What are the Different Types of Business Phone
updated 5/2/2020 We have noted some of the points that you may want to consider when getting
your next or first business phone system. In each category there are many
manufacturers, each offering their own system. To better understand the
differences, we have made general bullet points that will guide you in the
characteristics of each type of phone system. Additionally, hosted VoIP companies,
which offer a cloud based PBX phone system, have distinct pricing models. They
may vary on some items, but are known to have very robust feature sets.
Comparing business phone systems usually starts with
understanding the three principal types, KSU, PBX and VoIP. KSU (Key
Service Unit) are earlier technology key systems that typically
use proprietary digital desk phones. PBX (Private Branch eXange)
are phone systems that can be digital or IP or a mix, known as a
hybrid PBX. VoIP (Voice over Internet Protocol) is
communications delivered over the Internet which comprises hosted
business VoIP providers or a cloud PBX. With a cloud PBX rather than
having the phone server inside your company it resides with the
hosting provider. Companies pay a monthly fee for service.
Older styled Key Systems and Digital PBXs
- Lower cost (although this might not always be the case). Many good
refurbished systems are available.
- Easy to tell what line is being used (who's on the phone).
- Can connect phones to existing phone outlets through existing regular phone
wiring. Using existing telephone wiring to locations where no Ethernet cable
or PC exists keeps down additional infrastructure costs.
- Older legacy technology, costly to add additional features and integrate with other business applications
(with most systems).
- Proprietary; requiring specific
phones and equipment that may be costly.
- Requires cross connects for phone moves. (Phone technician service on
- Typically not VoIP enabled, although some may include SIP trunk
- Even though some digital systems allow for the addition of IP phones,
extra equipment and licensing can increase costs quickly.
- Most recent technology using IP. Some IP-PBXs support both digital and
IP. Some are excellent systems that are very effective in hybrid
- Complete control and management, customization with proper IT staff.
- Advanced feature sets with good capabilities to integrate other advanced
- One network, all data. Or can be divided into an all IP voice and data
network. Hybrid solutions (digital and IP), require a gateway device.
- Easy phone moves.* (No cross connects, just like with a PC, move the phone
from one data connection to another, connect it and everything is the same.)
- Save maintenance costs (adds, *moves, changes).
- VoIP capable (i.e. SIP trunks) for lower cost phone calls.
- More costly than some other types of digital PBX systems.* And hosted
VoIP service when measured over the first few years.
- Some systems are proprietary which require particular hardware and
charge licensing fees.*
- Upgrades and maintenance requires knowledgeable
admin people or vendor technicians and can be costly.
- Cabling infrastructure may require extra data
connections in some cases.
- Some IP-PBX systems require proprietary phones adding additional costs for
*NOTE: Prices for a some Asterisk based systems are very reasonable and
can be matched with most SIP based phones for additional potential savings.
These systems based on Asterisk can be self managed by a data savvy person,
but are generally more difficult than self managing a hosted VoIP system. Additionally, these IP PBX
systems are typically lower in initial cost and are offered without
additional licensing fees. Several manufacturers offer support for customers who purchased
- Latest technology, providers keep advancing their systems to remain
- Advanced features and integration with other apps.
- Lower initial outlay costs. No need to budget for new technology changes
as provider includes new features as part of their service after tested and
- Fast, simple installation that can be done quite quickly. Self-management with provider support included.
- Lower phone call costs.
- Maintenance, upgrades and administration is usually part of the service.
- Need to maintain a stable Internet service with sufficient bandwidth for both
WAN and LAN.
- Faxing, credit card machines & alarms may require a traditional analog
line from a traditional phone company, although many of these VoIP services
(i.e. incoming faxing) now are remarkably stable and reliable.
- Some additional advanced features cost extra and can quickly add costs
depending on the provider. Some hosted VoIP providers now offer many
advanced features as part of their plan's package. Some providers require a
yearly commitment for their best pricing.
- Larger systems (companies with more than 50 employees/phones) may require
additional more sophisticated in-house network equipment and administration.