbreaking innovation emerged in the realm of phone systems: VoIP (Voice Over Internet Protocol). Since its inception, VoIP has undergone continuous advancements and has transformed the way businesses communicate in the modern era. Unlike traditional legacy systems, VoIP utilizes the power of the internet to transmit voice data.

VoIP enables voice communication to be transmitted in digital packets over internet networks, rather than relying on conventional telephone lines. This shift in technology has brought about numerous benefits for businesses, including cost savings, flexibility, and a broader range of features.

With VoIP, businesses can take advantage of a wide array of modern communication tools such as video conferencing, instant messaging, and mobile integration. This technology has reestablished the way organizations operate, facilitating seamless remote collaboration and improving overall efficiency.

As technology continues to advance, VoIP systems are continuously evolving, incorporating cutting-edge features and ensuring compatibility with emerging communication technologies. VoIP has undeniably propelled businesses into the modern age, enabling them to embrace the advantages of digital communication in a dynamic and interconnected world.

Contrasting PBX and VoIP: Understanding the Variations

Although PBX and VoIP are both phone systems designed to enable inbound and outbound calls within an organization, they possess fundamental distinctions. VoIP has gained greater popularity as it was intentionally developed as an advancement over previous systems. Nevertheless, traditional PBX systems continue to offer unique advantages. Here, we present the key disparities between the two to enhance your understanding.

Divergence in Service Delivery

A significant contrast between PBX and VoIP lies in their respective methods of providing service and handling phone calls. Traditional PBX systems connect to a local Public Switched Telephone Network (PTSN) via landlines. These legacy systems relied on copper wires to establish the landlines and typically offered a limited number of lines, although sufficient capacity was usually available.

Maintaining a PBX system typically necessitated the presence of dedicated on-site IT personnel responsible for managing the physical hardware housed within the office.

In contrast, VoIP systems transmit voice as data over the internet, converting it back to voice at the receiver’s end. Consequently, VoIP solely relies on an internet connection for making calls, reducing the hardware requirement. Maintenance and upgrades to the VoIP system are typically handled by the VoIP service provider, relieving businesses of that responsibility.

Nonetheless, there are no inherent speed disparities between PBX and VoIP systems.


When it comes to scaling up a business, the phone system plays a crucial role, albeit often overlooked. Both PBX and VoIP systems can accommodate growth, but they do so in different ways.

VoIP systems excel in scalability. Adding additional lines for new employees is a straightforward process, as users can be easily incorporated into the existing plan. In some cases, upgrading the plan may be necessary, which usually entails a higher fee if on a monthly billing cycle that includes updates and upgrades.

PBX systems, on the other hand, can present challenges when it comes to scalability. The availability of lines may be limited, depending on the geographical area in which the business is located. Expanding PBX systems typically requires the addition of hardware and equipment, which can be both time-consuming and expensive compared to VoIP.

Moreover, VoIP offers the flexibility to transition to a cloud-based or virtual PBX system, often referred to as a hosted PBX. Cloud-based PBX systems come with advanced features, providing maximum customization options to meet the specific needs of a business. This further enhances the scalability of the phone system.

Enhancing Worker Flexibility

In today’s business landscape, flexibility is key to retaining employees. VoIP systems offer seamless flexibility, thanks to their internet-based nature. Unlike traditional PBX systems, which require on-site installation due to their physical infrastructure and landlines, VoIP systems operate solely through the Internet. This enables remote work opportunities, allowing employees to work from anywhere with an internet connection. Furthermore, businesses using VoIP can establish multiple locations worldwide, facilitating a global presence without the limitations of a physical PBX system.

Another advantage of VoIP is the ease of switching providers. When transitioning to a new VoIP provider, compatibility is primarily ensured through software configurations rather than the need for new hardware. This eliminates the requirement for purchasing all-new equipment, simplifying the transition process.

