What is a Cloud-Based VoIP Phone Service or PBX?

VoIP Vs PBX : How To Select The Appropriate Business Phone System

First of all, “What is VoIP?”

VoIP means ‘Voice Over Internet Protocol‘ and essentially means your telephone conversation is placed over the internet and not on conventional telephone lines. If that is the case, shouldn’t all VoIP be cloud-based? Are there any other types of VoIP? Let’s figure out a Cloud-Based VoIP Phone service and the alternatives in simple English.

Features of Cloud-Based VoIP Services

In a nutshell, unlike traditional telephone systems, which require you to use a telephone on a specific location, with VoIP, you’re accessible to:

  • Make/receive calls anywhere if the internet is available.
  • Call from various devices that support the internet (such as your smartphone, tablet, laptop, or desktop computer).
  • To make and receive calls, use the same business telephone number everywhere (at home, on the street, or at the workplace).

You should consider features that Cloud-Based VoIP Services before deciding whether you want to move to the cloud or stay on-premises.

Lower Costs

For every firm, large or small, the basic principle is essential. You must thus explore every possibility to save costs. The use of a VoIP phone system is one option for organizations to make considerable cost savings.

Consider this



That’s right. That’s right. By using these statistics, VoIP can decrease your telephone expense by over one-half. It is necessary to remember that a change to VoIP does not guarantee a decrease in your telephone costs. Corporations are different, and their demands are other.

However, you can be sure that switching to VoIP can save you a great deal. VoIP cost reductions are achieved in two ways: direct and indirect.

Direct Cost Savings

As far as traditional telephone services are concerned, a company has enormous upfront expenditures. Particularly for commercial phones and PBX equipment.

PBX Costs

A PBX is a physical piece of hardware onsite (private branch exchange). It connects multiple phones to a workplace and can cost an enormous amount of money. Tens of thousands of dollars are spoken, and you can spread the cost of this sum over several years.

You may counter those analog telephones are around the exact cost as IP. The actual pricing is contingent on the required characteristics.

However, PBX infrastructure onsite is an expensive capital investment. It might range from $350 to $5,000 per person anywhere. Even a small business with a few staff must thus invest in actual gear.

VoIP networks eliminate this need for additional gear as the service is powered by a broadband connection.

Such businesses might utilize a session-initiated protocol or SIP, also known as the SIP trunk, to facilitate the transition to their telephone system update. A SIP Trunk is a digital approach to keep your phone hardware in your business. You can use a digital channel. The main advantages of SIP Trunking are cheaper expenses, simpler management, and rapid service activation.

Nowadays, SIP trunking providers are used by technology management leaders to provide additional voice capabilities to an existing telephony system.

Copper Wiring Charges

The additional cable is also eliminated because phone and data on the same channel are permitted by Broadband connections. The correct word for this is a complete duplex in IT and telecom circles. It is capable of simultaneously sending and receiving voice and data. For most VoIP desk phones, only one Ethernet is required.

Power over Ethernet (PoE) allows businesses with their office employees to be more modular. Moreover, these offices will not have to modify the electrical wiring of the building.

Want to go completely Wireless? Also available on your PC or smartphone are professional VoIP services. For both entrepreneurs and businesses, the flexibility of VoIP is a significant benefit.

Calling Expenses

Direct costs are also in the form of telephone costs. VoIP calls are less expensive than the Public Switched Telephone Network (PSTN) or the conventional circuit-switched phone network.

Much of this is related to the dramatic decline in data transport costs. Initially, most small companies had data priced beyond of reach.

Even for significant companies, capping on the internet and broadband was to be contended by users. However, today Internet speeds have increased while the cost of data has been plummeting.

Statistics show that small companies with VoIP may cut their telephone expense by up to 60%. Savings on international calls might potentially be up to 90%.

That’s a substantial number we are talking about in any given year.

This reduction comes back to abolishing costly primary rate ISDN (short for Integrated Digital Service Network). Or even dedicated lines in favor of VoIP service connected with a POTS infrastructure. Long-distance companies outside the United States benefit from cheaper VoIP expenses.

The cost of traditional telephone service is almost double that of VoIP. VoIP provides a substantial advantage for multinational operators.

Recurring Expenses

A VoIP Service also allows companies to save additional recurring costs, for example, tax, maintenance, and repair fees. VoIP companies generally have subscription options that cost as small as $5 per user per month, such as in the case of Nextiva.

