What is the Difference Between Hosted PBX and SIP Trunking?

Are you looking for a better alternative to your old phone system? During your research, you might’ve come across terms like “SIP Trunking” and “hosted PBX” as better alternatives to analog or traditional PBX phone networks. 

What’s the difference between these two and which one is better for your business?

What is hosted PBX?

PBX, or Private Branch Exchange, is a business phone network. An earlier version is called traditional PBX, and this system relies on on-site hardware to make internal and external calls via the public switched telephone network (PSTN). 

Hosted PBX moves everything but the handsets to the cloud, eliminating the need to connect to the PSTN. To make calls, you simply need a good internet connection. It’s called “hosted” because the system is maintained by an offsite, third-party provider.

What is SIP trunking?

Where hosted PBX usually completely replaces a traditional system, SIP Trunking is a gateway that turns your existing on-premises PBX into a cloud-based phone system, complete with advanced VoIP features.

Unlike hosted PBX, SIP Trunking isn’t a third-party service. However, it does have something in common with hosted PBX, which is to move your PBX to the cloud.

Is PBX a SIP server?

Quite the opposite – SIP Trunking acts as an essential server to traditional PBX systems. It handles all the protocols and call routing within the network. 

This allows users to contact each other via the SIP-enhanced PBX network, regardless of where they find themselves. 

Why do businesses choose SIP trunking?

The biggest reason why businesses opt for SIP Trunking is that they already have the on-site PBX system in place. 

That being said, they might also desire the benefits that cloud-based features can offer a business. Since traditional PBX lacks these perks, adding the gateway is a good way to upgrade the system and gain access to several great virtual features. 

Pros and cons of SIP trunking

Besides the ability to upgrade your current on-site PBX, one of the biggest advantages that SIP Trunking offers to a business, undoubtedly, is better security. The reason for this? It doesn’t connect to the public internet like cloud PBX. 

Another benefit that SIP Trunking provides is high-level end-user control; there is no reliance on an outside provider to run the system.

However, SIP Trunking is not smooth sailing all of the time. If you are considering upgrading your traditional PBX with this gateway, it should be noted that the startup costs can be steep, especially when you compare the fees to the starting fees linked to hosted PBX. 

Also, if you like SIP Trunking as an option but you don’t already have all the PBX hardware, then purchasing the equipment will count towards additional expenses. Whether you have on-site PBX or not, opting for SIP Trunking also means that you will have to deal with the costs and logistics of hiring an in-house IT team to maintain and upgrade the system when necessary. 

Pros and cons of hosted PBX

Hosted PBX is popular, mainly because of the benefits of all management and maintenance duties that fall squarely on the third-party provider. Repairs and updates are also normally done remotely and automatically, meaning that your office won’t be disrupted by visiting IT teams.

Since the whole system (apart from the handsets) are off-site, there are also no cables, servers or other hardware taking up space. Installation is quick and the initial setup costs are low. 

Hosted PBX has a major weakness. The call quality depends entirely on the strength of your internet connection, and if you live in an area where there’s no internet reception, hosted PBX won’t work at all. A weak signal can lead to many dropped calls as well.

Differences between Hosted PBX and SIP Trunking

Costs and Pricing

Startup costs are lower for hosted PBX networks. This is mainly because there’s minimal hardware to be installed, and the costs of upgrades and maintenance are also normally included in the provider’s monthly subscription fee. 

SIP Trunking’s higher costs are due to hardware installation and having to accept all the costs surrounding the system’s maintenance with an in-house IT team.

Scalability

Are you planning to grow or downsize your business in the future? The good news is that both SIP Trunking and hosted PBX are simple to scale either way. The process is also quick in both cases, although cloud PBX can take a little bit longer. 

When expanding your company, it’s worth keeping in mind that SIP Trunking is often limited by the on-site PBX system, which can prevent it from being compatible with certain operating systems and applications.

Maintenance

All repairs, maintenance and updates for hosted PBX are the responsibility of your provider, and as mentioned previously, most of these happen remotely. Another great perk is that all costs involved are either carried by the provider entirely, or you pay a small, affordable percentage. 

The same responsibilities for SIP Trunking, on the other hand, fall squarely on you. This can turn out to be a costly affair as you need to budget for IT personnel salaries, as well as the repairs and updates that they need to perform in-house by themselves. 

System Security

Earlier, we mentioned that SIP Trunking is very secure because it doesn’t rely on a public internet connection. While this is true, don’t let that put you off hosted PBX. 

Yes, hosted PBX uses a public internet connection, but most third-provider hosting services are known for offering high-grade security and privacy walls to keep their customers protected.

Which businesses use SIP trunking?

SIP Trunking is a good choice for small, medium and enterprise-level businesses. More specifically, any company that wants to keep its existing phone system because it’s already established and can afford its own in-house maintenance. 

This option is also suitable for companies who do not, for one reason or the other, want to work with a third-party provider but instead keep control over their own phone network.

Which businesses benefit from hosted PBX?

A hosted PBX network is often preferred by small to medium businesses, especially those that need telephony support for different types of teams, including normal office staff, remote workers or a blend of both. 

Hosted PBX is also the best choice for companies that don’t have on-site PBX and also don’t want to be saddled with in-house IT maintenance. 

How United Telecoms can help you

United Telecoms is a Data, VoIP and PBX phone system provider that offers comprehensive solutions and assistance for all your telephony needs. Our consultancy services can help you choose between SIP Trunking and hosted PBX by answering any questions that you may have. 

Feel free to contact us for a chat to discuss which option can take your business to the next level.