IP PBX vs. VoIP: Similarities and Differences

Discover how IP PBX and VoIP compare to each other. Explore the pros and cons, how they can help you save on costs, and choose the one that works for your business.



Main differences between
Cloud Telephony & VoIP





It typically requires an IP phone for each user, a router or switch to handle network traffic, and a dedicated server or appliance capable of running the IP PBX software.

When using cloud telephony software, you only need a device with an internet connection and a pair of headphones.


Allows organizations to easily add or remove extensions, lines, and features for seamless scaling.

If you use landline phones, you have to install additional hardware. Otherwise, you can use as many numbers as you need and add users anytime.


IP PBX maintenance involves regular monitoring, software updates, and occasional hardware upgrades.

When used without hardware, there’s no maintenance involved. In case you are using on-site hardware, you’ll have to take care of the maintenance.

Remote work

Your employees can access their office phone system remotely and collaborate seamlessly from anywhere.

Thanks to a hardware-free option, your employees can work from wherever you need, from any device.

Data storage

IP PBX systems typically require data storage for call logs, voicemails, and configuration settings. These are either on-premises servers or cloud-based solutions.

If you store your data in internal data centers, it may get lost. However, most cloud telephony software have strong security measurements in place.


Costs include initial expenses for IP-compatible phones, hardware, and setup but bring long-term savings on reduced phone line costs and enhanced communication efficiency.

Using VoIP cloud telephony software, you pay a monthly fee. The price depends on which package you choose. In case you are using landlines, you may pay for maintenance and installation.

Best fit

Scaling businesses, small to large enterprises with remote or mobile workforces, dynamic communication needs, and a focus on integrating voice, video, and messaging capabilities.

Scaling Startups, SMBs, Enterprises, fully remote businesses, companies with fluctuating call volumes, and those in need of advanced features

Worst fit

Businesses in highly regulated industries, companies with limited internet connectivity, or those that heavily rely on legacy communication systems.

Companies require a high level of security, large-scale call centers, privacy-sensitive services, and businesses with limited budgets for development and maintenance.

What is IP PBX & How Does It Work?

An IP PBX, or Internet Protocol Private Branch Exchange, is a telephony system that leverages Internet protocol technology to manage voice and multimedia communications within an organization.

Unlike traditional PBX systems, which rely on analog or digital connections, IP PBX uses the same data network that a company uses for its computer systems. 

It functions by converting voice signals into data packets, enabling the integration of voice, video, and other communication services over the company’s IP network.

What is VoIP
& how does it work?

VoIP is an acronym for Voice over Internet Protocol. It converts voice signals into digital data packets.

Those are then transmitted over the internet, with no need for traditional phone lines. Once the data packets arrive at a recipient’s end, they transform back to voice signals. 

VoIP software is cost-effective, scalable, and offers a wide range of features. If you are seeking an efficient and affordable communication solution, it’s a great choice.


Expand business,
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Premium features



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Countries available



Security and data monitoring

Let’s talk about
pros and cons


Save On Phone Lines

Use your data network for voice communication to eliminate the need for separate phone lines and reduce long-distance calling expenses.

Avoid Hardware Changes on Scale

Remove or add extensions without the need for an extensive hardware change. Ensure flexibility for your evolving business needs.

Gather All Tools In One Platform

Integrate voice, video, messaging, and other collaboration tools into one to bolster collaboration and improve overall productivity

Stay Connected Anywhere

Get access to the office phone system anywhere you go and let employees stay connected and communicate regardless of their location.

You Depend On Internet Connectivity

IP PBX relies heavily on a stable internet connection. Any disruptions or outages in your network can impact voice quality and even render the phone system unusable

Initial Setup Costs Are High

While IP PBX systems offer long-term cost savings, the initial setup costs can be significant. You need to invest in IP-compatible phones, hardware, IT support, etc.

Your Data May Be Compromised

IP PBX systems may be susceptible to hacking, eavesdropping, and denial-of-service attacks. To protect sensitive data, you have to implement robust security measures.


Save Money on International Calling

Avoid expensive long-distance calling charges with features like International numbers and save both your and your customers’ money.

Embrace Freedom With a Remote-friendly Solution

Break down geographical barriers and receive calls anywhere with an internet connection. This possibility is invaluable for remote teams..

Adjust Your Calling Software As You Grow

VoIP adapts to your needs, no matter the size of your business. The highly scalable and adjustable software helps you grow seamlessly.

Optimize Workflows With Diverse Features

Get a diverse range of features at any stage of growth. Optimize workflows, collaborate, and maintain meaningful interactions.

You Need a Reliable Internet Connection

Just like cloud-based software, VoIP relies on a stable internet connection. You may experience delays, packet loss, and reduced call quality.

Call Quality May Be Lacking

Depending on the provider, you can experience echo or latency issues, which negatively impact the quality of communication and user experience.

You Can Face Security Threats

Depending on the provider, VoIP can be vulnerable to threats like hacking, eavesdropping, and other malicious activities.


What is the difference between IP PBX and VoIP?

The difference between IP PBX and VoIP is in their scope and function: IP PBX (Internet Protocol Private Branch Exchange) is a phone system within a company that manages internal and external call switching, using IP (Internet Protocol) for call routing. 
VoIP (Voice over Internet Protocol), on the other hand, is a broader technology that enables voice communications and multimedia sessions over the Internet.

What is IP PBX used for?

IP PBX is used primarily for managing the internal telecommunications of a business. It routes calls between users on local lines while allowing all users to share a certain number of external phone lines. It offers features like voicemail, call forwarding, and call queuing.

Do people still use PBX?

Yes, people still use PBX systems, especially in business environments. Modern PBX systems have evolved into IP PBX. It has more advanced features and flexibility compared to traditional, analog PBX systems.

CloudTalk is a data-driven solution for exceptional customer experience and intelligence is a key part of it.

Schedule a demo today and find out for yourself.