Combined, all of these expenses make VoIP service an attractive proposal for start-ups and SMBs.

Indirect Cost Savings

Indirect savings are harder to calculate but do not make your business less essential. Below are some of the frequent fields in which corporations save long-term money.

Savings with Remote Work

Switching to VoIP enables employees to keep on working remotely using the company telephone system. This is due to the extensive list of VoIP telephone capabilities, such as call waiting, self-suspect, instant video calling, conference calls, etc.

Studies demonstrate that not only may productivity rise for employees, but it can also save utilities and office space.

According to recent research by Global Jobs Analytics, a typical company may save $11,000 per employee per year by simply letting them work at home 50 percent of the time.

Add-On Features at No Extra Cost

You may be quick to point out that even traditional PBX provides remote functions such as calling transfer, group ringing, call queuing, etc. These functionalities are essentially not part of a conventional PBX system. Instead, you have to pay individually for these additional features.

Compared with many of these capabilities, VoIP telephone services are free of charge. There is no need to pay for anything you believe could be beneficial for your company.

Repurposed Manpower

If the secretary handles telephone calls and takes messages, the car attendant function allows you to reassign that function at no additional expense. (A full-time secretary hired a pocket of around $45K a year, which is not inexpensive.)

Of course, a secretary does make sense for firms with significant walk-ins or enterprises with large expenditures.

But it may be challenging for smaller firms to justify such a wage. But you merely waive this expense with the auto attendant option a click away.

Increased Accessibility

In addition to cost-effectiveness, accessibility is one of VoIP’s significant commercial advantages. The flexibility to make calls from wherever is a distinct advantage of cloud-based VoIP services.

You may make and receive calls from your company if you have a strong data connection. And you may route calls to another person or send voicemails to you if you cannot answer the call. One notable feature of VoIP is using only a softphone app to take your business phone with you.

Remote accessibility makes your organization adaptable for an increasingly mobile workforce. Unless they are located, mobile employees can remain productive.

What’s more

VoIP adapts based on how your employees work. Employees don’t need to be physically present at the office. They can work on their smartphones and tablets from anywhere.

65% of full-time employees believe that a remote work schedule will increase productivity in the State of Work Production Report.

Complete Portability

An entirely mobile VoIP number is also known as a virtual number. This implies that everywhere you go, you may use the same number. This should be more than good news for individuals who travel a lot. Better still, you can keep the same VoIP number when your firm changes address.

Higher Scalability

Scalability is another of the numerous advantages of VoIP, which makes it an enticing offer to developing companies. While it is an often-discussed element of VoIP, what precisely does it mean? Each business owner would like a telephone system that is growing with their firm according to this option.

A VoIP solution eliminates the need to buy costly gear or a specific line as you expand. Think of all the possibilities as you can here:

  • Prepping for a spike in demand during the holidays
  • Opening a new branch office

Regardless of the circumstance, immediately toggle your preferences without buying any more lines or hardware.

Advanced Features for Small and Large Teams

VoIP allows a single-person operating system to portray the appearance of a larger organization with advanced functions such as automotive attendants and calling transfer. It can, on the other side, make a large company more accessible. All of this involves the optimum use of all the features available.

Let us assume you have a company in Charlotte, but you are serving customers in a far-off state like Oregon.

You will receive a VoIP telephone number with the Oregon area code by signing up for a company such as RingCentral, despite being situated in North Carolina. This enables clients to view you as a local, even if you don’t.

Similarly, you might seem more significant than you are with the car attendant feature. For example, you could be a single owner, but you still set up your car manager to look like a multi-department corporation.

With its multi-party calling capabilities, VoIP offers benefits over traditional phone systems. Large and small organizations typically require a different call provider, allowing numerous individuals to take part in the same call.

Business VoIP providers provide solid, integrated conference calling services.

Clearer Voice Quality

One of its most significant downsides was its poor call quality when VoIP was initially rolling around. For no reason, calls would drop, the audio quality was flawed, and latency was the schedule.

Today, speech quality should not be a problem if you have a quick and steady internet link. VoIP conversations are usually clean, sharp, with no problem latency, lag, or call dropouts. We were all on a terrible conference voice and video earlier.

A sturdy connection to good bandwidth is the key to VoIP call quality. It may be a caution without this, especially when you regularly discover your office calling simultaneously. Somebody always calls in. Everybody is suffering from echoes, delays, and background noise.

