Are Virtual PBX and Hosted / Cloud-based PBX the Same? What’s the Difference?

Through no fault of their own, people commonly make the mistake of believing that Virtual PBX and Hosted PBX are one-in-the-same, or that these terms are interchangeable. While it is true that both services offer a reduced Total Cost of Ownership (TCO), they do, at the same time, differ in a number of ways. In terms of the kind of function each provides, Virtual PBX and Hosted PBX are actually entirely different. The main distinction between the two, for example, is that Hosted PBX is a comprehensive business phone system while Virtual PBX, on the other hand, only offers call director and automated answering services.

So, What is Virtual PBX, then?

As mentioned above, Virtual PBX is not a total business phone system in-and-of-itself but, instead, it comprises a single portion of a Hosted / Cloud-based PBX structure. In a nutshell, it can be best defined as a service that delivers options to manage and transfer incoming calls while providing automated answering features.

A Virtual PBX set-up redirects received calls to landlines, cell phones or VoIP extensions with an Interactive Voice Response (IVR) or auto-attendant, and does not include outbound calling features or call control options.

Since this type of system is significantly cheaper than a cloud-based hosted PBX solution, and lacks important business communication options, it is most fitting for a home office or small business. Similar to that of Hosted / Cloud-based PBX, costs associated with a Virtual PBX system are kept to a minimum as the purchase of new hardware is not required. Alternatively, subscribers of Virtual PBX solutions are able to acquire a toll-free telephone number that can direct to employees’ cellphones, home phones and cost-free softphones. Additionally, a Virtual PBX system is compatible with several high-level call-forwarding options such as Find Me / Follow Me.

With all of that being said, it is vital to mention that a Virtual PBX solution will have to be budgeted as an added cost, in addition to your current outbound phone service, as it is not meant as a replacement. Furthermore, there is no feature to connect incoming calls to staff with extension dialing, as well as no options for call control. Lastly, and in opposition to a Hosted / Cloud-based PBX service, there are no productivity advantage features like integrated presence or messaging available for Virtual PBX. If your small business or home office starts out with a Virtual PBX system you will ultimately, as your business grows, require a more comprehensive service such as that offered by a cloud-based hosted PBX solution.

 What about Hosted / Cloud-based PBX?

When we talk about Hosted or Cloud-based PBX we are referring to a comprehensive VoIP business system that directs both incoming as well as outgoing calls while providing high-level features, such as those found / required within a large organization. It would be wise for companies that receive a large amount of calls or that employ 10 or more people to forgo Virtual PBX and, instead, arrange for a Hosted / Cloud-based PBX solution.

Generally speaking, suppliers of Hosted / Cloud-based PBX will take the place of your existing phone provider and your current hardware will be replaced by IP phones, while sending all communication through a router. You will be set-up with one central phone number for all incoming calls as well as extension dialing for all employees, not matter where they are situated. Given this, Hosted / Cloud-based PBX is an excellent choice for businesses with various locations, be it local or global. Additionally, Hosted / Cloud-based PBX provides a number of sophisticated advantages such as unified messaging, Find Me / Follow Me, call forwarding, call hold, auto attendant, three-way conference calling and more.

Now that you are aware that Virtual and Hosted / Cloud-based PBX are, in fact, very different, the last step that you will need to take is to figure out which is best suited for your particular business needs. Ultimately, the size of your business and your budget constraints will be the most important factors that you will need to consider when making a final decision.