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February 22, 2022

PBX Software Pitfalls

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a PBX system can perform many useful functions that a traditional phone line cannot

Most companies understand the necessity of a PBX phone system within their business walls. Both the onsite and virtual PBX system setups give companies access to multiple beneficial features such as the ability to use several phone lines at once, numerous voicemail inboxes, and low to no-cost long distance. 

Essentially, a PBX system can perform many useful functions that a traditional phone line cannot. However, since on-site and virtual PBX phone software systems are set up quite differently, resulting in factors such as cost, training, and scalability could vary widely. One option may not be as beneficial for a company as the other could be. 

Those variables can affect the overall impact the PBX has on a business. In order to understand what those differences are and how they affect a company’s workflows, it’s important to know what a PBX setup is and what components make it up.

What is PBX?

A PBX, also known as a Private Branch Exchange, is a network of phones within a company that allows employees to make and receive calls. A PBX setup can either be hosted virtually on a cloud or through an on-site server. Most companies who have the on-site setup enable VoIP capabilities. VoIP transforms analog voice data into digital voice data.

 It allows users to make and receive calls over the Internet. It provides access to voicemail, call forwarding, call parking, call transferring, queuing, and more of the essential phone features companies need. 

A PBX hosted on a cloud can be referred to as a hosted PBX or a virtual PBX. There is no need for on-premise equipment besides phones (unless companies choose to use a softphone) and headsets. The entire PBX setup is virtual. A PBX that has all equipment and hardware at the company location is referred to as on-site or on-premise IP PBX. As technology has evolved, it’s given companies far more options for their phone setups than ever before. 

PBX computer software is essentially the program that allows companies to manage their PBX system and its settings.

What is PBX computer software?

PBX computer software is essentially the program that allows companies to manage their PBX system and its settings. Companies can set up voice menus, call routing, call forwarding, and more. 

The software is also what allows users to make and receive phone calls over the Internet with VoIP. When a call comes through, the analog voice is routed to the VoIP (Voice over Internet Protocol) provider which then turns it into digital voice data. Outbound calls function the same way; analog data is transformed into digital which allows calls to travel over the Internet. 

Some PBX computer software programs are open-source. This means that companies can configure it to work perfectly with existing applications. It’s also free to the public, which makes it the option lowest in price. 

Open PBX software allows customers to customize their setups to integrate with other applications such as their CRM or email software. Open PBX software can also be used with any vendor.

Virtual IP PBX software Vs. PBX server

Virtual IP PBX is used interchangeably with other terms such as cloud IP PBX or hosted IP PBX. Virtual IP PBX software refers to the setup of a telephone network that is hosted on a cloud and uses an IP network to make calls over the Internet. 

Virtual IP PBX software provides companies the ability to make local and long-distance calls and provides necessary business features such as call routing, transferring, voice menus, and queuing abilities. 

A PBX server is one piece of equipment in the on-site system setup. The IP PBX phone setup essentially gives companies the ability to use both traditional phone lines and an IP network to make and receive calls. 

Unfortunately, choosing onsite PBX software can lead to some bumps down the road because there’s a lot more to manage.

3 drawbacks of onsite PBX software

Depending on the phone setup you decide to go with for your company, you may wind up using software designed for an on-site or virtual system. Companies who choose on-premise PBX may also be restricted to using software specific only to their PBX provider brand. Unfortunately, choosing onsite PBX software can lead to some bumps down the road:

  • Incompatible equipment: If you choose to install an on-premise PBX phone system, the equipment and hardware is usually branded to that company. This means that if you ever decide to switch, that same equipment would be rendered useless. 
  • Specialized IT Staff: On-premise PBX configurations will usually require IT staff knowledgeable in that specific provider’s brand. Since an employee like that may not always be available, companies may have to reach out to outside help from technicians that specialize in that hardware. This can quickly become expensive. 
  • High upfront costs: The equipment and hardware plus installation that an on-site PBX phone system requires can be very expensive, costing anywhere upwards of $800 per employee. For a company with 50 users, installation could cost anywhere from $45,000 to $50,000. If the same 50 user company opts to lease their hardware instead, they can expect a monthly bill of roughly $1500 which covers equipment payments, phone lines, and maintenance. 

A PBX phone system brings numerous benefits for a company and its customers. It is essential for companies to have a clear understanding of upcoming goals to ensure that the PBX system they choose can help them reach those goals. 

A hosted or virtual IP PBX system is one of the most common setups that companies choose because it’s less expensive to install than on-site, requires no equipment or hardware purchases unless new phones are necessary, provides ongoing IT support, and is much easier to scale for growing businesses.

Is a virtual / cloud-hosted PBX the same thing as a VoIP system?

A virtual/cloud-hosted PBX is a PBX phone system that is set up virtually, or on a cloud. VoIP is a way to transform analog voice data into digital voice data. A cloud-hosted PBX essentially uses VoIP technology to make and receive calls.

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LiveVox (Nasdaq: LVOX) is a next generation contact center platform that powers more than 14 billion omnichannel interactions a year. By seamlessly unifying blended omnichannel communications, CRM, AI, and WEM capabilities, the Company’s technology delivers exceptional agent and customer experiences, while helping to mitigate compliance risk. With 20 years of cloud experience and expertise, LiveVox’s CCaaS 2.0 platform is at the forefront of cloud contact center innovation. The Company has more than 650 global employees and is headquartered in San Francisco, with offices in Atlanta; Columbus; Denver; New York City; St. Louis; Medellin, Colombia; and Bangalore, India. To stay up to date with everything LiveVox, follow us at @LiveVox or visit

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