Cloud-based telephone system vs. Traditional Telephone Systems

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Cloud-based telephone system

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Such confusion surrounds the pros and cons of a hosted cloud-based telephone system. Here at Tech Advance we thought we’d give you the answers in simple terms without any confusing jargon thrown in.  In the world of phone systems, you basically have two options:

  • A traditional on-site PBX
  • A cloud-based or hosted PBX using VOIP

You may have heard a telephone system referred to as a PABX (Private Automatic Branch Exchange), key systems, key and lamp system, PBX, soft switch, VoIP soft switch, VoIP networks switch or just plain ordinarily telephone system.  In simple terms, the ‘traditional’ way of doing things was to have a phone system on your premises. This equipment connects your phone extensions, and links them to the public phone network. Often using PSTN or ISDN telephone lines.

Typically a phone system would be a capital purchase with a one-off up-front cost. Note that an on-site system can also link to VOIP services, to make a kind of hybrid system. This gives the benefits of an on-site system with the cost savings of internet phone calls.

Cloud-based telephone system

A Cloud-based telephone system, often called a hosted phone system, uses the internet to connect up all your extensions to each other, and the public phone network. With a cloud based telephone system you would still buy the telephone, setup and training, but instead of purchasing the telephone system processor you simply pay a monthly rental for ports on the offsite telephone system.  Your office telephones would then connect via the Internet using VoIP to the telephone system that is offsite.

This technology allows small and medium-sized businesses to have a sophisticated telephone system without the investment in telephone equipment. VOIP and SIP are often words that confuse anyone outside the telecoms industry. Just to clarify, here is what they both mean:

VOIP… Stands for Voice Over Internet Protocol. A common and useful phone system type that uses the Internet to transmit sound (your conversations or calls). VoIP Phone Systems use and benefit from traditional office phones, using an internet router and lowering costs when compared to land line calls.

SIP… This stands for Session Initiation Protocol and is a common standard used for the delivery of telephone line services using the Internet as opposed the traditional telephone network.

So which one is best for your business?

As you might have gathered, there’s no simple answer to this. It has to come down to what will work better for your business, the type of business you have – your expectations and requirements, and of course, your internet connection!

For a small business with simple requirements and a stable internet connection, a hosted solution offers low up-front costs and a manageable monthly fee. For a business with more than a handful of users, that is reliant on phone calls, an on-site system may be the better choice.

We hope this information has been useful and if you are considering purchasing or renting a new telephone system for your organisation and would like some free expert advice on the different types of telephone systems available and which may be most suited to your business, then please contact us on 0800 505 3350 or enquiry here.


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