Hosted PBX vs SIP Trunking: Key differences you should know about


Any VoIP services provider or member of their sales team will tell you that the most asked questions are not about product features but the difference between a hosted PBX and SIP trunking. For an industry insider, this may not seem like the correct question. However, you cannot blame customers, can you?

The common man’s choice of a telephone system is quite simple, actually. They look at affordability, decent voice, and video quality with some additional features for play. However, when it comes to enterprises, the game and play arena both change. Network and data security, robustness, scalability, and cost-effectiveness are a few factors that become integral for large-scale deployment.

VoIP (Voice over Internet Protocol) service providers today offer a host of business-grade modern telephony solutions, still hosted PBX (Private Branch Exchange and SIP (Session Initiation Protocol) trunking remain popular picks. And often, the most misunderstood. So let’s dive a little deep to understand the main differences between the two.

What is Hosted PBX?

A hosted PBX is a cloud-based telephone switching system that does not require hardware or software deployment. You will still need the SIP trunks for enabling the switching over an internet connection.

With the rising number of VoIP service providers, the hosted PBX system has become an easily accessible and cost-effective solution for businesses of any size. All the software, network, infrastructure, and manpower costs are borne by the service provider, in case you opt for hosted PBX.

What is SIP Trunking?  

To understand SIP Trunking, you need to have clarity on SIP first.

As the name suggests, a Session Initiation Protocol or SIP is a set of protocols for communication to connect and terminate calling sessions between two endpoints in real-time. Whereas, SIP Trunking is a method of sending voice and video data into packets over the internet.

A SIP trunk does away with the need for a physical connection to transform the traditional telephony into a virtual system based on the internet. The use of SIP enables the integration of voice, video, and internet service over a single connection.

Choosing between hosted PBX vs SIP Trunking

The myth surrounding hosted PBX and SIP trunking is that both offer the same functionality for an enterprise. In truth, they are very different. Let’s look at the main differences between the two options to help you decide which one makes better business sense.

1. Cost of installation

As the VoIP service providers bear the full cost of equipment, infrastructure, and maintenance, the costs for hosted PBX are low. Your service is completely deployed over the cloud, but you may need to set aside some funds for SIP trunks and routers. Often the service providers offer these as a package.

The cost for a SIP Trunking setup depends on the existing equipment that you have. If you own an on-premise PBX, then make sure it has a VoIP gateway to enable SIP trunking. If not, you may need to factor in the costs of gateway equipment and its configuration in the system.

Tip: Assess your current equipment properly. You may be able to repurpose or cut down on your current bills by tweaking your on-premise PBX system or upgrading. If you don’t own on-premise PBX then hosted PBX can be the right solution for you.

2. Cost of ownership

It is very clear that hosted PBX will mean recurring expenditure. Depending on the package and service provider, you will end up paying some usage fees. The good part is that resolution of any network issues and maintenance are not your headache. You can focus on your business.

In SIP Trunking, the cost is a factor of the SIP channels in use. The charges can be at a flat rate per channel or vary with the service provider.  With SIP trunking, you have the complete setup on your premise. So, it becomes your responsibility to manage and maintain it on a daily basis.

Tip: Your monthly charges may depend upon the setup chosen. Factors such as the per SIP channel payment or calls outside the VoIP network and the number of VoIP users in your enterprise will matter. You may also want to weigh the benefits from add-on features enabled by VoIP.

3. Remote Use

 With the majority telecommuting or working remotely, this is an aspect you need to consider carefully. A hosted PBX will allow your employees to access the communication services, wherever they are.

SIP Trunking requires the service provider to map work numbers on a home phone. By doing this, you can enable your workers to make and receive calls from their homes.

Tip: Your employees can access the softphone and other applications with hosted PBX easily. But such services are limited with SIP, depending upon the SIP service provider and licensing of services.

It is not surprising that the takers for Hosted PBX and SIP are increasing by the day. Generally, smaller organizations prefer hosted PBX, to begin with, and large enterprises opt for SIP Trunking. However, make an informed choice, explore your options, and factor in the fixed and recurring costs before you settle down on one.

Source: TelecomReseller

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