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Hosted PBX vs. Virtual PBX ?

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When it comes to Google searches on keywords such as “Business Phone Service” – one can get lost in the myriad of options: “PBX, VoIP, Hosted PBX, Virtual PBX”… .

One of the challenges facing entrepreneurs and business executives looking for new communications provider is having an ability to understand the difference between technology solutions. It’s hard to choose something if you don’t understand it. It’s even harder to make it work for your business. Not that you have to be an I.T. engineer, but there’s no way to make a good choice without learning something about VoIP basics. You’re going to have to make a business decision and you can’t make a good one if you don’t understand what it can or can’t do because you don’t understand the vocabulary. Here I will try to explain the differences between Hosted and Virtual PBX services.

A Hosted PBX service is in essence a complete Unified Communications Suite providing functionality of an advanced business phone system and more. It offers traditional outbound calling features, call routing, desktop handsets, voice mail, and numerous business call control features such as transfer, 3-way, call parking, conferencing, video etc. Hosted PBX users can be in the same location or geographically disbursed while maintaining the call control features that they need on a daily basis.

A Virtual PBX service provides an automated attendant service which is simply a subset of a Hosted PBX functionality without all of the call control capabilities. Simple speaking you can’t make an outbound call using it. Virtual PBX services take calls for your business and then reroute calls to your phones (land line or cell phones) which can be looked upon as extensions via call forwarding. The calls are forwarded on to employees or locations anywhere in the world. As with a Hosted PBX service, there is no need to purchase or maintain hardware and/or software – but Virtual PBX service has no call control features for your business to take advantage of. Your various users and locations must each have a separate phone service. Calls between them are not free. Virtual PBX service lacks most productivity benefits of unified messaging or presence. You also have to pay for call forwarding provided by Virtual PBX service provider for the entire duration of that call on top of what you are already paying your carrier.

It’s because of these limitations that a Virtual PBX is usually suitable for very small business (typically 1 to 5 people) that operate using land lines or cell phones but wish to have a presence of a business with an Auto Attendant and an IVR tree. Virtual PBX Service is not necessarily going to be less expensive than a full Hosted PBX Service but it may only take minutes to set up.

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