5 minute read |

What is a Cloud PBX?

VoIP phone service background
VOIP | VoIP Services

As with any new enterprise technology, the VoIP industry has its fair share of terminology, jargon and marketing terms. Sometimes it can be difficult to differentiate between facts, marketing campaigns and advertising. The same term can refer to different services depending on the vendor and the same service can be given multiple labels by providers, simply to differentiate themselves from the pack.

Anyone who is interested in enterprise VoIP systems will have come across the term cloud PBX and wondered what it means. It can seem especially confusing because it sounds similar to other terms like hosted PBX. Broadly speaking, they all refer to the exact same type of service – phone service with PBX functionality that is delivered online through dedicated or shared data connections.

Cloud PBX

Although this term has become incredibly popular over the last few years, hosted PBX systems have been around for much longer. The reason why it is gaining prominence now is because the PBX functionality is delivered by utilizing VoIP technology instead of circuit switching. Although cloud hosted PBX can refer to conventional analog phone service, in most cases it refers to VoIP.

What makes it different?

Hosted VoIP or cloud PBX is made possible because of new innovations in technology related to the cloud. Instead of each business organizations having to purchase, maintain, and implement its own dedicated enterprise phone system, third party vendors who specialize in VoIP provide these services via cloud computing. It is a win-win situation for both parties, something that can be a rarity in the business environment.

Organizations win as they don’t have to tie up capital that could be better utilized elsewhere. Regular maintenance and periodic upgrades are undertaken by the vendor, ensuring that there is no disruption to the business. If any problem or issue occurs, troubleshooting and support is taken care of by the external contractor. There is no need to hire dedicated personnel to take care of these systems, make configuration changes or add new services.

Cloud PBX vendors win because they are able to utilize cloud technology, multitenant architecture and economies of scale to efficiently provide phone services to hundreds or even thousands of customers at a time. They can leverage their experience, expertise, and capital in areas where it is required the most.

Advantages of Cloud PBX

Change is easy

With traditional on premise PBX systems, organizations found it difficult to make changes quickly. Adding a new line, phone number or instrument could easily take hours or days and most operations required a technician from the phone company to travel to the client office. With the cloud PBX, vendors can deploy a platform at once to thousands of users. Different features and services are added on top of the platform and individual changes can be easily configured by users themselves.

The majority of PBX features and settings can be accessed through online or web-based dashboards. End-users, managers, and administrators can all enjoy different levels of access and privileges. This means employees are able to control individual features, managers can deploy group mailboxes and configure them, whereas administrators can change settings on an enterprise level.

More frequent upgrades with less hassle

With on premise solutions, the upgrade cycle would be tied to the fortunes of the business. An organization that is going through tough economic times may need the latest enterprise features but may lack the capital to upgrade current equipment. Sometimes upgrades are postponed because the organization does not have in-house expertise or cannot afford to hire external consultants.

With the cloud PBX, these issues simply disappear. The service provider will update equipment, features and services more frequently than individual organizations are able to. Conversely, these benefits can be enjoyed by any client, regardless of their financial status – as long as they can pay their monthly phone bills.


Agility and flexibility are practically a necessity for businesses nowadays. Cloud PBX systems are more flexible than their on premise counterparts simply because they can be configured remotely and delivered as a service. Changes can be pushed out at once to multiple clients. The client can easily enable and disable features, depending on their changing requirements. Customers are also charged accordingly i.e. they do not have to pay for features they are not actually using.

These aspects make cloud PBX very valuable for business organizations. They can scale their operations up or down depending on business requirements rather than the availability of financial resources or other unrelated  variables.

Cloud computing has significantly changed the way business organizations work. Many departments, project teams and groups now utilize SaaS (Software As A Service) for daily workflows and the enterprise phone service is no exception. It allows business organizations to utilize the latest technology and exploit advanced features to generate value with none of the hassle and expense of maintaining it themselves.

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Thousands of businesses across the world trust VoIPstudio for all of their most vital business communications. Why not be the next?

Start a free 30 day trial now, no credit card details are needed!