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Is a cloud phone system a PBX?
PBX named a switch in a cupboard, and the word outlived the hardware. What cloud PBX and hosted PBX mean on a quote, and the questions that settle it.
John · Owner and CEO · 4 min read · · updated
Yes and no, and the ambiguity is the point. PBX named a private branch exchange, a switch you owned. Vendors now sell cloud PBX, hosted PBX and cloud phone system for overlapping things. The label on a quote will not tell you what you are buying. Four questions will.
This article is about the vocabulary. If what you actually want is the buying decision, on-premise PBX against a cloud phone system works through the money, the outage and the move, and this one deliberately does not repeat it.
What PBX actually meant
A private branch exchange was a switch inside your building. Outside lines arrived from the phone company, internal extensions ran to desks, and the exchange connected the two. It was private because it was yours, a branch because it hung off the public network, and an exchange because switching calls is what an exchange does.
Everything in that sentence is about a physical location. That is why the word travels badly. What a PBX phone system is covers the equipment itself in more detail.
The words on a quote, and what each usually means
None of these terms is defined by a standards body. What follows is how they are generally used, not what they are guaranteed to mean.
- PBX or on-premise PBX. Switching hardware in your building, owned by you, maintained under a contract.
- IP PBX. The same thing, but speaking VoIP internally instead of running analog or digital extensions. Still in your building.
- Hosted PBX. The switching runs in the supplier's building. Often implies an instance reserved for you.
- Cloud PBX. Usually the same as hosted, sometimes a shared platform rather than a reserved instance.
- Cloud phone system or UCaaS. The same function again, usually sold per person per month, and usually with messaging and meetings attached.
- PBX replacement. A marketing phrase, not a product category. It tells you what the vendor wants you to stop paying for.
Two of those describe equipment you own. Four describe a service you rent. The line between them is the only distinction that changes what you are responsible for.
The regulator draws its line in the same place rather than by product name. The FCC's Voice Telephone Services report counts interconnected VoIP as a category of its own, separate from switched access lines, and says nothing about whether the vendor calls it a PBX. What is being counted is how the service works, not what it is marketed as.
Four questions that settle it
Ask these of any quote and the label stops mattering.
- Where does the switching run? In my building, or in yours? This single question sorts every term above into one of two piles.
- Who owns the licence, and what happens to it if I leave? A perpetual licence you own behaves nothing like a subscription that stops.
- What happens to my numbers if I leave? They should be portable to another provider regardless of the label. If the answer is vague, that is the answer.
- Is there any hardware on my premises at all? Handsets, a gateway for an alarm panel or a fax, a session border controller. "Cloud" rarely means nothing in the building.
The layer diagram is what the words are really describing: which parts run in your building, and which belong to somebody else.
Reuse this figure anywhere, including commercially, with credit to Ringfully and a link back to this page. CC BY 4.0.
Why the label matters less than the answers
A supplier calling their product a cloud PBX and a supplier calling theirs a cloud phone system may be selling you the identical thing. A supplier calling their product a hosted PBX may be selling you a dedicated server you are renting, with an upgrade path you pay for. You cannot tell from the noun.
The layer diagram above is the honest version of the comparison, because it describes responsibility rather than branding. Everything in your column is yours to fix at four in the morning, whatever the quote calls it.
If the cloud half needs explaining before any of this is useful, what VoIP is and how it works separates the line, the switch and the carrier.
What we do not do
We do not sell, install, maintain or remove PBX hardware, and we have no office anywhere and no technician to send to a site. We cannot rewire a building or take responsibility for the network inside it. Numbers are provisioned by hand rather than bought from a page, and there is no self-serve signup.
More on the fundamentals is on the VoIP basics topic page. What a seat costs, and what the allowance and the rates past it are, is on the pricing page.
Questions people ask
- What is the difference between a PBX and VoIP?
- A PBX is equipment that switches calls between your internal phones and the outside lines. VoIP describes carrying calls over an internet connection instead of over dedicated phone lines. The two are not opposites, and there are on-premise systems that use VoIP internally. The question that actually separates products is where the switching runs and who owns it.
- Is cloud PBX the same thing as hosted PBX?
- Usually, but not reliably. Both normally mean the switching runs in the supplier's building rather than yours. Some vendors use hosted PBX for a dedicated instance reserved for you and cloud PBX for a shared platform, and some use them interchangeably. Neither term is defined by any standards body, so ask what it means on the quote in front of you.
- Does a cloud phone system still have a PBX in it?
- Functionally yes. Something still has to answer a call, decide where it goes and connect the two halves, which is what a branch exchange did. What changed is that the thing doing it is software in somebody else's building, shared with other customers, and rented by the month rather than bought once.
- Can I keep my phone handsets if I move off a PBX?
- Sometimes. Handsets that speak SIP can often be reprovisioned to a cloud provider, and handsets locked to a specific vendor's system usually cannot. Ask for the make and model list before anybody quotes you for replacements, because handsets are frequently the largest line in a migration quote and also the line most often padded.
- How long does an on-premise phone system last?
- The hardware often runs far longer than it is supported. The date that matters is not when it fails, it is when the manufacturer stops issuing software for it, because after that a security problem has no fix and a replacement part is whatever you can find secondhand. Ask your maintainer for the end-of-support date in writing.
About the author
John
Owner and CEO
Owner and CEO with over 10 years of experience in the IT industry, including more than 5 years specializing in VoIP and cloud communications. Experienced in designing, deploying, and supporting reliable communication solutions for businesses.
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