Businesses need to communicate with clients, employees, and related vendors. Many businesses are looking towards Voice over Internet Protocol (VoIP) to communicate more effectively, but are unsure of the differences between Session Initiation Protocol (SIP) trunking and hosted private branch exchange (PBX). For most businesses, it isn’t so much one or the other (as hosted PBX also uses SIP) as it is whether or not the business wants a hosted solution or an on-premise solution.
Hosted vs. On-Premise
As the name implies, a hosted PBX is one that is hosted by an outside provider that takes care of the technical details. SIP licenses are provided by the vendor and the business doesn’t need to buy and maintain expensive equipment. When using SIP trunking, an on-premise PBX is required, as well as a gateway to connect to the Internet provider. SIP trunking doesn’t replace Hosted PBX; what it really replaces are older analog lines and other public switched telephone network (PSTN) technologies.
Pros and Cons of Hosted PBX
Hosted PBX provides a business with all the standard features—which can include an automated attendant, call records, conference calling, and voicemail—while the vendor maintains the equipment and software at another location. Other pros include:
- Add-on services such as mobility features
- Cost efficiency with bundling
- Power backup
- Scalability and flexibility
The cons of hosted PBX come primarily in the area of control. Because the vendor houses the equipment on their own premises (often in a different city, state, or even country), the business can experience a lack of quality if they don’t have a consistent connection. Businesses may also experience frustration when trying to determine what vendor best suits their needs, as vendors can vary greatly in what they offer as features and add-ons.
Pros and Cons of SIP Trunking
SIP trunking isn’t a PBX in and of itself; rather, it replaces more traditional telephone trunking. Its primary functions include:
- Checking the end-user system’s capability
- Checking user availability
- Choosing an end system for the call
- Establishing calls
- Finding the user
- Managing calls
The pros of using this solution include:
- Cost efficiency and savings
- Quick routing of calls to other sites
- No waiting for additional call circuits to be installed
- Uses the business’s existing IP network
SIP trunking isn’t for every business, however. Smaller businesses may struggle to maintain the bandwidth needed or to employ a dedicated IT team to maintain the on-premise PBX. Having the right IT professionals is especially important as this service is still relatively new and requires people who are up-to-date on the latest technology and troubleshooting methods. Equipment will also need to be purchased outright as well as upgraded in the future in order for the business to remain competitive.
Costs
Investment costs are usually higher with SIP trunking than with hosted PBX, but for larger businesses that need more control, the costs may even out in the long run. Hosted PBX has a recurring cost, usually monthly, that is affected by number of users as well as number and type of features.
When choosing a VoIP setup, businesses should be aware of what will best meet their needs and goals, even if this means a little more research in the beginning. Knowing the pros and cons of both solutions will help to ensure the right decision, whether a business is large or small.
