Choosing Between On Premise PBX and Cloud Based PBX Systems

Whether you’re shopping around or just browsing, we’ve laid out the differences between an on-premise PBX and a cloud based PBX phone system—and what that means for your business.

What does PBX stand for?

In order for companies to have a working phone system for their enterprise, they’ll need to have a private branch exchange (PBX) system. The PBX is the main communications system that switches calls between enterprise and local telephone lines while also allowing the company to share phone lines to stay cost-efficient. Historically, an operator would physically connect calls through to the enterprise; however, today these exchanges are done digitally and automatically.

In a nutshell, a PBX system is the essential component in a company’s communications network. These hosted VoIP systems are responsible for dynamic enterprise-wide and individual call controls such as auto-attendants, call forwarding, conference call capabilities, voicemail, hold music, and many more features.

On-premise PBX

An on-premise PBX system is a common choice for larger companies who have robust PBX needs and a dedicated team of IT staff that can handle the implementation, monitoring, maintaining, and upgrading of the system. Rather than outsourcing their PBX VoIP system, these companies can afford to front the costs of hardware and software in addition to specialized IT personnel.


  • Total control and ownership over system
  • Cost-effective for larger companies


  • High CapEx and OpEx
  • Need specialized staff to run and maintain
  • Vulnerable to disaster


Cloud based PBX

A cloud hosted PBX system is more common for small businesses to medium enterprises that don’t have the budget, the space, or the need for an on-premise VoIP system. The hosting VoIP provider handles all the installations, maintenance, and upgrading of the system so the client doesn’t have to. Extremely cost-effective for most business, a PBX cloud system requires virtually no capital expenditures to implement and operating costs are usually set at a low, predictable monthly rate.


  • Easily customizable and scalable
  • Cost-effective for small to mid-level companies
  • Virtually no CapEx
  • Controlled OpEx
  • No specialized staff needed
  • 24/7/365 US-based support
  • 99.999% uptime


  • Client does not own hardware or software
  • Contract-based


Which PBX is for you?

A cloud based PBX solution is definitely the way to go for most businesses, offering them a premium balance of features, cost-efficiency, and scalability for its users. Since there’s no equipment to install and maintain, and no special IT staff needed, companies can save big by outsourcing their communications to a hosting VoIP provider. Additionally, for companies that do have an IT staff on hand, those individuals can focus on more pressing issues or projects for the company rather than watching over its communication system. It’s truly a win-win solution—giving companies the feature-rich system they need without any of the hassle or added cost.


Interested in a cloud based PBX solution for your company? Find the DOTVOX service plan that fits you!


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