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GoTo Connect
GoTo Connect
FrontRunners 2023
GoTo Connect is the all-in-one phone, meeting and messaging software built for SMBs. It boasts an enterprise-class phone system with 100+ features with inclusive minutes for local, long distance & international calls; video and au...Read more about GoTo Connect
RingCentral MVP
RingCentral MVP
FrontRunners 2023
RingCentral MVP is a cloud-based business communications solution that offers tools for Messaging, Video and Phone. Core features of the solution include conferencing, auto-recording and unlimited long-distance and local calling. ...Read more about RingCentral MVP
PanTerra Streams
PanTerra Streams
Business Plus is a cloud-based VoiP solution created by PanTerra, which allows users to take or make calls from their office phone number, communicate with their team, and have file access, all from any device with an internet con...Read more about PanTerra Streams
Ooma Office
Ooma Office
Ooma Office is a cloud-based voice + video solution suitable for businesses of all sizes. The platform includes a full suite of business phone features designed to deliver a flawless communications experience and advance team coll...Read more about Ooma Office
OnSIP
OnSIP
OnSIP Hosted OnSIP Hosted VoIP by Junction Networks is a cloud-based phone solution that offers businesses across various industry verticals PBX feature such as auto attendants and voicemail-to-email. Unified communications (...Read more about OnSIP
IP Phone System
IP Phone System
Evolve IP is a cloud-based IP phone and collaboration solution suitable for businesses with over 50 employees. It caters to multiple industries including credit unions, financial services, health care, legal, restaurants and veter...Read more about IP Phone System
Dialpad
Dialpad
For quickly growing businesses looking to efficiently scale their support teams, Dialpad provides a cloud-based call center with access to real-time customer insights. Dialpad allows users to onboard quickly and focus on deliverin...Read more about Dialpad
Ringover
Ringover
FrontRunners 2023
Ringover is the no.1 business phone system that gives you unlimited calls to 110 countries, video conferencing, SMS and group messaging, call recording, call whispering and more features focused on improving your teams productivit...Read more about Ringover
Nextiva
Nextiva
FrontRunners 2023
Nextiva is a platform that brings communications together with business applications, intelligence, and automation. This helps businesses communicate and build deeper connections with their customers. The platform brings all ...Read more about Nextiva
SpitFire
SpitFire
Designed as a hybrid call center solution, SpitFire Enterprise utilizes powerful dialing tools to assist call centers in the telemarketing, financial services, healthcare, and education industries launch blended inbound and outbou...Read more about SpitFire
net2phone Canada
net2phone Canada
net2phone Canada is a cloud-based business phone service provider, helping Canadian organizations drive business performance through powerful uCaaS tools. Trusted by clients and partners across the country, net2phone Canada has di...Read more about net2phone Canada
Zoom Meetings
Zoom Meetings
Zoom Meetings is a cloud-based video conferencing software solution that allows organizations in the educational, financial, health care, and government sectors to conduct virtual meetings and collaborate in real-time using integr...Read more about Zoom Meetings
Google Meet
Google Meet
Google Meet is a video conferencing app. It is the business-oriented version of Google's Hangouts platform and is suitable for businesses of all sizes. The solution enables users to make video calls with up to 30 users per high-de...Read more about Google Meet
TeamViewer
TeamViewer
TeamViewer is an online meeting and video conferencing solution that connects any PC, mobile, and server to each other globally. The solution is available in nearly all countries and supports over 30 languages. TeamViewer is suita...Read more about TeamViewer
GoTo Meeting
GoTo Meeting
An industry leader in online video conferencing for companies around the world, GoTo Meeting now comes as part of GoTo Connect, the all-in-one communications software built for SMBs. The Meeting solution, available to buy standalo...Read more about GoTo Meeting
Microsoft Teams
Microsoft Teams
Microsoft Teams is a cloud-based group chat solution that helps teams collaborate on documents. Its key features include messaging, conferencing and file sharing. Microsoft Teams has replaced Skype for Business as Microsoft's onli...Read more about Microsoft Teams
Webex
Webex
FrontRunners 2023
Webex brings together Calling, Meeting and Messaging modes of collaboration into a seamless, engaging, inclusive and intelligent experience. Seamless collaboration across devices, locations and organizations • Use any computer, t...Read more about Webex
ConnectWise ScreenConnect
ConnectWise ScreenConnect
ConnectWise ScreenConnect (formerly ConnectWise Control) is a cloud-based operations management solution that allows technicians to perform remote support, gain remote access and run remote meetings. It acts as a meeting point for...Read more about ConnectWise ScreenConnect
Join.Me
Join.Me
Join.me is an online meeting platform that helps businesses manage meetings and team collaboration. Key features include real-time presentations, mobile whiteboards, scheduling, toll-free audio, chat and more. Designed f...Read more about Join.Me
Doodle
Doodle
Doodle is a cloud-based appointment scheduling platform, which helps small to large size enterprises schedule meetings and appointments. The prime features of Doodle comprise of access invitation, calendar management, invite ...Read more about Doodle
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Buyers Guide
Last Updated: March 16, 2023Here's what we'll cover in this guide:
What are Virtual, Hosted and Cloud PBXs?
