There are a variety of telephone solutions available to today’s business owners. A Cloud PBX system is just one of those options, and while one of the better options, it does have its disadvantages.

What is a Cloud PBX System?

A private branch exchange (PBX) is a telephone exchange system that (usually) serves one business. These were first introduced as a method for companies to manage their phone systems with the help of in-house operators. These days PBX systems connect fax machines, computer modems, and every type of technology that transmits data through phone lines.


A cloud PBX system is based on cloud computing technology. Cloud computing data is stored and transferred over the Internet instead of on hardware that an end-user owns. Similarly a cloud PBX system is administered off site but allows the end-user, the business owner in most cases, to take advantage of the many features offered by a more traditional PBX system.


Cost efficient

Traditional PBX systems are expensive. They require installation of the hardware and the placement of physical wires throughout a building. Companies have to estimate future usage, and make sure that enough lines have been put in place to allow for future growth. That means businesses have to pay to install and maintain lines that may not be used for some time, if ever.


With cloud PBX phone systems the only up-front cost is for the actual phones that will be used. Set up costs are far less (you don’t actually buy the PBX hardware, nor do you install it) and you only pay for the lines you need at the time.



Cloud technology means that you can access the data and services of your cloud from any device connected to the Internet. So, with a cloud PBX provider, you can use all of the standard PBX features without the need of an actual PBX in your home or office

Both cloud and conventional telephone systems have internal and external telephone functions available. However, with a cloud system there is no physical system installed at the user’s site. The entire system is made available on the network via the cloud.



Cloud PBX systems are flexible enough to handle seasonal changes. A business that has increased telephone usages at specific times of year is able to temporarily increase and upgrade their system, then scale the system back as their needs change.


In addition, adding lines to cloud PBX systems can be as quick and easy as logging into a web portal anywhere in the world to anywhere in the world. If you open an office in one location, the new phones can be hosted and added thus become part of an existing system. All of this can be done in matter of hours as opposed to days or even weeks.



Security of data has become a growing concern over the past few years and rightfully so. That being said it needs to be acknowledged that your information security is being entrusted to the service provider. That means you must entrust the various phone numbers and contact information for both your business and customers to your provider.


This is no different than transmitting any other sensitive data over the internet; all the same risks and protective behaviors still apply.



Cloud-based PBX systems are dependent on access to the internet. Hosted PBX is no different. Therefore, the quality of your internet connection is even more critical if you add voice traffic over that connection. If your network has any limitations those limitations will only be compounded when adding a cloud PBX system.


Quality hardware can be purchased, but in the end the reliability of your connection will determine the quality of the voice service. Because of the increased demands T1, fiber and Ethernet are recommended.


This does not change the inherent problem of losing your phone when your internet goes down.

More Users Can Mean Higher Monthly Recurring Charges

As the number of users increase hosted PBX may become less cost effective. Most PBX systems have packaged deals for a set number of lines. As you approach those limits you will need to change to different and more expensive packages. Eventually, as your business expands, you will reach a number where it is more expensive to use cloud services than it would be to actually purchase the equipment and maintain a PBX system yourself.


A cloud PBX system offers a variety of advantages and disadvantage to businesses. The advantages compound if it is time to upgrade existing equipment. The minimal costs for installation, ongoing maintenance and deployment in addition to the ease of growth make it a great solution. The size of your business will determine if cloud-based PBX systems are for you.