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Phone system: Cloud PBX systems: what are they, and are they really different from hosted PBX?

Reading time: 3 mins

Businesses interested in switching to a modern phone system may be confused with the number of concepts which seem to refer to more or less the same thing - and by and large actually do. Up there with IP PBX, hosted PBX and virtual PBX, meet cloud PBX. Expressing the same promise of hardware-free, hassle-free enterprise telephone system delivered via the internet, these cloud-based systems actually differ from “normal” hosted PBX systems in some respects.

 Cloud PBX

How cloud-based PBX systems work

Cloud PBX systems are telephony systems delivered by the internet with high interconnectivity features.

Hosted telephony systems delivered by the internet...

These systems require no hardware at all, but just a stable, broadband connection to be used. All the routing services are done “in the cloud”, over the internet, by the telephony services provider, rather than by a staff member supervising a hardware PBX system in the office. They can be used anywhere a registered user can connect his communication device to the internet, as if this user were at the office. Settings are accessed through a web browser on a personal account. All data may be stored for backup purposes by the provider, which is called ‘’redundancy”.

...with high interconnectivity features

Cloud PBX systems are interconnected systems allowing easy scaling, as resources are shared to allow room for expansion, customization and capacity.

Collaboration with other users is made especially easy and feature-rich. Users are often billed on a usage basis, like the number of minutes they are using the system, regardless how many devices and users are actually using the system.

Cloud PBX systems and hosted PBX systems

If the latter rings a bell to the reader, it’s certainly because he or she has heard about hosted PBX. Differences between cloud-based systems and hosted PBX are in fact very minimal, and mostly relate to the marketing packaging.

Operating specificities of cloud PBX systems

Just like hosted PBX systems, cloud-based PBX systems operate “from” the internet. Technically, the difference is that the latter will rely on more interconnectivity to function. While hosted PBXs will allocate one server, or one part of a server’s resources to a user, the cloud version will source resources needed from a number of systems, automatically adding them up to keep up with user requirements.

This normally allows more scalability than hosted PBX systems. On the other hand, as these resources are shared by more users than the more or less dedicated resources offered by hosted PBX systems, and as there are more different resources involved, which all represent a distinct risk of breakdown, cloud-based PBX systems may be more prone to downtime.

Commercial packaging differences

The main difference between cloud PBX and hosted PBX is the commercial packaging, which represents some genuine innovation.

While hosted PBX systems charge on a per-user basis, with definite usage rights and usage quotas, in tiered systems, cloud PBX systems will charge on a usage basis, typically, on a per-minute basis. It doesn’t matter how many devices are used and by how many people. Also, there are usually no usage limitations, which would require users to switch to a more expensive plans if full capacity is reached - because it is usage-based, total price just keeps going up.