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 PBX | Cloud PBX | |
|---|---|---|
| Location | Box at your office | Provider's data centre |
| Upfront cost | High (buy hardware) | Low (monthly fee) |
| Maintenance | Your responsibility | Provider's |
| Changes/moves | Engineer needed | Self-service portal |
| Work from anywhere | No | Yes |
| Scaling | Buy more capacity | Add 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.
