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7 Reasons Why You Should Prefer Cloud PBX over Onsite PBX

A PBX System has become an important requirement all business enterprises owing to the increasing communication needs. Choosing a PBX System is often a confusing task as there are several providers offering similar type of solutions. Also, many business owners get confused whether to choose an Onsite PBX or a Cloud PBX. Before understanding the difference between Onsite PBX and Cloud PBX, let me explain you a little about both these PBX.

Cloud PBX

Cloud PBX 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.

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

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

Onsite PBX

Onsite or On-premise PBX is the traditional PBX phone system. In this phone system, all the hardware are 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 proper skilled full-time maintenance. In addition to this, the onsite PBX needs service and support from an in-house IT team.

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 PBX 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 Cloud PBX, businesses have to pay for the services that they opt for thereby saving both cost and technical know-how necessary to set up a system.

Further, Cloud PBX is independent of any geographical location. Using this 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 where the onsite PBX system offers a handful of standard features to support the multi-channel communication, Cloud PBX, on other hand supports multiple mediums of communication including the basic expectations of voice, video and text.

Installing a Cloud PBX phone system does not mean you have to uproot your existing solution. The Cloud PBX 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 friendly, 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 is easily solved with Cloud PBX. Cloud Phone Systems are easily 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.

Security and Reliable:

In terms of security, Cloud PBX Phone systems are said to be more secure than on-premise PBX. In Cloud PBX, 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 PBX has proved to offer a higher level of reliability and redundancy without spending any additional resource.

Back-up and Recovery:

Cloud PBX has 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 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. And 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. And it is achieved smoothly with the help of Cloud 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 analyse them.

This feature helps businesses to make an informed decision by analysing 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.

In conclusion, Cloud PBX Phone systems are cost-efficient, multi-featured, scalable, flexible, secure and reliable and much easier to operate and maintain in comparison to an on-premise PBX system. Cloud Phone Service Providers also offer round the clock support to help businesses with any queries they have. In other words, small businesses can get the latest features and more benefits with a Cloud PBX system at a much lower cost.

Note: This blog has been updated on 6th Sep, 2021

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