Cloud PBX or Onsite PBX: 7 Reasons Why You Should Prefer Cloud PBX

PBX Systems have become an important requirement for all business enterprises owing to the increasing communication needs. Choosing a PBX System is often a difficult task as there are several providers offering similar types of solutions. Also, many business owners get confused with which one to choose. Before understanding the difference between the two, let me explain to you a little about both these PBXs.

What is Cloud PBX?

It is one of the latest additions in the PBX Technology. It is commonly referred to as hosted PBX or virtual PBX, which is an IP-based PBX solution that is provided and accessed through the internet. This system is built, managed and delivered by a third-party service provider. This virtual phone system aims to provide a reliable and secure business phone system through the internet.

These systems are well-suited for businesses as it offers a lower overall cost and flexibility. Here, the data is stored and transferred over the internet. It is based on Cloud Computing technology. Cloud Technology brings with itself the benefit of accessing data and services from any device connected to the internet.

PBX or Private Branch Exchange refers to the technology that a telephone service provider uses to route calls. Traditional PBX exists in the hardware form. But the cost and maintenance of such hardware is tough for businesses which are in their nascent stages. And this is where the Cloud-based PBX or the Hosted PBX existing in the software form comes into action.

What is Onsite PBX?

Onsite or On-premise PBX is the traditional PBX phone system. In these phone systems, all the hardware is present at the physical location. Calls made through the on-premise PBX goes through your call server over a dedicated voice network connection.

While initially, it may seem that on-premise PBX is a good option, it has its fair share of disadvantages. Onsite PBX incurs high installation charges. It also requires full-time maintenance. In addition to this, the onsite PBX needs service and support from an in-house IT team.

Cloud PBX vs Onsite PBX

By now it is clear that opting for a cloud based PBX is a better choice as you will be able to reap more benefits when compared to onsite PBX. However, while making your decision to choose between the two, it is important to consider various factors. Here are some pointers to help you :

  • Does your IT staff has the technical skills to manage an on-premise communication set up?
  • What will be your budget and preferred pricing model?
  • Do you have offices in multiple locations or remote workers?
  • Will your existing systems integrate with the new communication system?

In accordance with the ongoing trends and market scenario, for most of the businesses, Cloud PBX is the way to go. Going forward, we will understand the benefits offered by these systems. 

Advantages of Cloud PBX over Onsite PBX

Easy Setup & Saves Call Cost

On-Premise PBX system is a costly affair. To set this up, businesses need to invest in servers, hardware, software and systems. Onsite PBX system also requires dedicated IT staff for setting up and customizing the PBX according to the requirements.

On the other hand, Cloud based telephone system does not require any custom IT infrastructure. As the whole system here is hosted and managed in the Cloud, there is no need for any hardware. With this, businesses only have to pay for the services that they opt for thereby saving both cost and technical know-how required to set up a system.

Further, these systems are independent of any geographical location. Therefore, businesses can integrate their entire communication infrastructure into a single system. This, therefore, leads to a significant reduction in call cost.

Multi-Channel Integration

A distributed environment and a variety of communication tools are the must-have for communication and collaboration in the present day. Multi-channel communication is, therefore, an essential part which not only helps to improve employee efficiency but also the experience of the customer.

On one hand, the onsite PBX system offers a handful of standard features to support the multi-channel communication, Cloud Phone Service, on the other hand supports multiple mediums of communication including the basic expectations of voice, video and text.

Installing a Cloud based Telephone system does not mean you have to uproot your existing solution. Such systems can be very easily integrated with any existing system. It can execute inbound and outbound calls using the popular communication protocols like VoIP, TCP/IP, RTSP and RTP.


While businesses grow or contract with time, Onsite PBX is not scalable, meaning it cannot be scaled up or down without investing more time and resources. Businesses can reserve spaces for future expansion which they may not ever use thereby paying for unutilized resources.

This problem gets easily solved as Cloud Phone Systems are quite scalable. They can be scaled up or down as per the increase or decrease in the business demand. Businesses can start small and grow their users as the business expands. The pay-as-you-go model of the Cloud Phone System also benefits the seasonal businesses who can add new lines just before a major event and remove them as soon as their purpose is fulfilled.

