What is the difference between IP PBX and Virtual PBX?

Times have changed and with the rapid improvement and growth of technology, basic systems used in business have advanced. Systems like basic telephone lines have advanced into intricate systems that allow businesses to operate more efficiently and effectively while saving money. Two of these Systems are called the IP PBX and Virtual PBX System.

What is IP PBX?

Previously, phone calls were placed through a phone company’s network, which required analogue phones on each end. Now, most companies use VoIP Systems – which allows companies to place voice calls over the internet. IP PBX stands for Internet Protocol Private Branch Exchange. It is a system used by businesses that connect telephone extensions to the public switched telephone network and provides internal communication for the business. The IP connectivity of the Private Branch Exchange also provides additional audio, video or instant messaging communication.

This system is especially helpful when it comes to reducing costs for long-distance communication often found in many businesses. The VoIP gateways can be combined with the PBX functionality to allow a business to use their intranet for long-distance communication, and it allows them to take advantage of the benefits of a single network for voice and data (known as a converged network).

How does IP PBX work?

The IP PBX system (or VoIP system) consists of one or more SIP or VoIP phones, an IP PBX server, and a VoIP Gateway (which is optional). The server is very similar to a proxy server. SIP clients register with the IP PBX server. When they place a phone call from their telephone, they ‘ask’ the IP PBX system to establish the connection. The IP PBX holds a directory of users/phones and their corresponding addresses. It is, therefore, able to connect an internal call or route an external call via the VoIP. Essentially, the IP PBX and VoIP systems allows an organization to use the internet to place and take calls.

Functions of IP PBX

The basic functions of an IP PBX system include:

  • Creates internal and external connections between users
  • Provides one number that external callers use to reach anyone in the company
  • Distributes calls between staff
  • Offers a menu of options from which callers can select and be directed to a certain extension
  • Allows customised business greetings
  • Call management
  • Places callers on hold if the callers cannot reach a certain extension because the line is busy
  • Plays music or business message while a caller is on hold
  • Records voice messages
  • Transfer calls between users internally

How all companies can benefit from IP PBX

  • It’s easy to use and maintain: the IP PBX system doesn’t require a lot of technical knowledge to use and maintain, making it easily usable to most companies.
  • It is a cost-effective solution: because calls are made over the internet, the operational costs are very low. Support, upgrades and maintenance are inexpensive. Monthly subscription costs do exist, but companies still save compared to other solutions.
  • Mobility: IP PBX systems are IP based, which allows users to move phones to different connections without any issues.
  • Extensions: an IP PBX system allows a user to have phone access from various locations by providing a remote extension system.
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What is Virtual PBX?

Virtual PBX is a budget-friendly version of hosted Voice over Internet Protocol that usually only handles inbound calls. A Virtual PBX system is a hosted phone system and is suited to all sizes of organisations. The system is easily accessible via a user web portal.

How does Virtual PBX work?

Unlike an IP PBX system that requires the system to be hosted on-site, a Virtual PBX system can be located off-site at the VoIP provider’s offices. Maintenance and updates are all managed externally by your VoIP provider. Like IP PBX, the Virtual PBX system also uses IP communications, meaning phone calls are placed over the internet often through a Business Fibre line.

Functions of Virtual PBX

Virtual PBX systems are more cost-effective than IP PBX systems because they are more suited to smaller businesses. Therefore, they also offer fewer features:

  • Handles only inbound calls
  • Offers a limited number of extensions
  • May not include international/long-distance coverage
  • Call management
  • Places callers on hold if the callers cannot reach a certain extension because the line is busy
  • Plays music or business message while a caller is on hold
  • Records voice messages
  • Transfer calls between users internally

Benefits of Virtual PBX

The benefits of a Virtual PBX system include:

  • Due to the system being hosted virtually, it is easy to use and maintain
  • Organisations can easily switch between different features through the use of a web portal or app on a smartphone
  • It is more cost-effective than IP PBX systems
  • No hardware or IT team required as all the work is done at the hosting site

IP PBX and Virtual PBX systems are very similar in many ways. The biggest difference between the two systems is that one is hosted on-site, and one is hosted virtually/off-site or at your provider’s offices.

Take our online connectivity guide to find the perfect solution for your business!

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