In contrast, with a traditional PBX system, switching providers often entails acquiring new hardware to align with the offerings and specifications of the new provider. This can be a cumbersome and costly endeavor, adding an additional layer of complexity to the process.

By embracing VoIP, businesses gain the flexibility necessary to adapt to the evolving needs of their workforce while enabling efficient remote work capabilities and expanding their geographical reach.

Reliability Considerations

In terms of reliability, PBX systems have an advantage over VoIP. Since VoIP relies entirely on internet connectivity, it can be susceptible to occasional disruptions and outages, particularly in rural areas where internet access may be limited or unreliable. This limitation in internet reliability can impact the overall reliability of VoIP systems, potentially leading to service interruptions and lost business opportunities.

In contrast, PBX systems are generally considered to be more reliable. They are less dependent on an internet connection and are known for their stability. This reliability is especially crucial for organizations that require constant accessibility, such as emergency services. Additionally, PBX systems offer better call quality, which can be impacted by factors like internet connectivity and network congestion in the case of VoIP systems.

It is important to note that VoIP systems still provide a high level of service and reliability overall. However, there is an inherent risk of potential security threats, such as hackers targeting VoIP systems and causing disruptions, which is not typically associated with PBX systems.

While both PBX and VoIP have their strengths and weaknesses in terms of reliability, businesses should carefully consider their specific needs, location, and the importance of uninterrupted communication when making a decision between the two systems.

Advantages of VoIP over PBX in Contact Centers

When it comes to contact centers, VoIP offers several advantages over PBX systems. Here are five key benefits to consider:

1. Affordability: VoIP is generally more cost-effective to set up and maintain compared to traditional PBX systems. With VoIP, businesses can save on hardware costs and eliminate the need for separate phone lines, resulting in lower overall expenses.

2. Improved Call Quality: VoIP systems provide high-quality voice calling, ensuring clear communication among employees. Additionally, they can be seamlessly integrated with mobile devices, enabling employees to stay connected while on the move.

3. Scalability: VoIP systems are highly flexible, allowing for easy expansion as the business grows. Adding new lines and extensions is easier compared to PBX systems, which often require additional hardware and physical infrastructure.

4. Manageability and Maintenance: VoIP systems are typically easier to manage and maintain since they can be remotely managed. This eliminates the need for on-site IT personnel, reducing overhead costs and improving efficiency.

5. Features and Flexibility: VoIP systems offer a wide range of features, including call forwarding, caller ID, voicemail, and call waiting. They also provide greater flexibility in adding new users and features to adapt to changing business needs.

While the choice between VoIP and PBX depends on specific requirements, budgets, and preferences, VoIP systems generally offer a more cost-effective, flexible, and feature-rich solution for contact centers. If you are seeking an affordable and feature-packed option, VoIP may be the superior choice for your business.


Is a virtual/cloud-hosted PBX the same as a VoIP system?

A virtual/cloud-hosted PBX system and a VoIP system are technically different, although they share similarities. While a virtual/cloud-hosted PBX utilizes VoIP technology for making calls, it offers additional features beyond a standard VoIP system. Virtual/cloud-based PBX systems are considered advancements to traditional VoIP systems.

What’s the difference between PBX and IP-PBX?

IP PBX, also known as VoIP phone systems, refers to internet-based phone services. On the other hand, PBX is the original phone system that uses landlines to facilitate inbound and outbound calls. PBX systems also enable internal calls between employees.

What’s the difference between PBX and PSTN?

PBX systems rely on the PSTN (Public Switched Telephone Network) to establish phone connections. Legacy PBX systems used landlines that connect to the local PSTN, allowing calls to be transmitted through the network.

What’s the difference between a PBX and a call manager?

A PBX system functions as a phone system within a company, managing incoming and outgoing calls. In contrast, a call manager is more comprehensive, incorporating features like IP phones, media processing devices, VoIP gateways, and multimedia applications. It offers a more sophisticated set of functionalities beyond the basic call routing capabilities of a traditional PBX system.