A private PBX is a telecommunications switch that is typically located on a company’s physical premises, requiring IT teams to maintain the expensive telephony system hardware on site. A cloud-based PBX is the virtual version of the PBX system, in which the company’s cloud-based telephone system uses the Voice over Internet Protocol (VoIP) to automatically answer and route calls.

A traditional PBX is connected by cables to the Switched Telephone Network (PSTN) to initiate a call. Equipped with virtual PBX solutions, the PSTN network uses an Internet connection to route the call. PBX services on the cloud are hosted in remote and secure data centers, as opposed to physical locations. .