The 50 Shades of VoIP

Apr 2017

It is time to put the phone jargon about “cloud pbx” and “VoIP” aside and set the record straight for the common man.  Far too often we run into customers and business owners who feel overwhelmed and confused by the amount of telecom lingo and technology speak they encounter when they just want to refresh their outdated business phone system.   Let us help you simplify the situation.

Cloud PBX = Hosted PBX = Virtual PBX = UCaaS = Cloud VoIP = Hosted VoIP

All of these terms mean essentially the same thing.  The core switching, routing, and features of the business phone system are all running from a cloud based server, usually in highly secure carrier data centers, and usually accessible across many different kinds of networks and devices.  That makes these systems “cloud” “hosted” and “virtualized”.  All of the call traffic flows between the cloud server and the business employee end users via the internet, using internet protocol, which makes the calls VoIP.   In contrast, traditional Private Branch Exchanges, or PBXs, offered by vendors like Avaya, Nortel, and Cisco, kept all of the core features and call flows in a server on premise that was connected to phone lines, or bundles of call paths, as opposed to the internet.

Many industry analysts and commentators, including Gartner, refer to this market as Unified Communications as a Service, or UCaaS market, because these solutions typically include features and offerings beyond mere business telephony, and are paid for in an op ex as opposed to cap ex model.  Some industry commentators use the term Unified Communications or UC to refer to a more feature-rich offering than mere telephony, and therefore contrast UC with plain VoIP or basic PBX functionality.  To this we shall now turn…

Unified Communications and UCaaS

Unified Communications is a telecom buzzword describing the integration of real-time enterprise communication services such telephony, instant messaging (chat), presence information, mobile clients, audio, web & video conferencing.  UC can be either on premise or cloud based, with only the latter being categorized as UCaaS.  There is no clear industry standard for what qualifies as UC and what doesn’t.  Many vendors claim to offer UC when they really just offer a point solution for a particular application.  A video conferencing service, for example, might call themselves a UC vendor when really they just offer a single slice of the overall business communications pie.

The 50 Shades of VoIP

The 50 Shades of VoIP

That might be an exaggeration.  What you need to really get your head wrapped around are the two common types of VoIP: on premise and in the cloud.  The business telephony environment has lived through the evolution from traditional analog systems to digital and most recently IP-based communications.  If you are buying a new business phone system today, chances are that you are evaluating an on premise IP-PBX on the one hand and a hosted VoIP (or cloud PBX / aka UCaaS / etc.) on the other.  Both are VoIP, in the sense that the voice calls are broken into packets on an IP network and carried to the phone switch (or PBX) which has connectivity to the public switched telephone network (PSTN) on the one hand and the desktop phone on the other.

In an on premise VoIP deployment the business owns the IP-PBX hardware and it sits in a dark closet or server room at their office. In the hosted or cloud environment, the cloud PBX is owned by the service provider and the calls travers the internet between the customer site and the carrier data center.  An on premise VoIP system requires phone lines or trunks to be connected to the on site PBX.  A cloud VoIP system requires an internet connection with sufficient bandwidth to carry a voice call (usually 64k per simultaneous call).

Easy peasy, right?

About Altus

Altus is the premier choice for cloud-based communications solutions, providing businesses with flexible and secure technologies that help employees and customers stay connected more easily.  Whether looking for basic voice service, comprehensive unified communications, or contact center, business executives trust Altus to deliver the latest features and functionality without costly capital spending programs.  As an FCC-registered service provider, Altus offers enterprise-grade performance across its secure, geo-redundant carrier platform. Start communicating better with Altus.  For more information, visit or call toll free 866.922.4001.

« What’s All The Fuss Over SD-WAN? The Real Cost of Your Business Phone System »