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To Host or Not to Host? That is the PBX Question

When it comes to a PBX phone system there are two distinct choices in the marketplace – hosted PBX (also known as Virtual PBX or Cloud PBX) and premise-based or self-hosted PBX.

Both feature a wide range of call features suitable for businesses of all sizes- call routing, IVR, ACD, quality monitoring, scalability, etc.

While each PBX phone system has its own set of benefits, the clear-cut benefits of a hosted PBX system are rapidly overtaking the traditional or premised-based model. Two of the perceived benefits of the self-hosted PBX phone system are stronger security because the network resides on site and better performance with larger call volumes or larger businesses.

Both of these benefits might still be true to some extent. However, with the growth in hosted PBX systems and the increase in services and providers the gap is quickly closing. Security has long been the number one concern for hosted PBX vendors and they are constantly working to upgrade and protect customers systems from breaches. Some providers will even guarantee no lapses in security.

The perception that hosted PBX is a better fit for smaller businesses but not for larger ones has changed too. A recent report by Frost and Sullivan showed that total cost of ownership (TCO) improved significantly for larger call centers utilizing hosted PBX with a full array of features. The report showed the 5-year TCO for a 500-seat center with full-function configuration was 43% lower for a hosted model vs. premise-based while the same configuration for a 50-seat center was 8% lower TCO. These findings essentially imply that as the size of your contact center grows so too do your savings.

Another major benefit of the hosted PBX system is the low start-up costs. With a hosted option, all that is needed is IP phones and an internet connection to start. With a self-hosted PBX phone system, there is a great deal of capital expense upfront. Expensive equipment will need to be purchased – servers, firewalls, gateways, configuration software.

It appears that as cloud technology improves and hosted PBX grows the reasons for setting up a premise-based PBX phone system are dwindling.

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