PBX: The Only 7 Things Today’s Companies Need to Know


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A PBX (Private Branch Exchange) system lets you manage outgoing and incoming calls, along with internal communication. It uses both hardware and software to connect devices such as routers, phones, adapters, and servers. 

The term stems from the good ol’ days when manual switchboards and patch cords were the norm. 

However, technology has since made remarkable strides, departing from the hardware-based systems of yesteryears.

Today, PBX systems are much more advanced. Modern systems like IP PBX and VoIP PBX offer more cost-effective and feature-rich solutions, like call recording and voicemail-to-email capabilities, to enhance productivity.

If you’re looking to make the switch from traditional phone lines to PBX, this guide will tell you everything you need to know. 

1. There Are Different Types of PBXs

As a business owner, the most important types of phone systems you need to know are on-premise PBX, hosted PBX, and hybrid PBX.

Let’s take a closer look at each:

  • On-Premise PBX: On-Premise PBX, also known as Legacy PBX or Traditional PBX, is a hardware-based system that sits in your office. It connects to the Public Switched Telephone Network (PSTN) using Primary Rate Interface (PRI) phone lines. This setup helps you manage incoming and outgoing calls within your organization. The downside is that it usually has a bigger upfront cost and ongoing maintenance.
  • Hosted PBX: Hosted PBX, also called Cloud PBX or Virtual PBX, is a cloud-based phone system that manages your company’s calls and communication services. Instead of having physical hardware on-site, your phone system is managed by a third-party provider in their data centers. As a result, businesses get access to advanced phone features, such as voicemail, call routing, and conferencing, without the need for complex and costly on-premises equipment. Hosted PBX systems are scalable and often more cost-effective for small to medium-sized businesses.
  • Hybrid PBX: A hybrid PBX combines a traditional office phone system with internet-based features. It lets you keep your regular office phones and tap into online tools for added capabilities and remote work options. Hybrid PBX is particularly helpful for companies looking to transition to a cloud-based system.

2. A Hosted PBX Is Easier to Manage

A hosted PBX is truly a plug-and-play system, thanks to the power of VoIP (Voice over Internet Protocol). Instead of grappling with the challenges of an on-premise system, you can enjoy the convenience of a cloud solution. 

All you have to do is register and sign up to the cloud software to get access to the hosted PBX solution, much like any other online service you use. 

Just make sure you have a strong employee password policy in place so outsiders can’t log in and potentially gain access to your data. 

On the other hand, on-premise PBX takes a lot of work to get up and running, ranging from initial installation and configuration to ongoing maintenance. 

And if you don’t have a dedicated IT staff in place, you may need to call in a technician for maintenance. That can lead to potential downtime or disruptions in your service. 

3. You Can Get VoIP Over a Legacy PBX

If you want to bring VoIP capabilities to a legacy analog PBX (Private Branch Exchange), you can employ a SIP (Session Initiation Protocol) Gateway.

SIP is a protocol that supports communication over the Internet. It allows the transmission of voice and multimedia data, making it the backbone of VoIP services. Also, SIP is used to set up, modify, and terminate real-time sessions, such as voice calls over IP networks.

When someone places a call using the legacy analog PBX, the SIP Gateway converts the analog signal into digital packets. These digital packets are then routed over the Internet to their destination, whether it’s another VoIP phone, a mobile device, or even a traditional landline.

That being said, enabling VoIP provides several advantages for companies: 

  • Access to New Features: The best VoIP phone services offer many advanced features that may not be available with traditional analog phone systems. This includes features like video conferencing, call recording, call forwarding, voicemail to email transcription, and more.
  • Scalability: These systems are highly scalable, allowing businesses to add new lines or extensions as needed without the limitations of physical wiring. 
  • Cost Savings: VoIP calls often cost less, especially for long-distance and international calls. 
  • Remote Work Compatibility: Employees can easily connect to the company’s phone system from anywhere with an internet connection, making it well-suited for telecommuting. 

