If you've researched business phone systems, you'll have run into the term PBX - and more recently, cloud PBX. It sounds technical, but the idea is simple. Here's what it means.

What is a PBX?

PBX stands for Private Branch Exchange. In plain terms, it's the system that runs a business's internal phone network - routing calls between extensions, handling incoming and outgoing calls, and powering features like menus, hold music and voicemail.

Traditionally, the PBX was a physical box installed at your premises (an "on-premise PBX"). You bought it, housed it, maintained it, and paid an engineer when it needed changes.

So what is a cloud PBX?

A cloud PBX does exactly the same job, but the system lives in your provider's secure data centre rather than in a cupboard at your office. You access it over the internet using VoIP. It's also called a hosted PBX or virtual PBX - same idea.

Instead of owning and maintaining hardware, you simply use the service for a monthly fee, and the provider handles all the technical heavy lifting.

Cloud PBX vs on-premise PBX

On-premise PBXCloud PBX
LocationBox at your officeProvider's data centre
Upfront costHigh (buy hardware)Low (monthly fee)
MaintenanceYour responsibilityProvider's
Changes/movesEngineer neededSelf-service portal
Work from anywhereNoYes
ScalingBuy more capacityAdd seats instantly

We dig into the full money side in our total cost of ownership comparison.

Why businesses are moving to cloud PBX

  • No big upfront spend or ageing hardware to replace.
  • Maintenance and upgrades handled automatically by the provider.
  • Flexibility to work from anywhere and add users in minutes.
  • Rich features included as standard - see our feature rundown.
  • Future-proof ahead of the analogue switch-off.

The bottom line

A cloud PBX is simply your phone system, run in the cloud instead of on a box in your office - with all the cost, flexibility and maintenance benefits that shift brings. For most businesses today, it's the obvious choice. Want to see how a cloud PBX would work for you? Explore our Cloud Telephony service or request a callback.

Frequently asked questions

What is a cloud PBX?

A cloud PBX is a phone exchange hosted in the cloud rather than on your premises, providing call routing, extensions and business phone features over the internet.

How is a cloud PBX different from an on-site PBX?

An on-site PBX is hardware you buy, house and maintain, while a cloud PBX is a managed service with no hardware, lower upfront cost and automatic updates.

Is a cloud PBX suitable for a small business?

Yes. Cloud PBX scales from a single user upward and gives small businesses enterprise-grade features without the cost and complexity of on-site equipment.