Choosing Between an On-Site or a Hosted (or Cloud, or Virtual) PBX
Final Consideration
What are Virtual, Hosted and Cloud PBXs?
A PBX, or Private Branch Exchange, is at the heart of every business phone system. It is the central component that integrates all internal phone extensions with all external phone lines, and allows calls to be set up and transferred between them. Originally, PBXs were big, physical machines. First, they were switchboards with human operators; later, the switchboards became automated. But since the late 1990s, they have been available in a new form: as virtual or hosted machines.
It’s important to point out that the terms "virtual," "hosted" and "cloud" have all been used very loosely over the years. In the late 1990s, a company by the name of "Virtual PBX" was the first to offer a service similar to what most now call a hosted PBX. Theirs was a much more limited service: it could only forward incoming calls. (Businesses would pay for a single business number, and when their customers called it, Virtual PBX would route those incoming calls to their employees’ on-site or off-site phones.)
In the early 2000s, as VoIP networks expanded and their connectivity to landlines improved, most of the virtual PBX call-forwarding companies added outbound calling to their plans. These new plans took on a new description: hosted PBX services. Then, when cloud became the buzzword for describing hosted services, this term, too, joined the mix.
Today, we see the three terms "virtual," "hosted" and "cloud" used interchangeably. Buyers should not assume that the terms imply any specific set of features. All services need to be compared in detail to understand what they offer.
Choosing Between an On-Site or a Hosted (or Cloud, or Virtual) PBX
Choosing a new phone system is one of the most daunting tasks a business can face. There are many technologies on the market that are competing with, overlapping and blurring the distinctions between one another. As we just explained, cloud, virtual and hosted are all used to describe a PBX that’s hosted off-site by a third party. So how do on-site PBXs compare to those hosted in the cloud?
| Off-site PBX | On-site PBX |
Cost | A hosted PBX will almost always have a lower initial cost. But since it is billed as a service, it will have a recurring monthly charge. Businesses on the fence should calculate the total cost of ownership, and consider that hosting prices could go up over time. | There is a wide range of options for on-site PBXs. Some cost thousands of dollars; some are free. Included features and its form of network integration are the main cost factors. Companies that are already hosting their own computer servers might find this choice more feasible. |
Maintenance | Hosted PBX software is kept up to date by the hosting company. Configuration changes can often be made remotely, though some leave this responsibility to the company subscriber. This works well for small companies without dedicated IT staff. | An on-site PBX could require a knowledgeable engineer or IT manager to add, remove and change phone extensions and perform periodic maintenance and other updates. |
Flexibility | It’s difficult to generalize about the flexibility of hosted PBXs because of the wide range of companies and offerings. The important thing here is that buyers ensure their hosted PBX comes with all of the features they expect to need. Though hosted PBX service providers do generally stay current as new technology becomes available, there is no guarantee that providers will add new features that subscribers may want in the future. | There are few limitations with on-site PBXs. They can be programmed and reconfigured at will, as long as there’s an employee available who understands the system. On-site PBXs are more flexible with regards to WANs (Wide Area Networks), so integrating a newly opened branch office into the same phone network might be easier than with a hosted system. |
Security | With a hosted PBX, the hosting company is responsible for keeping the system secure. This takes some—but not all—of the security burden off subscribers. Businesses still need to have their data connections secured. Hosting providers can usually make suggestions about how to do that and how to best configure firewalls so as not to interfere with voice traffic. | Modern PBXs are almost always connected to the Internet, and they face some of the same threats as computers. An unsecured PBX can become victim to denial of service and theft of services attacks. A properly configured firewall can prevent these attacks, though configuring firewalls so as not to interfere with voice calls can be challenging. |
Analog or VoIP | Though hosted PBXs can connect to traditional analog office phones, they are far more at home interfacing with VoIP phones. In most cases, businesses using a hosted PBX system are already using, or are in the process of switching to, an entirely VoIP system. | If a company has a large investment in a traditional PBX system and uses many traditional (analog) phones, then the argument to go with an on-site virtual PBX becomes stronger. It’s easier to integrate analog phones with a PBX if it’s local instead of hosted remotely. |
Final Consideration
Apart from the specific factors mentioned above, there is one other consideration that can help companies decide between a hosted and an on-site phone system. While difficult to quantify, this concept is one of the most influential in modern business strategy. It is known as the strategy of “core competencies,” and it all boils down to focus.
The strategy of core competencies states that businesses should focus on what they do well and what they do better than their competitors—and keep their focus there. If some element of their operations that is not directly related to these core competencies can be outsourced, it often makes more sense commercially to do so.
Many businesses switch to hosted phone systems for the simple reason that phone systems are not one of their core competencies. Placing management of the phone system in the hands of companies who do specialize in it shifts that burden there—and frees the other companies to focus on what they do best.
If telephone communication is central to what a business does (for example, a call center), it may be preferable to keep the phone system as close to the office as possible. But for the majority of companies—those that consider phone service important, but perhaps not central to their business model—hosting the system off-site is more often preferable.