Hosted PBX and SIP Trunking are two terms usually used interchangeably in a wrong manner that bring confusion to end users.

Traditional Private Branch Exchange also known as PBX relies on premise-based equipment to manage internal and external calls via the PSTN. This usually requires a physical connecting cable from the phone service provider to the customer’s premises.

Hosted PBX streamlines and simplifies standard PBX phone systems by managing calls via internet (offsite). Aside from the endpoints (Phone box, Laptop & Mobile phone) no physical hardware is required at the customer premises.

SIP (Session Initiation Protocol) Trunking makes it possible for a business’s existing, on-premise PBX hardware to operate as a cloud-based phone system — meaning SIP Trunk users will have access to advanced VoIP features.

Still need more information about the differences between SIP Trunking and Hosted PBX?

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This post breaks down key differences between Hosted PBX vs SIP Trunking so you can pick the right choice for your business.

• What is Hosted PBX?
• What is SIP Trunking?
• SIP Trunking over the internet vs dedicated link: Key Differences 
• Hosted PBX vs On-premise PBX: Pros & Cons
• Who Should Use Hosted PBX?
• Who Should Use On-premise?
• What is a SIP Channel?
• What is a SIP trunk?
• What’s the difference between SIP trunking/Hosted PBX and VoIP?
• What is VOIP calls?
• What is SIP forking?

• How much bandwidth does a company need for hosted PBX?

What is Hosted PBX?

Hosted / Cloud PBX (Private Branch Exchange) is an offsite business VoIP phone system managed by the third-party Internet Telephony Service Provider, (ITSP) not the end-user.

Businesses using hosted PBX don’t need any on-premise PBX equipment, nor will they need an in-house IT staff to manage and maintain their phone system.

Instead, the provider hosts, upgrades, and monitors the cloud-based PBX system, managing calls over the Internet/IP Network.

There is no need to worry about license upgrade or power supply. Service is always available.

Think of hosted PBX like a website hosting platform.

While you can build out your website, update it, and use all its features and functionalities when you want, you don’t have to worry about having an on-premise server.

The same thing goes for your virtual IP PBX solutions — you’re “outsourcing” the technical side of your business phone solution to the third-party provider.

Hosted PBX users have more minor responsibilities, usually related to internal changes like adding new features, scaling monthly plans, or increasing the maximum number of users.

All the service interference associated with wired connection are totally eliminated. Startup cost is pocket friendly.

Considering mobility and flexibility, Cloud/Hosted PBX is the answer. Teams can access their business phone system from any Internet-connected device, regardless of their current physical location.

The image below provides additional insight into how Hosted PBX technology works:

 

To get started with Hosted PBX, users need only:

• End point: Preferred communication devices (smartphones, desktop computers, tablets, laptops, VoIP desk phones)
• Internet: Reliable and dedicated Internet connection

• What is SIP Trunking?

SIP Trunking is a virtual connection (internet) that allow a Phone service provider gateway directly connected to an existing on-site or Cloud / Hosted PBX system, bringing previously unavailable advanced VoIP features to the business phone system.

With SIP Trunking, a business is responsible for buying its own on-site PBX and other relevant hardware.

The business owner of premise-based PBX — upgrades, maintains, and restores service to its. These advanced responsibilities necessitate an in-house IT staff and the purchase of additional hardware i.e network switch, firewall / Session boarder Controller (SBC).

Note that a PRI (Primary Rate Interface) phone system creates a physical connection to the PSTN, allowing multiple phone lines to connect to up to 30 simultaneous calls on the trunk. In contrast, this limitation is overcome by SIP trunking.

The image below provides additional insight into how SIP Trunking works:

SIP Trunk users can add numerous telephone lines and simultaneously access several communication channels without relying on separate structures for different types of communication.

Majority of companies that have on-premise PBX equipment migrate to cloud/hosted based PABX to subscribe for SIP trunking via the internet or dedicated fiber.

SIP Trunking over the internet vs dedicated link: Key Differences 

SIP trunking can be delivered either through a public internet or dedicated link. This dedicated link can be a fiber connection cable or a radio link.

Factors	internet	Dedicated link
Deployment	Easy and faster to deploy	Time is needed for the laying of cable and setup of radio link.
Deployment Cost	Cheaper mode of deployment since no physical connection is needed	Cost of cable and laying add to the setup cost
security	Prone to attack if not securely connected	Limited exposure to the public internet
Type of IP for connection	Public IP	Private IP
Bandwidth for connection	Reliable Internet bandwidth is required for the connection	Intranet only required
Quality of service	Mostly depends on the internet quality and available bandwidth	There is usually enough bandwidth
Scalability and Flexibility	Offers good scalability and flexibility	Applications may be limited by the premise-based PBX provider

• Hosted PBX vs On-premise PBX: Pros & Cons
• On-premise PBX system has a much greater initial investment than a Hosted PBX solution.
• Hosted PBX solutions have lower installation fees, don’t require expensive on-premise equipment/hardware, and businesses won’t have to worry about hiring an IT team to handle upkeep and maintenance. 
• Hosted PBX phones also offer a good degree of scalability and flexibility. Users can communicate on numerous devices as long as they have Internet connectivity across a wide variety of Operating Systems.
•  Hosted PBX users aren’t limited by the licensing regulations of on-premise equipment. 

• Who Should Use Hosted PBX?
• Hosted PBX is best for remote or blended SMBs that don’t have or can’t afford the costs of on-premise PBX system equipment and in-house IT maintenance.
• Businesses using Hosted PBX prefer that the third-party provider installs and manages nearly all aspects of their phone systems.
• Hosted PBX users also prioritize flexibility, mobility, and scalability. However, they are willing to compromise in areas like the number of concurrent voice calls and complete control over security.
• Though they may need to add more advanced VoIP features in the future, businesses using Hosted PBX will probably remain small-to-medium-sized. 

• Who Should Use On-premise?

• On-premise PBX is best for enterprise-level, in-house teams of 50 or more that either want to continue using their existing phone system equipment or that are established enough to need – and to afford – their own separate in-house PBX solution.
• On-premise PBX users may be small or medium-sized businesses now, but they often don’t plan to stay that way. As they grow, they need their phone system to let them add phone lines one at a time instead of in bulk.
• Teams using On-premise PBX prioritize high call quality and a secure, premise-based phone system that allows them to have much greater control than they would with a third-party provider. 

    What is a SIP Channel?

    A SIP channel is a medium that support one inbound or outbound call.

     What is a SIP trunk?

     A  SIP trunk contains a several channels, and each channel can support one inbound or outbound call. The number of channels you need depends on the number of agents you have working and your daily call volume.

     What’s the difference between SIP trunking/Hosted PBX and VoIP?

     Hosted PBX and SIP trunking providers allow users to make VoIP phone calls.

     What is VOIP calls?

     VOIP (Voice Over Internet Protocol) calls are type of phone call made over the Internet.

   What is SIP forking?

SIP forking means simultaneously sending inbound calls to multiple endpoints at the same time. For example, SIP forking means that your desk phone will ring at the same time as your home phone or smartphone. This eliminates the need to have a complex call forwarding path.

How much bandwidth does a company need for hosted PBX?

Though the exact amount of bandwidth will depend on the number of users and type of codecs, the general rule of thumb for hosted PBX is 60- 90 kilobits per second per caller.