4. You Get Insights with Real-Time Data and Call-Analytics with VoIP PBX

For many businesses, particularly those operating contact centers or relying heavily on customer interactions, having a pulse on call data is invaluable. 

Real-time data can shed light on important parts of your operations, such as call volume and customer wait times, which directly impact the customer experience.

This data is typically more difficult to get with traditional PBX systems. But with VoIP PBX systems, the data is right at your fingertips. 

By logging into your VoIP provider account, you gain immediate access to a wealth of call analytics and real-time data. 

You can identify call trends, assess agent performance, and ensure your customers receive the prompt, efficient service they expect. 

Nextiva dashboard with the user activity screen shown.
Source – Nextiva

This level of insight empowers your business to stay agile and responsive, ultimately enhancing the overall customer experience.

5. Cloud PBX Saves You Money 

Hosted PBX systems are cheaper than traditional options for many reasons.

The big advantage is that you won’t need to buy a whole new haul of equipment.

A cloud phone system lets you use the devices your team already has, such as desk phones, softphones, mobile devices, and headsets. 

There are a ton of other factors to consider, too.

Are you planning to add more phone lines or new users? Do you need to hire employees in different countries or communicate with international clients and customers?

VoIP providers allow you to adjust the bandwidth and customize your features conveniently from your online account.

Cloud-based collaboration solutions are often the most cost-effective. These systems rely solely on software and typically charge a monthly fee.

When you’re on the lookout for your PBX provider, it’s important to take into account the extra costs you might be paying for other software. For instance, you could be investing in dedicated video conferencing software, call recording tools, or file-sharing and virtual whiteboard solutions.

With a unified solution, you can access a wide array of communication channels and collaboration tools all within the same platform. This means you receive one straightforward monthly bill.

6. Hosted PBX Connects to Other Software 

Transitioning to new communication tools may seem daunting, especially if your team has established systems in place. 

The good news is that integrating a hosted PBX service connects to the most popular third-party apps. That way, your team can work smarter and faster.

Integrations can streamline your workflow and minimize manual data entry, saving you time and effort.

For example, Nextiva offers an app marketplace that connects with the most popular sales and marketing apps, such as Zoho and Salesforce.

Nextiva integrations landing page.
Source – Nextiva

When integrated, these platforms can fetch relevant contact details, making it easier for you to access customer information during calls or support interactions.

7. The Right PBX Type for Your Business Can Vary

Now that you know all about the different PBX systems and what they can do, the million-dollar question is—which one should you invest in? 

The answer depends on how you want to operate. If you want to use phones and landlines to make calls, then a traditional solution is best. 

But if you want your team to make calls over the internet, work remotely, or have access to more call tracking and features, you want a hosted PBX that is connected to a VoIP provider. 

Hosted systems are the best option for businesses starting from scratch without a system in place. They’re designed for remote work and have all the capabilities for sustainable scalability. 

Here are some of the things you should consider when choosing a VoIP provider: 

  • Reliability: A modern PBX is only useful if it’s working and not offline. It’s important to choose a service that is online most of the time. Look for a provider that promises 99.99% uptime or better. Nextiva, for example, uses multiple data centers to ensure your service is always running. 
  • Flexibility: Modern phone systems can work with regular VoIP desk phones or softphones that you can use on your computer or smartphone. This means you have options for how you make and receive calls.
  • Support: If something goes wrong with your phone system, you want a team you can trust to help you out. 
  • Cost: When picking a service, make sure it fits your budget. Look for a provider that offers plans you can afford.
  • Security: To keep your phone system safe, find a provider that watches it all the time (24/7/365) and has special certificates like SOC 2 or ISO/IEC 27001, which means they meet certain security standards. You might also want to think about features like call encryption to keep your calls private.

No matter which PBX you choose, it’s best to pick one that suits your team’s needs. That means it can scale up or down, provide support, and come with all the bells and whistles to enhance your communications. 

The right PBX solution can unlock key areas of your business. It can allow for remote work, help you get more customers, and provide a better experience, making it a valuable asset to your company.

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