PBX vs VOIP and Other Business Phone Options

Toshiba VoIP

Phone system selection can be a daunting task for a business owner. Voice communication is an integral piece of an organization’s success. As a business owner, it’s important to understand what choices are out there, educate yourself on what each choice means to your business, and ultimately select the best option.

If you have not yet started this process, you should first do some digging to learn more about how to approach buying a phone system.

In this article we will be discussing the pros and cons of two major types of phone systems, PBX vs VoIP.

What Do the Terms PBX and VOIP mean?

If our industry’s tech speak and acronyms didn’t confuse you enough, we also like to use different terms to mean the same thing. PBX (Private Branch Exchange) is also referred to as TDM (time duplex multiplexer) or Key Systems. These terms are often used interchangeably in our industry. Basically, a PBX is an on premise phone system which is not connected to a data network.

VoIP (Voice over Internet Protocol) is another form of phone system technology. VoIP means the voice is converted to data, packetized, and transferred over data network. VoIP can be on premise or it can also be hosted. VoIP is a more recent development than PBX in the telephony industry. However like most things, newer isn’t always better. We will go through the pros and cons, but I strongly encourage you to engage a reputable telephony partner to have a further discussion. You can always contact Taylored to schedule a discussion with one of our experts about which is the best fit for your organization.

Pros of VoIP Phone Systems

Flexibility is a single word that encompasses most all pros when comparing VoIP vs PBX systems. Here are a few ways a VoIP system can be more flexible than its PBX counterpart:


Typically VoIP phone systems are license based. This means features, users, voicemail boxes, etc. are all controlled by a license. Once the license is added the feature or extension is created. In the PBX world the systems worked on cards. In order to add another device or extension we need to make sure we had enough ports, on a card. Obviously a license based solution is much easier to expand for growth reasons. If the solution is delivered as a service, most of the time you can also scale back. This is a great solution for a seasonal business.


VoIP systems are more feature rich, plain and simple when comparing VoIp vs PBX. VoIP allows for a phone system to integrate with other technologies on the same data network which brings telephony to a new level.


The adoption of broadband technology has made our world “always on.” This idea has not skipped the telephony world. We as a society expect our technology to work and expect it to be ready, when we need it. While IP technology is more subject to downtime than traditional PBX technology, we have the ability to incorporate redundancy both inside a phone system and also with the components that allow us to communicate using the phone.


In the days of only PBX phone systems, you had to purchase a physical phone system. Now with VoIP technology we can deliver a full phone system as a virtual instance or even host the phone system in a data center.

Bring Your Own Device

VoIP phone systems are built on SIP platforms. SIP is another technology that allows VoIP to operate. With VoIP phone systems using SIP as their technology platform we open up a wider variety of phone options. We are not stuck with a phone manufactured by the phone system manufacturer, but instead can use virtually any SIP device. With VoIP we can also position the mobile phone as a business telephone endpoint, or even the computer/tablet.


Yes, I did just say the computer/tablet as your phone. As we discussed earlier VoIP allows us to integrate with other technologies on the data network. The integration with the computer allows us to control the phone functions via a software based phone and our mouse (drag and drop transfer calls, click to dial, instant messaging, etc.). This creates a true unified communication platform. Do you really need a desk phone?

Cons of VoIP Phone Systems

Some people may say “Cons of VoIP? There aren’t any cons of VoIP vs PBX.” But they probably sell VoIP. I beg to differ. Sometimes VoIP is not a fit. Make sure you are talking with a partner that understands not everyone is a round peg, and have the PBX or VoIP discussion with them.


VoIP solutions require Cat5 cabling or higher for each device to operate. Do you have a Cat5 cable everywhere you need a phone? If not, what will it cost to bring one to each location? Aside from cabling, keep in mind the VoIP phone traffic will ride on your existing data network. Is your network stable? Can you safely add more traffic? VoIP phones will need to be plugged into a data switch so you will need to have additional ports available, preferably PoE. Who controls the network? Is the control with the same company or department as the phone system? There are many questions dealing with infrastructure that need to be asked and answered before choosing VoIP.

IT involvement

A VoIP solution will involve your IT staff or partner. How busy are they? Making sure your IT team has time for this added work is a priority.

