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From POTS to VoIP – A Look at Today’s Top Phone Systems for Business

Pros and Cons of Hosted VoIP Phone Systems (Hosted PBX) and On-premises IP PBX Phone Systems
January 5th, 2021 [UPDATED]
Originally Published on July 24th, 2018

The Pros and Cons of Hosted VoIP Phone Systems (Hosted PBX) and On-premises IP PBX Phone Systems

The modern-day analog telephone service – commonly referred to as a plain old telephone system (POTS) – can be accredited to numerous individuals throughout history. But it was Alexander Graham Bell who, in 1876, was the first to patent the technology as an “apparatus for transmitting vocal or other sounds telegraphically.” Fast forward to today, and many small businesses still use this archaic technology. However, the good news is that while a portion of society has yet to venture away from this 144-year-old system, the world has progressed, and far superior options are available in the marketplace.

These options include on-premises private branch exchange (PBX) phone systems and Hosted VoIP phone systems (also known as Hosted PBX services). To get your business familiar with these communications system service offerings, GeoLinks has put together this walkthrough on the pros and cons of each service so you can decide what’s right for your company.

What is an On-premises PBX?

 
What is an on-premises PBX?
 

An on-premises PBX resides physically on-site at a business. We’ve provided a more detailed overview of PBXs and other phone systems here. Still, for a quick definition, dictionary.com defines a PBX as a “manually or automatically operated telephone facility that handles communications within an office, office building, or organization and that is connected to the public telephone network.”

Many of today’s on-premises PBX systems are IP-PBX systems. The primary difference between a traditional PBX and an IP-PBX is that in an IP-PBX, the signaling is internet protocol (IP)-based, and routing and features are more software-based than hardware-based. Voice calls are managed via “voice over Internet Protocol (VoIP),” which converts voice into digital signals, allowing businesses to make voice calls over networks using IP. VoIP is used both in private company networks and in telephone services delivered over the public Internet.

The Pros and Cons of On-Premises IP-PBX

On-premises IP-PBX Pros:

  • Control – Customization and flexibility over your phone system
  • Integration – Integrates with company software programs such as Customer Relationship Management (CRM) systems
  • Fixed Price – No risks of fee increases after the installation (though maintenance and upgrade costs can add up)

On-premises IP-PBX Cons:

  • Costs – Upfront costs are typically steep
  • Maintenance – Maintenance costs are your responsibility, and some businesses may not have enough internal IT resources or the budget to make difficult, expensive, or highly customized changes
  • Slow Setup or Repair – Initial deployment time or repair may take longer
  • Reconfigurations – Adds, changes and removals are your responsibility
  • Consumes IT Personnel and Resources – Ties up valuable internal IT resources in routine maintenance
  • Costly Outages – Outages can take down all sales and service operations.

What is Hosted Voice Over Internet Protocol (VoIP), and How Does it Compare to a Traditional or IP PBX?

Hosted VoIP delivers PBX-level services over the Internet. For this reason, the term “Hosted PBX” is often used to describe Hosted VoIP. The terms are interchangeable.

The Pros and Cons of Hosted VoIP / Hosted PBX

Hosted VoIP Pros:

  • Cost Savings – Lower initial equipment cost and setup costs than an on-premises PBX. Plus, leading hosted VoIP providers, such as GeoLinks, can save companies up to 40% compared to traditional phone lines
  • OpEx vs. CapEx Benefits – Many companies value the ability to treat their communications as an operational expenditure instead of the long-term depreciation treatment of an on-site PBX as a capital expenditure
  • Always Up to Date – Software updates happen automatically, so your system is always up to date
  • Ease of Use – Hosted VoIP is simpler to install, configure, and maintain than premises-based services
  • Mobility & Remote Work Enablement – With Hosted VoIP’s ability to support Unified Communications as a Service (UCaaS), a user can make and take calls from anywhere with an Internet connection on a standard office phone, a computer, tablet, or mobile softphone. Increases in remote work due to the COVID-19 pandemic have resulted in 42% of the U.S. labor force working from home full-time (which Hosted VoIP enables). Accordingly, some businesses will permanently adopt remote workforce models to reduce or avoid altogether the costs associated with maintaining in-building offices
  • Enterprise-grade Features – Modern, up-to-date and always-improving features without needing to upgrade your phone system. Examples include enterprise-grade features such as call queues, auto-attendant, call forwarding, music-on-hold and unified communications, to name a few
  • Outsourced Maintenance – Your provider shoulders all the work, risk, and complexity, thus creating less dependency on costly in-house IT resources
  • Business Continuity – The cloud-based model delivers business continuity benefits (such as routing calls to mobile phones during outages)
  • Scale on-demand – Hosted VoIP systems scale with your needs
  • Application Integration – Hosted VoIP service providers design integrations between their phone systems with numerous other business applications companies typically use, including email services, social media, web browsers, IM/SMS/MMS services, CRMs, etc.
  • No Equipment Required – In a Hosted VoIP environment, a business no longer has to shoulder costly on-site hardware and equipment purchases and upgrades—voice communication occurs entirely over the Internet through downloadable applications with data stored in the cloud. (NOTE: Many businesses invest in VoIP desktop phones for user convenience).

