A Private Branch Exchange system (PBX) is a private telephone network that allows businesses to give employees unique phone numbers within their networks while also having a common outbound channel when calling people outside of them. Traditionally, this arrangement was meant for landlines—but since landlines are being phased out by many businesses, PBXs are quickly shifting to newer software and cloud-based systems.
One of the main drivers of these newer systems is known as Session Initiation Protocol (SIP), which is a signaling protocol that enables internet-based calling and video conferencing. And due to how SIP works through VoIP systems, no landlines are needed to make local or long-distance calls.
In fact, it’s not even necessary to get rid of existing PBX hardware when upgrading to SIP, because with SIP PBX you can leverage your existing hardware to work with the latest technology.
By understanding a little bit more about SIP PBX—including the factors that impact its price tag—you can compare it against traditional and hosted PBX solutions to find out which one is right for you.
What Does SIP PBX Mean?
A SIP PBX is just a PBX that’s enabled by SIP trunking instead of traditional landlines. In case you don’t speak techno-babble, that just means it’s a virtual way of making calls over the internet as opposed to relying on copper wire connections.
It’s also important to note how SIP differs from VoIP.
VoIP is the concept of using the internet for voice communication, and SIP is the specific protocol or set of instructions that devices use to make that communication happen.
SIP PBX deployment typically involves installing an IP PBX on-site, along with a physical SIP server. You probably need to have an in-house IT team to maintain the systems and keep security up to snuff.
SIP PBX vs. Traditional PBX
A traditional PBX uses regular old phone lines via the public switched telephone network. A SIP PBX totally removes that component, using only the internet to facilitate calls instead.
Some of the additional capabilities you can enjoy with a SIP PBX include the following:
- Flexibility and scalability: SIP PBX is far more scalable since it uses the internet and SIP trunks. Growing your organization is a lot easier as almost everything is fully virtual. Traditional systems, on the other hand, demand big-time hardware upgrades to keep up with growing companies.
- Cost efficiency and effectiveness: Traditional PBX systems require big upfront investments to get new hardware—not to mention the maintenance costs involved in keeping that hardware running. SIP PBX reduces setup and maintenance costs since there’s less hardware involved.
- Multimedia support: Traditional PBX tends to offer only voice calls—after all, there’s only so much you can do via a landline. Switching to SIP PBX opens the door to video conferencing and instant messaging, among other possibilities.
- Easier remote management: The web-based nature of SIP PBX makes it work much better for hybrid and fully remote teams—particularly IT. An IT team can easily monitor, configure, and fix issues with SIP PBX as they arise without needing to be on-site 24/7. That said, because certain components of SIP PBX are still physical, IT teams cannot be fully remote.
Traditional PBX still offers some advantages for companies, particularly those who just cannot afford the downtime that an upgrade involves. They are also more secure, in theory, since they are located on-site and thus offer the user physical access and control.
Nevertheless, advancements in cybersecurity could eventually render even this advantage moot or close to it.
SIP PBX vs. Hosted PBX
A hosted PBX is a step up from traditional PBX since it also utilizes the cloud instead of just multi-line phone systems.
However, the hosted PBX hardware resides with the hosted PBX vendor, which is somewhere off-site from your organization. In contrast, SIP PBX uses only your own on-site hardware.
A few areas where a hosted PBX arrangement shines are as follows:
- Cost savings: Off-site PBX hardware lets you remove your on-site hardware. You enjoy cost savings in the form of reduced hardware itself, the space it occupies, and utility costs.
- Scalability: Your hardware needs can change with the seasons or if your organization experiences rapid growth or downsizing. A hosted PBX lets you adjust quite easily to this, as most changes will be made by the vendor rather than your own team. If your needs grow, you can upgrade to a higher plan, and vice-versa.
- Updates and maintenance: You don’t need to invest money or borrow your IT team’s time to update and maintain your hardware or software. The vendor handles that in the background, giving your team more time to address other issues.
SIP PBX has an edge over hosted PBX in the following ways:
- Internet dependency: Both solutions use the internet, but SIP PBX allows you to retain all your own hardware and the core telephony features for internal and even external communications. If your internet goes down and you’re using hosted PBX, you’ll face severe interruptions and downtime. With SIP PBX, everything is under your control.
- Less customization: Hosted PBX may offer different plans and add-on features, but it’s still someone else’s hardware. This means there won’t be as many customization options as with SIP PBX, which lets you retain and change up your hardware as you see fit. SIP PBX may also make integrating your telephony into your other software systems a lot easier.
- Potentially better security: Plenty of hosted PBX solutions offer top-notch security. But again, you inherently have more control over security when you keep your hardware on-site. Thus, businesses that handle lots of sensitive data or are subject to industry-specific regulations might prefer SIP PBX. Direct control over your hardware also lets you implement redundancies and backup plans to improve security and add some peace of mind in case things go wrong.
How Much Does SIP PBX Software Cost?
SIP PBX software can cost anything from nothing at all to a few hundred dollars per month. As you might expect, the free, open-source solutions require more manual setup and configuration, but they save you money.
The high-end options that exist currently require a lot of investment but naturally come with strong security, regular maintenance, and solid customer support—not to mention more advanced features and scalability.