Secure and Reliable

In terms of security, Cloud based Phone Service is said to be more secure than on-premise PBX. In the case of the former, the security of the solution is maintained by the service provider. The service provider handles all the software details including upgrades, patches, and firewall.  Many providers also host the PBX system on private cloud servers to offer better security to corporate communication.

The service provider has a team of skilled people working to keep all things secure. It also takes precautions against security breaches and attacks. Cloud based PBX has proved to offer a higher level of reliability and redundancy without spending any additional resources.

Back-up and Recovery

Cloud based phone systems have a clear advantage over on-premise PBX when there are any natural or man-made disasters. Due to its cloud-based nature, it helps businesses to continue their communication even in rough times.

The Cloud based PBX Phone System offers flexibility for businesses to communicate with customers from different locations. Any shifting or relocation of business can be achieved without interrupting business communication.

Cloud Phone Service Providers have a highly redundant infrastructure along with dedicated resources and servers in different cities. Therefore, in case of any disasters servers are up and running within seconds.


In today’s world, distributed work environment enables uninterrupted and seamless communication between the business and the customers. It can be achieved smoothly with the help of Cloud based PBX.

The flexibility offered by the Cloud-based Phone System allows the business agents to access the hosted PBX solution from any location if they have internet access. This helps the employees to remain connected even if they are in some remote location or they work from home with the same office number using their preferred device.

With flexibility, Cloud Hosted PBX helps to improve the reachability of the business to customers. Businesses need to connect the virtual or toll-free number to their hosted PBX and receive calls from anywhere they want.

Real-Time Monitoring and Analysis

One of the bonus points that Cloud Based PBX offers over onsite PBX is the access to real-time statistics and monitoring for all calls, agents call rates, costs and more through desktop or mobile. A web portal is usually provided by the service provider for you to check all the reports and analyze them.

This feature helps businesses to make an informed decision by analyzing employees by performance, view call recordings and do many more things with the reporting tool. The reporting tools collect data and present it in simplified ways for businesses to understand and take any necessary action.

How Does Cloud PBX Phone System Works?

In case of cloud based PBX systems, the service provider is responsible for storage and maintenance of the PBX equipment as well as for providing the phone services such as signaling. The PBX system runs various communication features of the phone system such as call transfer, call routing, voicemail, etc.

Why You Should Choose Kloudtalk for Cloud PBX?

If you are looking forward to buying a Cloud PBX, then you can simply rely on KloudTalk. It is cost-efficient, multi-featured, scalable, flexible, secure and reliable and much easier to operate and maintain in comparison to an on-premise PBX system. KloudTalk also offer round the clock support to help businesses with any queries they have. To put it simply, as a small businesses you can get the latest features and more benefits with KloudTalk at a much lower cost. Our technical team will address all your queries so that you can make the right decision. 

Cloud PBX Frequently Asked Questions

Hosted PBX and Cloud PBX are two terms that are often used interchangeably in the world of business telecommunications, but they are not necessarily the same thing.

A hosted PBX system refers to a phone system that is managed and maintained by a third-party provider, who typically hosts the equipment in a data center. The customer leases the phone system and pays a monthly fee to use it.

On the other hand, a Cloud PBX system refers to a phone system that is entirely cloud-based and does not require any physical equipment. The provider maintains the system in the cloud, and the customer can access it from any device with an internet connection.

Cloud PBX and VoIP are two terms that are often confused with each other, but they are not the same thing.

VoIP, or Voice over Internet Protocol, is a technology that allows users to make and receive phone calls over the internet instead of using traditional phone lines. VoIP technology can be used in many different ways, including as part of a Cloud PBX system.

On the other hand, Cloud PBX is a phone system that is entirely cloud-based and managed by a third-party provider. Cloud PBX systems can use VoIP technology to deliver phone service over the internet, but they also offer many other features, such as virtual extensions, automated attendants, and call routing.

The cost of a cloud PBX system can vary widely depending on the provider, the features included, and the number of users. Generally, cloud PBX providers offer several pricing plans to accommodate businesses of different sizes and needs.

Some providers offer pay-as-you-go pricing, which allows businesses to pay only for the features and services they use. Others offer tiered pricing based on the number of users, with additional features available at higher price points.

On average, businesses can expect to pay anywhere from $10 to $50 per user per month for a cloud PBX system. However, some providers may require additional fees for setup, equipment, or additional features.

Note: This blog has been updated on 11th January, 2022

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