Hosted VoIP Cons:

  • Bandwidth Dependency – Since Hosted VoIP functions over the Internet, it’s critical to have available and reliable bandwidth to complete calls. Thus, if you’re on a poor Internet connection, you may struggle with both inbound and outbound calls. Quick fix? Upgrade your bandwidth, sign up for a dedicated Internet circuit, so you never have to share your bandwidth, or bundle in an SD-WAN solution to prioritize your voice traffic.
  • Voice Quality – Once again, because Hosted VoIP depends on the Internet, your call quality may suffer if you experience latency. Thus, ensure that you have a high-quality Internet circuit with dedicated Voice QoS before upgrading.

 
Upgrading to a hosted IP-PBX
 

Learn more about upgrading from an on-premises PBX to a Hosted PBX in our article “Migrating from on-premise IP-PBX to Hosted IP-PBX.

 

Ready to Try GeoLinks Hosted VoIP and Hosted PBX Solutions?

Call GeoLinks today and talk to one of our in-house experts to learn how to build the right-sized communications system for your business.

Contact GeoLinks
 
 

Need a VoIP Phone System Immediately?

Talk with a GeoLinks Hosted VoIP & Hosted PBX specialist now.

Call 888.225.1571.
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1 https://www.voip-info.org/hosted-pbx-vs-on-premise-pbx/

Migrating from on-premise IP-PBX to Hosted IP-PBX

 

Telephony services have come a long way since Alexander Graham Bell’s (and others) initial invention back in the late 19th century. Past revolutionizing the way the world interacts and communicates socially, they have completely transformed the way we do business. In modern day, for example, it is no longer a necessity to have a dedicated resource in-house to manage and maintain the network, ultimately enabling businesses to see immediate benefits when they migrate to a hosted IP-PBX system. But before we get into modern IP-PBX systems, let’s quickly go through its history.

Quick History of the PBX

PBX stands for Private Branch Exchange. However, before the PBX, there was the PABX (private automatic branch exchange). PABX was invented in the 60s and allowed internal traffic within a company to occur without any (human) operator “switching” traffic manually. It seems job automation has been occurring for a long time, way before the invention of artificial intelligence (AI).

Many companies invested heavily in their own internal infrastructure and were not ready to embrace the new PBX system, despite the many features it provided. So, that forced PBX manufacturers to be more innovative by making it easier to integrate with older telephony systems. It goes without saying that the PBX (of the 1980s) revolutionized the call center.

Features of PBX Systems

The auto-attendant feature was one of the first features of the PBX system. Furthermore, the PBX was connected to PCs, which made call handling even simpler. It allowed call centers to speak to customers one to one while other calls were being routed to their required destinations.

Many companies, both small and large, began installing the PBX because it allowed them to increase revenue through increased pre-sales and after-sales activities. PBX manufacturers re-invested these profits into research and development, and by the 1990s, we had digital PBXs performing more functions than ever before – until the arrival of the IP-PBX (Internet Protocol Private Branch Exchange).

Features of IP-PBX Systems

As a natural progression from analog to digital, then the Internet age, IP-PBX began to rely heavily on software. That meant that voice calls, emails, and faxes could now be streamlined into one system. The IP-PBX system is extremely efficient, allowing everything to be easily programmable and set up by individual users. Users could ask their calls to “follow them” to certain locations within their company, or even be routed to their mobile devices. Voicemail could be delivered as a transcribed email. And even though installing and maintaining an IP-PBX on-site became cheaper and more streamlined, it wasn’t long until cloud services began to become a dominant force with the option of having a hosted/managed IP-PBX system.

The Cloud and Hosted Services

Today we have many software companies offering their services over the cloud. The cloud just means your software is managed/accessed over the Internet and not from within your organization. Salesforce, for example, was one of the first successful Software as a Service (SaaS) companies. But cloud services, in general, took a long time to catch on. Most companies were against the concept of not having critical software and data stored and accessed on premises.

The concept of shifting costs from Capital Expenditures (CAPEX) to Operational Expenditures (OPEX) became a topic of debate. And while larger companies still debated this move to the cloud, many startups and small businesses embraced the cost savings of managed and hosted services over the Internet.

Now, small and large companies alike can take advantage of managed IP-PBX services. Automated services can ask customers where their calls need to be transferred, and it can all be set up and managed with ease. If an agent is busy, the call can be sent to the next available one. Call back options have also been added whereby customers are called back according to their place in line instead of waiting painfully for the next available agent.

GeoLinks Hosted IP-PBX Services – Hosted Voice

Companies like GeoLinks are offering hosted IP-PBX solutions to businesses large and small, saving them money and streamlining their operations. Most commonly bundled with the GeoLinks ClearFiber™ network, businesses who sign up for GeoLinks’ hosted IP-PBX service, Hosted Voice, can expect:

  • A total cost savings of up to 30% – largely due to eliminating on-premise equipment costs, install, and ongoing maintainance fees.
  • An extension of service use through a desktop phone and mobile app.
  • Unlimited calling across North America (the US, Canada, and Mexico).
  • A fully-managed solution built to grow and increase seamlessly as your business scales.
  • Enterprise-grade features such as an auto attendant, conference calling, follow me, music on hold, voicemail to email, fax to email, and much more.
  • True QoS.
  • 100% uptime with 4G LTE failover.

To support the high-demand, high-bandwidth applications that fuel today’s mission-critical business operations, it’s no longer a luxury to have a high-functioning network and optimal voice solution, it’s a necessity. Want to learn more about how your company can migrate from on-premise IP-PBX to Hosted IP-PBX? Call and talk to a GeoLinks’ team member today!