{"id":34751,"date":"2020-07-06T22:47:22","date_gmt":"2020-07-06T22:47:22","guid":{"rendered":"https:\/\/www.ringcentral.com\/blog\/?p=34751"},"modified":"2025-01-22T23:11:36","modified_gmt":"2025-01-23T07:11:36","slug":"on-premises-pbx-vs-hosted-pbx-whats-the-difference","status":"publish","type":"post","link":"\/us\/en\/blog\/on-premises-pbx-vs-hosted-pbx-whats-the-difference\/","title":{"rendered":"On-premises PBX vs hosted PBX. What\u2019s the difference?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Terms like on-premises private branch exchange (PBX) might be confusing, but implementing this technology promotes cost-savings and stronger internal and client communications. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">A PBX phone system routes calls to the appropriate numbers so it can handle high volumes of calls efficiently, and callers will never receive a busy signal.<\/span><\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p style=\"text-align: center;\">\u2b50 <strong>What is UCaaS?<\/strong> \u2b50<\/p>\n<p style=\"text-align: center;\">Everything you need to know about unified communications. For beginners.<\/p>\n<p><center><span style=\"font-weight: 400;\">\t<\/p>\n<div class=\"download-form-widget enterprise-download-form\" data-url=\"https:\/\/netstorage.ringcentral.com\/documents\/unified-communications-as-a-service.pdf\" data-id=\"69d7caaec9a0b\" id=\"69d7caaec9a0b\">\n\t\t<button tabindex=\"on\"  on=\"tap:69d7caaec9a0b.toggleClass(class='open')\" class=\"open-modal-download-action download-form-button\" type=\"submit\">See the guide<\/button><\/p>\n<div class=\"download-form-modal\">\n<div class=\"download-form-modal-body\">\n<div class=\"download-form-modal-content\">\n<div class=\"download-form-modal-title\">What is cloud communications? Here's our complete guide.<\/div>\n<form class=\"download-form ENTERPRISE\" method=\"post\">\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<input class=\"download-form-input\" aria-label=\"Full Name\" aria-required=\"true\" aria-invalid=\"false\" type=\"text\" name=\"fullname\" placeholder=\"Full Name\" data-dl-events-hover=\"true\" data-dl-element=\"text\" data-dl-additional-info=\"enterprise download form\">\n\t\t\t\t\t\t<\/div>\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<input class=\"download-form-input\" aria-label=\"Email (please enter a work email address)\" aria-required=\"true\" aria-invalid=\"false\" type=\"email\" autocomplete=\"on\" name=\"email\" placeholder=\"Email (please enter a work email address)\" data-dl-events-hover=\"true\" data-dl-element=\"email\" data-dl-additional-info=\"enterprise download form\">\n\t\t\t\t\t\t<\/div>\n<div>\n\t\t\t\t\t\t\t<input type=\"hidden\" name=\"popup_form\" value=\"1\">\n\t\t\t\t\t\t<\/div>\n<div><input type=\"hidden\" name=\"Asset_ID__c\" value=\"ODAM-02215\" class=\"download-form-input\"><\/div>\n<div>\n\t\t\t\t\t\t\t<input type=\"hidden\" name=\"Lead_Entry_Source__c\" value=\"RC Blog Enterprise\" class=\"download-form-input\"\/>\n\t\t\t\t\t\t<\/div>\n<div class=\"download-form-part\">\n\t\t\t\t\t\t\t<button class=\"download-form-submit\" type=\"submit\" data-dl-element=\"button\" data-no-auto-dl=\"true\" data-dl-additional-info=\"enterprise download form\" data-dl-name=\"Download Now\">Download Now<\/button>\n\t\t\t\t\t\t<\/div>\n<\/p><\/form>\n<p> \t\t\t\t\t<button on=\"tap:69d7caaec9a0b.toggleClass(class='open')\" role=\"button\" tabindex=\"0\"  class=\"download-form-modal-close\"><\/button>\n\t\t\t\t<\/div>\n<div class=\"download-form-modal-thank\"> Enjoy!<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>\t<\/span><\/center><\/p>\n<hr \/>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For organizations with multiple offices or remote workforces, a PBX system can forward calls to any desk phone or mobile phone within the organization, meaning seamless client service and cross-location collaboration.<\/span><\/p>\n<p><span data-sheets-root=\"1\">Understanding the differences between on-premises PBX and <a class=\"in-cell-link\" href=\"https:\/\/www.ringcentral.com\/office\/features\/virtual-pbx\/overview.html\" target=\"_blank\" rel=\"noopener\">hosted PBX<\/a>, as well as their costs and risks for your organization can help you make a more informed decision about which system to implement. <\/span><\/p>\n<h2><b>What is on-premises?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When software is \u201con-premises,\u201d it means that the servers are located on site. Organizations that host software on site have a room dedicated to data hardware, which is managed by employees. The opposite of on-premises software is hosted software, which means that the data is managed by an <a href=\"https:\/\/www.ringcentral.com\/internet-phone-service.html\">internet phone service<\/a> provider.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While hosted systems are more suited to organizations that don\u2019t have an IT infrastructure, on-premises software offers more flexibility and scalability for large and growing organizations.<\/span><\/p>\n<h2><b>What is private branch exchange (PBX)?