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Hosted Voice vs. PBX and SIP Trunking — How to Choose the Best VoIP Solution

For most medium sized businesses, say with fewer than 200 employees in any one office, there are two viable approaches to handling telephones:  PBX (private branch exchange) solutions — which have been the go-to solution for many years now, and hosted voice (hosted VoIP). 
Putting PBX on premises is actually a form of VoIP (voice over internet protocol) — but the infrastructure is actually built out on site. There is quite a bit of equipment to be placed in a data center, and there is definitely a corresponding capital expenditure up front. Individual extensions are handled locally on a LAN.
Hosted voice on the other hand leaves all of the physical infrastructure to a network services provider. Ideally — in a perfect world — this would be the same provider that is your ISP, because keeping voice and network data all on net ensures that your provider is going to deliver beautifully managed connections, and any hiccups can be handled on one phone call. BUT — if you are already in a DIA or business broadband contract, hosted voice is easily arranged with any other provider you choose; so be sure to negotiate on price and get a deal that you are happy with. 

So how do you choose? PBX or hosted voice? Which is the better voice solution for me?

I’m glad you/I asked. Having talked with many, many IT directors about their options, I can virtually guarantee that price is going to be the first point of consideration.

Breaking down the relative advantages of PBX vs. hosted voice:

Capex and up front costs. There’s no way to sugarcoat this: getting a PBX up and running is going to be costly up front. Just how pricy runs relative to the number of extensions, but $25,000 or more for a mid-sized office is not at all uncommon. More than 100 lines may run closer to $60,000. Again — this is just the price to fit out your computer room: data costing extra, and you can’t serve a satellite office with the gear at HQ. Hosted voice can be rolled out anywhere at all. Even to telecommuters or temp teams. 
On the other hand, you could just use our equipment. Hosted voice providers like YellowFiber will handle all of the capex, and are happy to sell or lease handsets — or you can bring your own. With leased or already owned phones, startup costs can be nil. You have a set monthly expense, and the provider worries about keeping the equipment and configuration good to go. If your ISP is also your hosted voice provider, they can absolutely guarantee QoS. It’s almost a no brainer to keep everything on one optimized network. 


Hosted voice solutions are trivial to grow up or down with your personnel and office space strategy. PBX involves judging how many seats you will need to serve with voice for years to come. If mergers or acquisitions are a possibility, you really need to consider how married you are to that site and that solution. If there’s real doubt, hosted voice is the better call. (I apologize for the pun)

Cost of Calling

International calling is the real generator of costs here. Despite the fact that both hosted voice PBX’s using SIP trunking (rather than doing international calling through an old-school phone company) are using the internet to carry calls, there are still going to be costs on the provider’s part that they will have to pass along to you one way or another. Be sure to ask questions. If your company has specific international operations or needs in specific countries, put that on the table when getting quotes. 


There’s great peace of mind when your provider is under a tight SLA and is taking full responsibility from the network to the infrastructure. Hosted voice also pushes all the time and trouble and expense of handling updates, replacing handsets and hardware and support. Typically everything is bundled into one manageable bill — and discounts are definitely available when getting more than one network service. 


YellowFiber is ready and good to go to provide you with either SIP trunking for on-site PBX phone service OR a hosted voice solution. For most companies, the price and flexibility advantages from hosted voice are very hard to turn down. In some cases, PBX makes sense — especially if you have inherited a legacy system that’s already paid off.

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