VoIP telephones stop those breaks so that the meeting’s agenda may be focused. Noise cancelation and sophisticated audio compression innovations allow VoIP phones to attain a higher quality of sound.

Supports Multitasking

In addition to standard calling services, VoIP allows you to concurrently exchange documents, pictures, and videos in the discussion. So you may meet customers or workers from various corners of the world effortlessly more integrated.

More Flexibility with Softphones

Despite the name, hardware devices are not softphones. Instead, apps like a tablet or a smartphone are loaded on a computer or other intelligent devices. Skype is an excellent example. However, VoIP companies like Nextiva have their apps built especially for companies.

There are several benefits to have a softphone for your company communications:

  • Frees up desk space.
  • Additional cost savings for equipment.
  • Allows even more portability.
  • Allows the employees to be permanently linked.

More than that, you can be flexible with softphones. You have access to features supporting your remote way of work.

Increased Security in Cloud-Based VoIP Service

The majority of individuals don’t worry about spending more time than on the safety of their telephone systems. The security of the telephone infrastructure is a significant concern, particularly for companies. The request for personal information (PII) was never higher.

A popular entrance point is to mislead people by making fake calls, sometimes social engineering.

VoIP can reduce vulnerabilities to security by exploiting IP technological advances such as encryption and better identity management. Hosted VoIP tries to safeguard their networks around the clock, so you don’t have to.

Securing your VoIP System involves working with a trustworthy VoIP provider, who carries out autonomous security checks, ensures that employees are practicing a good password, and configures automated calling warnings.

It is also always advisable to constantly upgrade your operating system so that your company does not become vulnerable.

You should read Attacks on VoIP and Unified Communications are increasing with work at home if you want to learn more about threats on VoIP.

Cloud-based VoIP vs. On-Premise VoIP

What is Cloud-Based VoIP Service?

Cloud-based VoIP is hosted instead of at your location at the data center of your VoIP provider. This implies that your enterprise does not have to handle any phone system hardware (particularly “PBX”), also known as a cloud telephone system or off-site VoIP system.

Cloud VoIP brings together traditional phone systems (or PBX) and local/large distance phones to link them to highly secure, redundantly powered data centers rather than being situated at your premises. Instead, you have a more technical connection with a Cloud VoIP.

Is Hosted VoIP also Cloud VoIP

You may also have heard of cloud-based telephone systems dubbed VoIP hosts or PBX hosting cloud systems. All of them are basically the same.

Hosting implies that the hardware/PBX of the phone system is situated physically outside of the building and is handled by a team of specialized VoIP experts. This is a popular VoIP choice since it does not need to invest valuable resources to upgrade and maintain hardware or PBX for its business telephone system.

An office can offer a VoIP telephone service that enables its phones to be housed in its office but can also host its PBX in the VoIP data center, which means: “Hosted VoIP.”

What is On-Premise VoIP?

Onsite VoIP implies that your physical company location is equipped with PBX and phone system equipment.

Cloud-Based or On-Premise VoIP, which one is better?

Using a Hosted VoIP solution (such as 3CX, FreePBX, FusionPBX) has numerous benefits instead of an onsite VoIP system or a conventional telephone system. Because cloud telephone solutions are excellent for companies:

  • VoIP cloud is less expensive. It costs far less to establish our VoIP service than a PBX locally. In many situations, a hosted VoIP system has almost no setup expenses.
  • No PBX may be purchased. Hosted VoIP telephones come below-operating expenses instead of capital expenses. For many firms, this is quite tempting (including small businesses and nonprofits).
  • No PBX can be set up, updated, or maintained. This is the job of our specialists. To get VoIP up and running fast and properly, you do not need anxiety about becoming a telecom or VoIP specialist.

Many comparable technologies are undoubtedly known to you to use audio and video communications on your preferred gadgets.

Likewise, VoIP telephony solutions leverage the power of high-speed internet (which your company probably already has) and the newest technical improvements to provide small and big organizations with safe and dependable communication tools.

Missing something? You may also read, “Moving to VoIP, what should you know?

Roosho is a Telecommunication engineer with more than 10 years of experience in VoIP and Unified Communications. His expertise has helped him complete more than 100 projects for Feds, Public Universities, Large Group of Companies in his 10 years of experience, and he is still growing with the industry. He loves to share his ideas about his experience and expertise with the world. That’s why VoIP Bible has made him the lead technical content writer of VoIP Bible.

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