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">A private branch exchange (PBX) is a telephone system that switches calls between users on local lines while providing all users of the system with a certain number of external phone lines. This saves organizations money as opposed to having to purchase a separate external phone line for every user.\u00a0<\/span><\/p>\n<h2><b>What is on-premises PBX?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The \u201con-premises\u201d tag before a PBX system refers to where the PBX is hosted. On-premises PBX uses IP routing technology for phone calls. It can incorporate voice over internet protocol (VoIP) software, which means that phone calls are transmitted over the internet as opposed to over a traditional phone line.<\/span><\/p>\n<p><a href=\"https:\/\/www.ringcentral.com\/what-is-a-voip-number.html\"><span style=\"font-weight: 400;\">VoIP<\/span><\/a><span style=\"font-weight: 400;\"> offers other features like <\/span><i><span style=\"font-weight: 400;\">voicemail to email, <\/span><\/i><span style=\"font-weight: 400;\">which sends a recording of a voicemail message to a user\u2019s email address; <\/span><i><span style=\"font-weight: 400;\">simultaneous ring, <\/span><\/i><span style=\"font-weight: 400;\">which means phone calls are sent to a user\u2019s desk phone and cell phone; and <\/span><i><span style=\"font-weight: 400;\">call logs, <\/span><\/i><span style=\"font-weight: 400;\">to give your organization a deeper look at call analytics.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Organizations that manage VoIP software only pay for internet versus paying for internet and phone service separately. While the internet is hosted on site, so too are phone calls when organizations use VoIP and on-premises PBX, which gives organizations greater flexibility for calls and conferencing options.<\/span><\/p>\n<div class=\"rc-subscribe\" id=\"new-rc-subscribe\"  style=\"background-image:url('\/us\/en\/blog\/wp-content\/themes\/ringcentral\/assets\/images\/temp\/subscribe.png')\">\n\t\t<button class=\"close js-popup-close\"><svg class=\"icon_close_mobile\" width=\"20\" height=\"20\"><use xlink:href=\"#icon_close_mobile\"><\/use><\/svg><\/button><\/p>\n<div class=\"rc-subscribe__wrapper\">\n<div class=\"rc-subscribe__wrapper_text\">\n<h3 class=\"rc-subscribe__title h2\">Stay informed with RingCentral<\/h3>\n<div class=\"rc-subscribe__subtitle\">Subscribe to our emails for the latest blogs, events, and exclusive content on AI-powered communication solutions. Stay ahead with insights and tips from the leader in trusted AI communications.<\/p>\n<p>\t\t\t\t\t<a href=\"https:\/\/www.ringcentral.com\/legal\/privacy-notice.html\" target=\"_blank\" data-dl-name=\"Privacy Notic\" data-dl-element=\"link\" data-dl-additional-info=\"social\" rel=\"noreferrer noopener\">Privacy Notice<\/a>\n\t\t\t\t<\/div>\n<\/p><\/div>\n<div class=\"rc-subscribe__wrapper_form\">\n<form class=\"\" data-event-init=\"true\" novalidate data-js-form>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<input\n\t\t\t\t\t\t\t\tname=\"email\"\n\t\t\t\t\t\t\t\tplaceholder=\"Email address *\"\n\t\t\t\t\t\t\t\ttitle=\"Must be valid email. example@yourdomain.com\"\n\t\t\t\t\t\t\t\tminlength=\"4\"\n\t\t\t\t\t\t\t\tmaxlength=\"255\"\n\t\t\t\t\t\t\t\ttype=\"email\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tpattern=\"[a-z0-9._%+\\-]+@[a-z0-9.\\-]+\\.[a-z]{2,}$\"\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\tautocomplete=\"on\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-events-hover=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"email\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"LET'S WORK TOGETHER\"\n\t\t\t\t\t\t\t\taria-label=\"Email address *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"email-subscribe-errors\"\n\t\t\t\t\t\t><br \/>\n\t\t\t\t\t\t<span class=\"field__errors\" id=\"email-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<select\n\t\t\t\t\t\t\t\tname=\"Country__c\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\taria-expanded=\"false\"\n\t\t\t\t\t\t\t\taria-label=\"Country *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"country-subscribe-errors\"\n\t\t\t\t\t\t><option value=\"\" disabled=\"disabled\" selected=\"selected\">Country<\/option><option value=\"Canada\">Canada<\/option><option value=\"United_States\">United States<\/option><\/select><\/p>\n<p>\t\t\t\t\t\t<span class=\"field__errors\" id=\"country-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<button type=\"submit\" data-event-init=\"true\">Subscribe<\/button>\n\t\t\t\t\t<\/div>\n<\/p><\/form>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"confirm-form\" role=\"status\" aria-live=\"polite\" style=\"display: none;\" aria-hidden=\"true\">\n<div class=\"confirm-form__text\">Thank you for your interest in RingCentral<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>&nbsp;<\/p>\n<h2><b>What is hosted PBX?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Hosted PBX is where the provider is responsible for housing the PBX system at their location, as well as managing the technology required to maintain the phone system. The phone lines will plug into a router that sends the calls, signaling, and features to a provider to handle.