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HomeBusinessCan A Cloud PBX Cut Costs? Yes, $240 Per User Each Year

Can A Cloud PBX Cut Costs? Yes, $240 Per User Each Year


You can think of a cloud PBX (Private Branch Exchange) as a modern twist on traditional business phone systems. 

Since it operates primarily through software, a cloud PBX allows users to simply log in to a service, while administrators manage settings through a web application. This means you can finally say goodbye to physical wiring hassles. 

Aside from the convenience and ease of configuration, there’s another big benefit: cutting costs. How much? We’ll walk you through an example in the sections below. 

Calculating Cloud PBX Savings

When it comes to your telecommunications spending, every dollar counts. So let’s run the numbers. 

  • A cloud PBX system, on average, will cost you about $30 per month per user. This pricing is a conservative estimate, reflecting the cost of a hosted phone system with a standard feature set. 
  • In contrast, traditional phone lines can cost around $50 per month per user. This figure often excludes additional maintenance and upgrade expenses.

The difference amounts to a substantial $20 per month, or $240 per year, in savings per user with a cloud PBX system. If you have a lot of users, or a large IT team, those numbers can quickly add up. Honestly, even for a medium-sized team, the difference can be pretty significant. 

Let’s say you have a medium-sized business with 50 employees. With a traditional on-premise PBX system, where each user incurs an additional cost of $20 per month, that seemingly small figure accumulates to $1,000 per month for the entire team (50 users x $20). Over a year, this amounts to $12,000 ($1,000 x 12 months).

Obviously these numbers aren’t one-size-fits-all, but they give you a solid starting point for considering the switch. 

Also note that if your organization already has an adept in-house IT team, the cost of a cloud PBX could drop even further. We’re talking as low as $5 per month per user when managing your own cloud system.

But even for the average business moving from legacy PSTN (Public Switched Telephone Network) phones to the cloud, a $240 annual saving per user is a realistic and achievable target. 

The cost efficiency, coupled with the advanced capabilities of cloud PBX systems, makes them a unique way for businesses to modernize their technology and cut costs simultaneously. 

What Does a Cloud PBX Include?

With a cloud PBX, you’re getting an all-software solution for business telephony, and a shift away from the traditional hardware-reliant setups that PSTN is notorious for. 

More specifically, this means your users can now easily log in to a service, and administrators manage the system via a web application, which hugely simplifies the overall management process. 

The setup eliminates the need for complex physical wiring, which also makes it more flexible and scalable.

Beyond that, there are other specific functionalities you’ll get with the switch to a cloud PBX, too. Some are table stakes, while others might incur you a higher subscription cost. 

Here are the basic and more advanced capabilities you need to know. 

Basic Capabilities:

  • Inbound and outbound calling: Facilitates seamless call management, meaning you’ll get reliable service whether calls or coming in or going out
  • Voicemail: Often offers advanced voicemail features, including things like voicemail-to-email functionality, which can be super helpful for busy call centers
  • Call routing and transfer: Allows efficient distribution and redirection of calls, ensuring callers are quickly connected to the right department or individual.

Advanced Features in Premium Subscriptions:

  • Multi-level auto attendant: Automates call handling with a virtual receptionist, guiding callers through various options and directing them to the appropriate extension.
  • Conference calling: Enables multi-party calls, making it easy to facilitate collaboration and meetings over the phone.
  • Call recording and analytics: Provides insights into call patterns and agent performance, which is helpful for quality assurance and training purposes.

A final note: one of the significant advantages of a cloud PBX is the flexibility and scalability in upgrading. Unlike traditional systems, enhancing your cloud PBX’s capabilities doesn’t require new hardware purchases or lengthy installation; it’s simply a matter of adjusting your service plan. 

This ease of upgrade ensures that your telephony system can grow and adapt alongside your business. In other words, you can start with a more affordable plan and scale up as needed.

Cloud PBX vs Managing Your Own System

We mentioned earlier that if you already have a skilled IT team in place, managing your own cloud phone system can be even cheaper than paying for a PBX service. 

However, cost is just one factor to consider here. If you’re deciding whether to manage your own cloud phone system or utilize a cloud PBX service, you need to weigh several factors. These include the level of technical expertise available, resource allocation, and the specific telecommunication needs of your business.

Here’s a high level overview of what to keep in mind as you weigh the two options. 

Managing Your Own Cloud Phone System

Opting to manage your own system involves a detailed technical setup process. This includes the establishment of an IP PBX and SIP trunking. The approach here will demand a significant level of IT expertise. If you don’t already have that in place, it’s probably best to opt for a paid service. 

Also, when managing your own cloud system the responsibility for security and regular networking maintenance falls entirely on your team. That means you’ll need to implement continuous updates and vigilant monitoring to protect the system against potential cyber threats. 

Overall, this option is best suited for businesses that already have a robust IT department or specific telecommunication needs that might not be fully addressed by standard cloud PBX services.

Using a Cloud PBX Service

Yes, costs are a little higher here, but subscribing to a cloud PBX service also removes the burden of managing backend complexities. This includes the handling of security measures, regular updates, and overall system maintenance, which are all taken care of by your service provider. 

This is a more straightforward and hassle-free solution, which is particularly appealing if your business lacks extensive IT resources or prefers to concentrate on core operations (rather than on managing telephony infrastructure). 

Small to medium-sized businesses or those aiming to simplify their communication processes without incurring additional overhead costs will almost always find cloud PBX services to be the better option.

Bottom line? Each approach has its merits. In-house management offers greater control and customization, while cloud PBX services give you more ease and convenience. Ultimately, the choice comes down to your business’s specific needs, resources, and capabilities.

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