What is VoIP? An explainer on the differences between VoIP and PBX

Before the advent of the internet, the telephone systems of most organisations were based on PBX (private branch exchange) systems. While originally used to describe any system of private network telephony, today the initialism PBX has come to describe a particular type of system that’s a holdover from the days where analogue phone calls were the only technology available. Things have changed…

PBX – a system stuck in the digital jurassic period
These days, PBX applies to private telephone networks that use traditional copper phone lines to physically connect the handsets within an organisation. The PBX acts like the switchboard for all those phones to reach the public network. It means that an office can have as many handsets as it needs without each one needing a dedicated connection to the broader phone network. While still serviceable, PBX technology is verging on obsolete.

VoIP prevails where PBX falters

  1. Analogue PBX systems are difficult and costly to set up. Analogue PBX infrastructure is often logistically challenging, requiring cables to be wired to each individual phone and then into the network as a whole.
  2. PBX infrastructure requires regular maintenance and attention. Due to the physical nature of copper cables and the limitations of analogue transmission, traditional PBX systems can’t operate over more than a few kilometres. Any change to the company’s structure could potentially require major re-wiring of the network.
  3. Depending on how the public phone lines were integrated to the PBX, it is possible that only a few phones could block the entire network from placing outgoing calls.

VoIP systems, however, have none of these drawbacks. By converting analogue call information (the sound of your voice) into digital data, VoIP systems can send a call through any digital transmission network. Because the data is compressed, it can keep up with the speed of the conversation in real time. The only limits to call quality and number of connections your VoIP system can handle is how much bandwidth you have and what sort of package you purchased from your VoIP provider.

What’s more, going digital does more than just save on hardware. Any existing compatible phone can be linked to a VoIP network, but so can any computer, smartphone, or online device with a microphone and speaker. This means VoIP networks are scalable, and can work for businesses ranging from a handful of employees to large-scale enterprises. As Nathan Miller, the CEO and founder of Smart Cloud Phone, says: “the beautiful thing about cloud phone systems is that they are just so non-restricted”.

Upgrade from your PBX today
To find out more about how a VoIP system can just make things easier in your business – and put the power back in your hands – contact Smart Cloud Phone and ask us the hard questions. Just be ready for some good answers.

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