Businesses need to keep evolving their methods and mechanisms with changing times in order to garner success. For this, they must leverage the most advanced technologies available in the market. One such technology with respect to business communication is a hosted PBX system.

Not only are these systems cost-effective and extremely flexible but also equipped with a whole range of unique features. Cloud PBX has, thus, easily become one of the most popular telephony solutions in the market.

But are Cloud PBX systems right for you? What are the pros and cons? Whether or not you should switch to Cloud PBX?

Today, we’ll be answering all these questions.

Let’s begin!

What is a Cloud PBX?

First things first, let’s break the terms:

Cloud: Everything that runs in the cloud is cloud-based.

PBX: Private Branch Exchange or PBX is a private telephone system through which organizations can communicate internally as well as externally. It is the machine used to route incoming calls, transfer calls, and contain the specifications of the working of a phone system.

Business phone systems have become an integral part of all businesses as unlike residential or cell phones, they offer useful features such as call conference, extension dialing, call routing, call queuing, on-hold music, etc.

  • Cloud PBX or hosted or virtual PBX is entirely built in a cloud and is accessed through the internet.
  • Unlike digital systems, cloud PBX hosts all software and data in the cloud.
  • Unlike complicated traditional PBX, Hosted PBX doesn’t require a dedicated physical space and is inexpensive to handle.
  • Modern hosted PBX solutions extend stability to the business as they are accessed via the internet.

Cloud PBX vs. Digital PBX

Digital or on-premise systems are housed in complex hardware units that need to be stored physically in the office and require manual operation. Their huge size, storage facility, operation methods, expensive maintenance, and need for professional attention keep on increasing the cost for companies. They are monitored through a PBX switchboard which processes connections between telephones, provides accounting data, and controls other business phone system features.

Cloud PBX, on the other hand, possesses all the features and functionality of a digital PBX but eliminates the need for complex hardware as it is located in a virtual space. It is highly cost-effective for businesses as you save money that is otherwise spent on installation and maintenance.

IP PBX is a better option as it presents a host of unique features, does not require a dedicated staff, and is much easy to use and maintain.

How it works?

  • Cloud PBX is an internet-based phone system. Here, your provider is responsible for maintaining the system and providing you phone services without any glitches.
  • With your business phone system hosted in the cloud, you’ll be able to make and receive calls through IP phones, mobile phones, or other devices.
  • The entire voice traffic is carried over the Internet which is connected to data centers located in the cloud.

Pros of Cloud PBX

Low cost: Cost-effectiveness is hands-down the greatest benefit of switching to cloud PBX. All businesses – irrespective of their size – aim to cut non-essential operational costs as much as they can. Hosted PBX is a great budget-friendly option for them.

As the system doesn’t require any complex hardware equipment, you’ll be able to significantly cut down on equipment and recurring maintenance cost. All your services will be hosted in the cloud which means that your provider will be responsible for updating and maintaining the system. Your only expense will be of purchasing IP phones.

Also, cloud PBX providers usually charge on a per-user basis which provides scalability to your business. This pricing-model eliminates the chances of unpredictable costs and gives you better control over your budget from the start as you pay only for the features and phone lines you use.

Flexibility: The world is aggressively moving towards a remote economy. In such a situation, businesses need systems that will allow their team to be reachable at all times, anywhere in the world. Hosted PBX gives you that benefit.

All you need is your smartphone and a stable internet connection to conduct business. If your cloud PBX provider offers free softphone apps, you’ll be able to use desktops and smartphones to make and receive calls. This will enable you to work from home, or anywhere across the globe as a full-time remote worker.

Unique Features: Cloud PBX comes with a range of unique features that you wouldn’t be able to access otherwise. These features include call routing, call queuing, voicemail with transcription, call recording, etc. Before settling for a cloud PBX provider, explore all the available features and add-ons. Also, check whether the vendor provides what you’re looking for.

Reliability: Traditional Phone services are vulnerable to physical damage in disasters, vandalism, or general aging as they use extensive hardware equipment and copper cables. Cloud PBX, on the other hand, remains free from any physical damage and runs on an internet connection. It is thus more reliable. All the data is secured on the cloud because of which your business continuity will never suffer.

Geographic redundancy is another great measure to keep your business going. It means that your provider has several servers in various physical locations. Each of these servers contains identical data, so in case one fails, another can instantly take its place.

Cons of Cloud PBX

Connectivity – Cloud-based phone systems are entirely dependent on the internet. This is not exactly a drawback but, to be safe, make sure you have a stable internet connection at all times.

Security concerns – As your communication is based on the internet, you need to be extra careful of the security threats. Adopt the standard security measures to nullify the concerns of hacking and malware.


To make it easier for you, here are businesses that must immediately make the switch to Cloud PBX-

Businesses that: 

  • Do not want to spend on hiring a dedicated IT staff.
  • Want to avoid maintaining PBX equipment.
  • Witness fluctuating communication requirements.
  • Operate at multiple locations.
  • Are unsure about their future needs or are rapidly growing.
  • Have a team of remote employees.
  • Do not own physical office space.