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">With a hosted PBX system, the provider will charge a monthly cost, however, are also responsible for maintenance and feature updates, which takes the load off of organizations\u2019 IT departments.\u00a0<\/span><\/p>\n<h2><b>What are the pros and cons of on-premises versus hosted PBX?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">For larger organizations or those making a lot of phone calls, on-premises PBX offers more flexibility for users, and VoIP can save organizations of calling costs. However, organizations that cannot afford higher installation costs or do not have a dedicated IT professional on site might be better off using a hosted PBX system instead.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Purchasing and installing an on-premises PBX system involves buying hardware and software, as well as dedicating a space on site to setup a data hardware room. Organizations then have to train their IT departments on how to maintain the PBX system. On the other hand, hosted PBX systems take the pressure off of organizations to front these initial costs, but organizations have to pay a monthly fee to providers, which makes hosted systems more expensive in the long run.<\/span><br \/>\n<b><\/b><\/p>\n<h3 class=\"heading h3\"><b>Pros of on-premises PBX<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Gives organizations the ability to control users<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Can use current phone carrier<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Integrates with VoIP to save on calling costs<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Reduces expenses over time, after expenses are covered<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Ability to SIP trunk to get lower-cost calls<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">On-premise IP-PBX provider will qualify network, install and program system, and train staff<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Supports organizational scalability, as it\u2019s easy to add and remove users with no additional cost<\/span><\/li>\n<\/ul>\n<h3 class=\"heading h3\"><b>Cons of on-premises PBX<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Higher initial set up and installation cost<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Need dedicated and trained IT personnel to attend to technical issues<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Organization is responsible for maintenance cost<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Organization must maintain premise at which to host PBX system<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">PBX failure will stop business operations unless an organization has a SIP provider<\/span><\/li>\n<\/ul>\n<h3 class=\"heading h3\"><b>Pros of hosted PBX<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lower initial cost and set-up cost, no on-premises hardware required<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Providers are responsible for updating new feature sets\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\">Adding <a class=\"waffle-rich-text-link\" href=\"https:\/\/www.ringcentral.com\/how-does-virtual-phone-number-work.html\">virtual numbers<\/a> is easy<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Moving the phone system is easy, because there\u2019s no data hardware to manage<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Loss of internet does not affect business operations, because provider can send calls to voicemail<\/span><\/li>\n<\/ul>\n<h3 class=\"heading h3\"><b>Cons of hosted PBX<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Call quality is directly related to strength of internet connection\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Network qualification is performed by the organization<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Feature upgrades come at an additional cost<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Limited flexibility hinders adding and deleting new users easily<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Customization depends on provider<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Recurring monthly payment in perpetuity\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Stability of provider is not guaranteed<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Terms like on-premises private branch exchange (PBX) might be confusing, but implementing this technology promotes cost-savings and stronger internal and client communications. A PBX phone system routes calls to the appropriate numbers so it can handle high volumes of calls efficiently, and callers will never receive a busy signal. &nbsp; \u2b50 What is UCaaS? \u2b50 &#8230;<\/p>\n","protected":false},"author":29,"featured_media":34753,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17901],"tags":[],"class_list":["post-34751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-leadership"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.3 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>On-premises PBX vs hosted PBX. What\u2019s the difference? | RingCentral Blog<\/title>\n<meta name=\"description\" content=\"Find out the difference between hosted PBX vs on-premises PBX. 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