Types Of Business Phone Systems Explained

The Major Types of Business Phone SystemsPBX phone system salesman.


We identify three distinctive variations of business phone systems for you to consider when installing business telephones. They are Key and Digital PBX Systems, IP-PBX Systems and cloud based PBX solutions. Comparing business phone systems starts with understanding these three principal types, KSU, PBX and VoIP.

Comparing business phone systems starts with understanding the three principal types; KSU, PBX and VoIP.

  1. KSUs (Key Service Unit) are uncomplicated, multi-line on-premise digital business telephone systems used by smaller organizations. They have been in use for decades and employ proprietary technology and match with specific proprietary digital desk phones.
  2. on-premise PBXs (Private Branch eXange) are phone systems with the PBX server residing on-premise incorporating digital or IP (Internet Protocol) phones. They regularly use proprietary phones which allow users to talk to each other inside a private telephone network.
  3. Cloud-based PBXs deliver communications over the Internet using VoIP (Voice over Internet Protocol). A cloud PBX provider "hosts" the server and software at their facilities rather than on the user's premise. They regularly accept several distinct manufacturers of IP phones.

About Key Systems and Digital PBXs

These digital systems are business on-premise phone systems that provide inbound extensions and allow users to access more than one telephone line from several telephones. A particular line can be placed on hold to answer or initiate calls on other lines.

On-prem PBX with digital phones.

They regularly incorporate an attendant, voicemail and call routing features. Calls can go through the automated attendant or ring through directly to an employee's extension by using DIDs (Direct Inward Dialing). Phone service is routinely delivered by a local phone company, either as ordinary business CO (Central Office) lines or a PRI (Private Rate Interface).

When a customer calls the business number, it routes to the phone KSU or PBX, which then handles the call. If the CO line is active, the phone company rolls the call to the subsequent line sequentially. Many small businesses have three, four or eight lines. Larger companies more often use a PRI circuit which delivers 23 concurrent transmissions of voice, data or video traffic between the telephone provider and the business.

It's easy to become overwhelmed with all the information obtainable. A preferable option is to respond to a few straightforward questions and let a professional quote a solution.

An automated attendant transfers incoming calls to particular phones or departments; a must-have feature for any business. On some digital telephone systems, each incoming phone line appears on its own separate button. A key phone system telephone connects manually to each phone line. Line appearances allow employees to recognize who is on a call and who is not. Many employees have grown accustom to this feature, especially in very small business environments, and can be reluctant to give it up.


Companies regularly choose digital phone systems which accept regular phone wiring rather than having to pull new Ethernet cables.

Diagram of a digital KSU phone system.

Cabling frequently figures in the decision process when choosing a phone system, as digital phones can connect to existing traditional phone wiring. IP phones require an Ethernet cable.

Some digital phone systems provide IP technology. The Avaya IP Office can be digital, IP or a combination of both. Hybrid installations represent a cost-effective solution.

Most digital on-premise phone systems connect to CO lines (traditional business lines) or a PRI from the local telephone company. This enables business owners to remain with their current telephone service if already established.

About IP-PBX Business Phone Systems

An IP-PBX business phone system is a PBX that uses IP to deliver voice or video over a data network. They can interoperate with the Public Switched Telephone Network (PSTN) or through VoIP (Voice over Internet Protocol) or a combination of the two. An IP-PBX remains a substantially more advanced system than earlier PBXs incorporating more recent technology with noteworthy advanced feature-sets.

Advantages and Disadvantages of On-premise Phone Systems


IP-PBXs Can offer the Most Recent Technology.

New IP-PBXs incorporate the most recent innovative technology including multi-channel communications. For instance, Mitel, Cisco and Avaya deliver feature-rich enterprise solutions worldwide. Likewise, there are several leading on-premise PBX manufacturers providing outstanding systems for small businesses, like NEC, Allworx and Sangoma, to name a few.

On premise systems are often more effective for the following types of businesses:

*NOTE: Some Asterisk-based VoIP appliances remain very reasonable in cost. They will operate with a variety of IP phones and frequently incorporate features without any add-on licensing fees. These systems can be self-managed by data savvy personnel, however, are more difficult than hosted VoIP platforms. Several manufacturers include support for customers who have purchased their appliance.

Advantages and Disadvantages of Hosted VoIP or a cloud based PBX

An IP phone and a computer can share the same Ethernet cable.

A Cloud based PBX service or hosted VoIP represent a leading choice for a business communications platform. A few notable providers are VirtualPBX,R ingCentral, Nextiva, and Ooma for almost any sized company. For micro-companies, start-ups and entrepreneurs, these virtual phone systems are each a leading choice; MightyCall, Openphone, and Grasshopper. Each presents a selection of plans that incorporate a set package of features to accommodate various business needs. Cloud-based providers deliver multi-channel communications that integrate video, chat and voice. Smart phones connect right up, so employees can remain totally connected from anywhere.
Hosted VoIP using smart phone as an extension.And there are a limited number of specialized virtual phone services tailored to provide entrepreneurs effective business communications to add to their existing smart phone service. These services, like Grasshopper and MightyCall are uniquely designed platforms for decidedly small or solo companies.

Hosted VoIP excels for these businesses:

Small retail businesses frequently find a modest on-premise phone system provides the appropriate mix of affordability and features.
Some professional offices depending on their business model, have discovered cloud-based providers offer flexible multi-channel communications with features that boost efficiencies. Business owners currently recognize the need to provide for work from home employees, which cloud-based providers and VoIP capable PBX phone systems make possible. Hosted solutions especially exceed in making it simple to connect from anywhere without complexity.
There are many components to consider when creating efficient dispersed work environments. Hosted PBX providers have crafted efficient integrated communication platforms with security, reliability and affordability. Cloud-based PBX services provide companies distinct communication advantages in that they are straightforward to setup and manage. Many platforms incorporate smart phone apps that employees can use while traveling.

Large organizations frequently employ an IT capable staff to manage substantial IP-PBXs like Cisco, Mitel and Avaya in an extensive network. Small businesses do not possess these resources, but can gain the same advantages of large-scale enterprise communications using cloud-based VoIP providers.

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