Cloud PBX: What is cloud PBX and How does the system work?

All you need to know about the cloud PBX phone system

What is the cloud PBX system?

A cloud or hosted PBX (public branch exchange) is a cloud computing system where data is stored and exchanged over the internet instead of a hardware device. This virtual system provides reliable and safe business phone system over the internet.

How the hosted PBX system works?

Cloud technology system depends on the internet. To use this technology, you must have a VoIP or other IP system in the office. This hosted system will work by connecting your internet phone or IP for its internet connection.  Since the system is internet-based, you can access your cloud PBX from anywhere. All you need is internet connectivity and your logins.  Your PBX service provider will store and manage the data on your cloud PBX and also backup the important information. 

The difference between cloud PBX and onsite PBX

Hosted PBX vs. traditional PBX

Cloud or hosted PBX is internet-based and is not in a physical location in the business while onsite, on-premise or traditional PBX refers to PBX where everything is in the hardware which is being run by the business servers. It is at the location. 

The advantages and disadvantages of the cloud PBX systems

Cloud PBX has its advantages and disadvantages as we have elaborated below:

Cloud PBX advantages; what PBX provides for your business
  • This phone system gives room for the business to grow. 
  • Generally, cloud PBX is cheaper because it does not require the high costs of installation and system maintenance. 
  • Cloud-based PBX does not confine a business to a certain office location. The business can manage virtual office across the globe. 
  • Cloud-based PBX provides more flexibility to the business in terms of updates in the phone system. Updates here are simple and does not require hardware updates or integration issues. 
Cloud PBX disadvantages
  • There are security concerns due to the nature of cloud storage. It is best to go for cloud PBX solutions that are well known for its security. 
  • In this system, businesses communicate over the internet. Phone calls will depend on the strength of your internet connectivity. In case of a slow connection, your calls will hang or potentially get dropped. 

What are the features of a cloud PBX system?

As a business owner, you would want to know what this hosted PBX system can do for your business and why you should choose cloud PBX. Listed are the features of the cloud PBX:

  1. Call recording features
  2. Voicemail transcription
  3. Call groups
  4. Call queues
  5. Virtual attendant
  6. Reporting and analytics
  7. Call whisper
  8. Call barge
  9. Online user interface
  10. Automated call distribution
  11. CMS and CRS integration
  12. Live call monitoring
  13. Fully automated software upgrades and data backups 

The system has many other features users can enjoy. Not all VoIP providers are the same; the features named above are some of the common ones amongst the major service providers and are mostly free. This system will connect your phone calls to mobile networks and traditional phone or landlines, and vice versa. 

How to set up cloud PBX?

Setting up the cloud PBX system is generally very fast and relatively simple. Customers and clients are usually up and running in less than a business day, just a couple of hours. After signing up to a cloud PBX solution, businesses can personalize their PBX, add new users, phone numbers, etc. 

This service can be accessed anywhere around the world. All you need is a stable internet connection and an operating system that supports hosted PBX.

The costs of cloud PBX vs. traditional PBX

The total cost of running a traditional PBX system is about $5,000. This amount includes the installation fees, fees for new equipment, and an hourly fee for an operator. This fee is usually around $10 per hour. This is very expensive compared to having a cloud PBX system. Even without an operator, the bill can reach up to $400, for the internet and general upkeep.

Hosted PBX is quite cheaper. A lot of the service providers offer a lot of the features for free. Most of the premium features costs between $10 to $20 per month. Some plans start from as low as $4 per month. The choices are endless; it all depends on which service provider you go for. 

What is the difference between virtual PBX and IP PBX?

A virtual PBX system requires less hardware and maintenance compared to an IP-based PBX. In the virtual system, your business only needs IP phones and a computer with a stable internet connection whereas with the IP PBX, you own the PBX system and operate in from your office. 

Each system has its advantages, but the virtual PBX is considered far superior. On top of the already discussed advantages of affordability, flexibility, and scalability, virtual PBX also comes with the following extra features that are very useful:

  • Unlimited extensions
  • Faxing
  • Auto-attendant
  • Music on hold
  • Custom greetings
  • Dial-by-name directory
  • Voicemail

What is SIP trunking?

Sip trunking is a way for business phone systems to work using the internet. It gets rid of the physical connection to a phone company. This lack of hardware also comes with the advantage of cost, reliability, and ability to easily scale your business. 

Does your contact center need cloud PBX?

There are cloud service providers that focus on bringing the best out of your contact center. They make it easier for the call operators to view the details of the incoming calls, record the calls, forward the calls, start conference calls, and perform other on-call actions. The service also enables supervisors to analyze how well the contact center is doing by going through the data. This will eventually lead to better productivity and hence, will improve your business. 

The best cloud PBX and cloud phone systems

Top cloud PBX systems for your business phones

The demand for cloud-based PBX has massively grown over the years. Hence, numerous companies offering these services. Due to the nature of this cloud-based system and security concerns, choosing the right service provider is very crucial. Below are some of the top-ranked companies that offer cloud PBX services. 

1. RingCentral

RingCentral is a popular provider of cloud-based communications solutions, which includes all PBX services and administration functions. Unlimited calling; that is video calls and phone calls, is one of the outstanding features of RingCentral. This could mean unlimited and uninterrupted meetings.
After signing up, a specialist will be assigned to you to assist you in determining the number of phones you need, and also help you in creating new numbers and transferring the over the old ones. 

When it comes to pricing, RingCentral has three packages catering to small businesses. The RingCentral Office Essentials package is $19.99 per month, the standard package is $24.99 per month, and the premium package is $34.99 per month. RingCentral also has an ultimate package that will cost you $49.99 per month. All the packages come with free calls, unlimited business SMS, and mobile apps.