Thus, options are available for every type of organization. The following three represent the range of those options pretty well:
- FreePBX: This open-source graphical user interface offers great flexibility at truly no cost. Small firms with constrained budgets can make good use of FreePBX.
- 3CX: 3CX offers desktop and web calls, Microsoft Teams integrations, mobile iOS and Android apps, and the ability to answer Facebook company messages directly from the software. It has plans ranging from free forever—with up to 10 users—to $180 per system per year for 10 or fewer users on the Enterprise plan. Keep in mind that prices can be higher when it’s used as a hosted service.
- Cisco Unified Communications Manager: This is one of the highest-end SIP PBX software solutions out there, designed for companies with 25 to 1,000 users (but generally aimed at larger organizations). Its features include a unified communications manager with truly secure VoIP, mobile audio-video calls, an auto-attendant, and instant messaging. Pricing is not disclosed, since pricing at the enterprise level tends to be customized—but you can rest assured that it will be significantly higher than the previous options. Adding extra components will also increase costs even further.
In general, each separate user channel you add takes up more bandwidth, and the more channels you need, the more you pay. That goes for both voice and video.
Thus, it’s important to take careful consideration of how many channels you need so you can spend no more than you have to while getting the most out of your SIP PBX.
Keep in mind that you don’t have to convert every PBX channel to SIP. You can keep some non-SIP if you need to save the money.
Concurrent Call Count
This is the number of simultaneous calls that your software can handle. A higher maximum concurrent call count will cost more because the vendor must create a stronger SIP PBX infrastructure, and you’ll also need beefier internet.
Therefore, you should make sure you have enough concurrent call capability to support peak call volume. Even if you have to pay extra for high concurrent calling that you’ll rarely use, it obviously pays off when the system doesn’t crash just because you have many people on the phone at once.
Furthermore, scalability is important. Ideally, the provider you work with should make increasing your concurrent call capability easy with a fee that scales. However, if this kind of flexibility isn’t possible, you might consider investing in more concurrent call capability than you think you need at the moment, just to be safe.
Many SIP PBX software solutions charge by the license. In other words, you pay on a per-user basis.
Sometimes it’s not that simple, though, as licensing costs may scale with the total user count. For example, the price per user could change after a certain user count threshold is passed.
3CX does something similar to this—but it doesn’t charge specifically per user. Instead, it charges a fixed amount per system according to ranges of user amounts. For example, after 10 users, the non-hosted price for Enterprise plans jumps from $180 per year to $325 per year.
Thus, depending on where you currently fall on certain thresholds, adding just one extra user could dramatically increase your costs.
Some SIP providers might charge you for calling outside the company, especially internationally.
Pricing could be presented in one of two ways:
- Fixed price for intra-organization calls and per-minute charges for outbound calls
- Fixed price for intra-organization calls and unlimited outbound calls for a fixed additional fee
The first option would work better if you don’t make many outbound calls but need the capability just in case. The second option is likely to be better if you make a lot of outbound calls.
Some SIP PBX providers bundle extra features into their software, while others lack certain extras. If certain features are not included in the base price, most providers will let you purchase them a la carte to customize your software to fit your needs and budget.
For example, not every SIP PBX supports every communication method (such as audio, video, instant messaging, and more). Plus, even the ones that do support them all may not provide the same quality as competitors who offer fewer individual communication methods at a higher quality.
Other additional features that may drive up the price include:
- Auto-attendants: These automated answering services direct customers to the right department or agent.
- Call recording: Features to record, listen, and transcribe calls as necessary.
- Mobile apps: Some providers include iOS and Android apps for SIP PBX use. These can vary in intuitiveness and what features are available on mobile, making it sometimes worth it and sometimes not.
Consider what features are necessary for your business—and most importantly, the potential return on investment those features would actually provide.
SIP PBX systems often come with the ability to integrate with other business applications. This is incredibly helpful for most businesses, but it can sometimes cause the SIP PBX to cost more, and the provider may charge extra to perform integrations for you.
Make sure you assess what programs you have now and what might be worth integrating with a SIP PBX solution. See which SIP PBX options could handle those integrations and estimate the value of their implementation.
Setup and Support
You (or your in-house IT team) may be able to perform the installation yourself if you don’t need a lot of additional equipment and can use your existing PBX.
However, you might have to pay installation fees if you need new phones for your SIP solution. The same goes for session border controllers, which are devices that strengthen security by controlling how calls are started, run, and ended.
Ongoing support impacts price, too. Vendors that offer more support channels and wider availability—such as 24/7 phone support—often charge more to cover the additional overhead on their end.
Still, if you need the reassurance that comes with high-quality support, the extra investment may be worth it.
Traditional PBX telephony is quickly becoming obsolete, but that doesn’t mean you must scrap your hardware and move to a cloud-based, hosted PBX.
With SIP PBX, you can enjoy increased scalability, cost savings, and productivity while adapting to the age of remote work.
By weighing your SIP PBX options carefully and comparing the actual value-add of the features you might implement, you can easily wind up with the best possible solution for your business. Ultimately, the right SIP PBX platform should make both your existing hardware and your organization as a whole much more agile and future-proof.