Points of Failure

As we discussed, VoIP phone systems will impact your data network. They will use switches for the phones, servers to house the phone system and sometimes multiple servers for different applications, Cat5 cabling, and dial tone coming into the system. There are more points of failure on a VoIP vs a PBX solution.

Vendor Selection

The world of VoIP has opened up the ability for more businesses to install and service telephony. This is not always a great thing. While, yes, it does allow for more options, it also allows for companies dabbling in telephony to market as an industry expert. We see many times where an IT provider believes they can enter the telephony market because IP is IP, right? That is not the case. Many times Taylored Systems, as a 33 year old telephony veteran, is coming in to clean up the mess created by others. Would you ask your interior decorator to install your plumbing? They both work inside a house, why not?

Pros of PBX Phone Systems

Remember those people before that told you there are no cons for VoIP? Those are probably the same people telling you there are no pros for PBX. Again, I beg to differ.

I talked with Chad A. Richardson, from Activate Healthcare. Chad is in charge of Construction Services, Facilities Maintenance & Real Estate Strategy for Activate. This means he is in charge of implementing telephony solutions for all of their primary care health facility buildouts. Chad uses VoIP in his corporate offices, but uses PBX systems in each of the facilities. Here are some reasons Chad has made this decision between PBX or VoIP:


Unlike the VoIP solutions, PBX phones can use Cat3 or above wiring. Also it does not touch the data network.


PBX vs VoIP phone systems offer enough functionality to be productive to the business but not so many they overwhelm the users. When talking about this point with Chad, he stressed the most streamlined and easy to use solutions they can implement are the best. “In a healthcare organization, you want your employees focused on their patient, not the technology they use to communicate.


“The nature of healthcare, we cannot afford downtime,” said Chad. “When we pick up the phone, it could very well be a life or death scenario. We err on the side of tried and true.” Chad’s experience with hosted VoIP, in the corporate office, has lead him to this mindset. He cannot afford to have quality issues or internet disruptions.


As much as you will read about VoIP or hosted VoIP being the most cost effective voice solutions, a simple traditional PBX will win every time. Especially PBX vs Hosted when you add in the soft costs of poor call quality or disruption to your service. The simple traditional PBX may not be the fanciest phone system out there, but it will get the job done. Remember not everyone is a round peg and needs all the bells and whistles.

Cons of PBX Phone Systems

Like with everything, if there are pros there are cons. A lot of the cons for a PBX we have covered in the pros section of the VoIP solution.

Expansion and scalability

Here is how the expansion of a PBX system works. In order to add a phone or line, you will need a port on a card. In order to add a card, you will need a slot in the cabinet. If you do not have slots in the cabinet, you will need a new cabinet. A lot of ins, a lot of outs, a lot of what-have-yous. This is obviously different than the easily scalability of the license based VoIP system.

We discussed redundancy with a VoIP system and a PBX is a little different. You can still have carrier redundancy for the dial tone, however the internal redundancy is more of a daunting task. With a VoIP system typically each component comes in pairs (Hard drives with RAID, dual fans, dual ports, etc.). However adding redundant cards to a PBX is a little ridiculous and have a second phone system just sitting and waiting is not feasible. Talk to your partner. There are options of positioning hosted products to work in an emergency mode.


The management of a PBX system can be more cumbersome than a VoIP solution. In order to add the cards or cabinets your partner will need to come onsite to physically install those components. It is not just as simple as adding licenses and moving on.

So Overall, PBX or VoIP?

Some solutions are what are called hybrid PBX phone systems. These systems allow you to utilize the features of a VoIP solution, but position the infrastructure for a PBX. These are great solutions if you cannot decide. Maybe some of the more important needs of your organization align with the PBX, but you like the idea of the VoIP technology. Hybrid PBX would be a great solution.

We recommend having the conversation about these technologies with your trusted telephony advisor. A good partner will provide you with options and help you weigh them. If you do not have a partner and would like to position our expertise, please contact Taylored Systems or call us at 317-776-4000. Rely on our 33 years of knowledge, success, and mishaps to help you make the PBX vs VoIP decision.