The packages also come with unlimited video and audio calls and screen sharing options in all devices. The number of users who can participate in screen-sharing is, however, determined by the package. There is a request demo option for RingCentral.

2. Virtual Office by 8×8

8×8 Inc. is another top-rated provider for cloud communications. 8×8 offers cloud-based video, contact center, mobile, voice, and unified communications from small to enterprise businesses. This unified communication system is simple and easy to use. Some of its features include collaboration, calling, and mobile apps. 
As it is cloud-based, users can access call logs, billings, and support via their online portal with administrators having the ability to create and set up extensions. 

There are three packages under 8×8, and they all come with unlimited calling, business SMS, online call management, auto-attendant, and mobile apps. For pricing and subscription, you need to contact their sales team.

3. Vonage Business

Vonage Business provides its subscribers with online collaborations and video conferencing. This solution is suitable for both small and midsize businesses who get access to a web-based console. The subscribers can view the setup guide, extension numbers, and the number porting tool. There are also a number of plugins and services available for clients, some of which are free. 

Vonage has three plans; the mobile plan starts at $19.99 per month. This package comes with unlimited calling and massages, desktop app, mobile app, and Vonage flow team messaging. The second plan from Vonage is the premium package, which starts at $29.99 per month per user. This package comes with additional features which include online meetings, conference calling, video conferencing, CRM integrations, and multi-level auto attendant. 

Vonage top tier plan costs $39.99 per month. This package comes with all the features of the other two plans plus additional features such as Vonage Visual Voicemail and on-demand call recording. Vonage Business offers a 14-day free trial for its PBX service packages.

4. Ooma Office

Ooma Office is another popular cloud-based PBX solution. It is good for small and enterprise-level businesses. One of the popular features of Ooma is the fact that it does not tie the clients to a contract or any kind of commitment. That is to say; a user can set up with Ooma and can leave at any time they want without being penalized. 

Moreover, there are additional features, such as call transfers, multi-level receptionist, extensions, and conferencing features. There is also the Ooma phone system where employees can access the Ooma features via their smartphones even when out of the office.  Ooma is particularly pocket-friendly because it has a flat rate of $19.95 per month for small businesses.

5. Jive Voice Software

Jive is also a top-rated cloud-based unified communications solution. It serves businesses of all sizes with features such as video conferencing, contact center, business VoIP, which are all cloud-based. 
Their integrated suite has features such as PBX call routing system, conference calling, call recording, automatic call distribution, broadband internet, internet fax, softphone, and many more.  From the online portal, users can customize and control the different aspects of calling. The cost of using Jive is $29.95 per user for four users. This prize per user reduces as the number of users increases.

6. MegaPath; a solution for unified communications?

MegaPath is a telecommunications provider that offers unified communications, managed networking, internet connectivity, and security services. 
MegaPath unified communications service includes online chat and collaboration, combined phone, and video calling. Subscribers are able to host video and voice conferences, share their desktop screens, and start groups. 

The online portal enables users to manage and control features like conference calls and call routing, and also get support. The voicemails cal also be transcribed and accessed through faxes and email in PDF format. The loud PBX package from MegaPath starts from $19.99 per month. Desktop apps, mobile apps, audio conferencing, web conferencing, automated attendant, and instant messaging are all included in the package. MegaPath has a 15-day free trial.

Other cloud PBX services to consider


Dialpad is also considered a top cloud PBX service provider. Dialpad, which runs using Google’s Cloud, has video and voice conferencing services. It also has AI, which helps your business to improve efficiency, improve profit, and retain your customers. Pricing starts around $20 per user but would be slightly more if you were to access all the features. 

Microsoft Phone System

As part of the Microsoft Team, Microsoft Phone System offers full integrations with the Office 365 suite. It also offers the standard web conferencing, calling, and chat. 


Aircall is entirely cloud-based. This makes it particularly effective on mobile devices. It offers the standard features plus a number of integrations such as Zoho, Zenesk, SalesForce, Shopify, and Freshdesk. 


This is a virtual phone system that offers call forwarding and answering services. Calls are answered using their automated phone assistant and then forwarded to the right department or person. Grasshopper focuses on small business. This service is also integrated with Google Voice. Skype, Bitium, and LiveChat.

Grasshopper has a number of plans that range from $26 per month to $89 per month. 

MiCloud Connect

This cloud PBX solution is more suited to enterprises than small businesses. It comes with a lot of the standard features that improve business operations, including CRM. 


This hosted PBX solution manages the call center operations of its users. Fashcaller has features such as auto-receptionist tools, call monitoring and blocking, multi-level interactive voice response (IVR), customer interaction history, and many other features. 

Users can see the details on an incoming call, transfer calls, set up conferences, and make in-call actions. Freshcaller can also be used for analyzing the performance of the call center.

Concerns over the use of cloud technology

The nature of this cloud technology has led to controversy and concern, especially when it comes to security and privacy.  A lot of the customers are wary about their information that is entrusted to the service providers. Customer contact information and a lot of the business data are entrusted to the companies that offer the cloud PBX solutions. There are privacy policies set up by most of the cloud service providers to govern the use of this information. 

Security is the primary selling points for these cloud service providers. It is their responsibility to protect your data, and if there is a security breach, the reputation of the company will take a major hit. It is in the interest of the service provider to, therefore, ensure absolute security.  These concerns should, however, not deter businesses from switching to hosted PBX. Privacy and security concerns are always there when it comes to everything you do over the internet; the risk is always there. However, with proper regulations and strong passwords, your data will be safe and secured. 

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