Virtual PBX revisited

Editors Note:

This article written for VOIP magazine back in 2004 is worth revisiting.

Back in 2004 when I first wrote this article for the most part there was nothing commercially available  now, Jan 2009, the market is crowded with offers claiming to be virtual PBX’s . At APconnections, we currently use an offering from  A true virtual PBX. Make sure you look under the hood at anything you evaluate.  All  the 800 service numbers call themselves virtual PBX’s; however, in our opinion, simply having a call answer service in the sky  is not a PBX. Read on for a detailed definition.

Before reposting we searched for the original but were unable to find it online.


Art Reisman

By Art Reisman, CTO, APconnections makers of NetEqualizer Internet Optimization Equipment

Outsourcing Communications with a Virtual PBX


A new breed of applications emerging from the intersection of VoIP and broadband may soon make the traditional premise-based PBX a thing of the past. Virtual PBX, hosted and delivered by today’s telcos and cable operators, is quickly becoming an option for businesses looking to outsource portions of their communications network. Rather than purchase and maintain an expensive piece of equipment, you can now sign up for a pay-as-you-go service with all of the functionality of an on-site PBX but with none of the expense.

To some, this idea may sound like a return to the past and, in a sense, it is. AT&T began delivering PBX functionality through its Centrex services in the 1970s. However, upon closer investigation, it is clear that the functionality delivered and the economics of the two approaches are very different.

The Private Branch Exchange: A Brief Primer

A PBX or private branch exchange allows an organization to maintain a small number of outside lines when compared to the number of actual telephones and users within an organization. Users of the PBX share these outside lines for making telephone calls outside the organization (external to the PBX).

Onsite PBX became popular and matured in the 1980s when the cost of remote connectivity was extremely high and the customer control of hosted PBX-like services of the time (Centrex) was limited, if it was even offered. In 1980, providing advanced, remote PBX services to a building with 100 employees would have required AT&T to run 100 individual copper lines from the local exchange to each telephone at the site.

As more and more businesses opted to install a PBX onsite, competition for customer dollars drove ever more extensive “business-class” features into these devices, further differentiating the premise-based PBX from the hosted products offered by telephone companies. Over time, PBX offerings gradually standardized into the product set that today we have come to expect when we pick up any business phone: voice-mail, auto attendant, call queuing, conferencing, call transfer, and more.

Flash forward from 1980 to 2005. Today, 100 direct phone lines can be transported from one location to another over many miles with no more than one wire. Remote access to control a PBX outside of your building is also trivial to implement with a simple Web portal. Technological advances coupled with feature stability and the broad appeal of PBX “applications” makes them a prime candidate for hosting.

A business starting today can have a full-featured hosted PBX with a single high-speed Internet connection. These virtualized services would require no additional equipment to purchase or maintain.

Defining Virtual PBX

Businesses looking to purchase such a service today can expect to find significant differences in the features and functionality available among offerings being marketed under the, often interchangeable, terms hosted or virtual PBX. To alleviate confusion and provide a starting point in your quest to outsource your communications network, the perfect, hosted PBX service would have the following features:

Auto-detectionThe PBX must dynamically detect remote stations from any place in the world and provide dial tone (As opposed to having a user dial in to obtain service. See the sidebar, Start with a Dial Tone).
Start with a Dial Tone
There are products on the market that remotely host a set of PBX services and require the user to dial in with a standard phone so the PBX can identify the caller. This is a viable approach to providing a hosted PBX with established stability. However, it does have a few restrictions not applicable to a pure hosted PBX.

  • When using the PBX services, the caller ties up a local phone line and blocks calls directly made to that line.
  • Obtaining a dial tone for an outbound call can only be done by first connecting to the PBX, or as a final alternative just using the standard phone line to dial out without going through the PBX, which takes away all of the cost and convenience benefits of the PBX.
  • A truly hosted PBX solution must provide a dial tone without first dialing in.

    Service Provisioning New service provisioning must be self-service with no expensive customer premise equipment required. For example, a customer with a credit card and access to a provider’s Web page should be able to initiate worldwide service in a matter of minutes.

    Standards Support Off-the-shelf SIP phones must be supported by the hosted service. A virtual PBX should not lock customers into using specific equipment or proprietary protocols.

    Affordable Start-up costs should be minimal and usage-based, allowing a small business to seamlessly grow and add stations as needed, without ever needing a disruptive upgrade or requiring a large capital investment.

    Level Rates Outbound and inbound toll rates should be provided at wholesale prices globally by the service provider. The customer can be assured of one published competitive price for outgoing calls and incoming calls.

    Administration Each business using the service should have access to a private portal allowing them to administer features and options. The organization’s account and services should be secure and accessible to a designated administrator 24/7.

    Bundled Applications The service must offer a minimum set of applications common to an onsite PBX. The most common of which include: transfer, conference, forward, find me, follow me, voice mail, auto attendant, basic call reporting, and inbound and outbound caller ID.

    Technology Considerations

    While the benefits to a hosted PBX solution are immediately obvious–elimination of equipment hard costs and the specialized knowledge required to keep it up and running–there are drawbacks to consider when adopting an emerging technology.

    The first point to consider is that the technology behind hosted PBX services has not yet developed to the point of large-scale enterprise deployments. Currently, the organizations that will see the most benefit from a hosted solution are small- to medium-sized businesses.

    Quality of service, the shadow that follows every voice over IP application, is the overriding technology hurdle that consumers need to be aware of when considering a hosted PBX solution. Latency can also be an issue; the different routes that IP data takes across the Internet can cause speech breaks and dropped calls.

    QoS and latency are key considerations when discussing bandwidth requirements and network architecture with potential vendors. Being undersold on bandwidth when moving to an IP communications network can create problems above and beyond being oversold.

    Selecting a Vendor

    The low barrier to entry for vendors looking to offer hosted PBX services has created a number of options for consumers and driven down costs, but customers need to be aware that not all service providers are equal.

    Existing Infrastructure Deploying a world-wide hosted PBX service as outlined above requires a significant infrastructure investment to handle the centralized switching needed to move millions of simultaneous call around the world. When investigating service providers, look for a vendor that has the knowledge to grow not only with your business but also with the broad adoption of the technology as a whole. Having a tested, existing infrastructure in place for business-class communications is key.

    Service Provider Network One method of alleviating IP voice quality issues on a regional basis is by staying within a large service provider network. For example, if an organization uses a Qwest T3 trunk service at its headquarters and an employee travels to neighboring cities with Qwest DSL service in their hotels, it is unlikely that quality problems will be experienced at the carrier level. Choosing a vendor that understands how your organization will use the service should be an important part of your selection process.


    While adoption is not yet widespread, hosted services are here and will only get better with time. As companies continue to seek the benefits of outsourcing the elements of their enterprise–from business processes to core technologies—adoption will continue to grow, making hosted PBX is a technology to keep your eye on in 2005.

    Note the author uses a solution from Aptela and has found their support to be top notch and was the main reason for switching about 4 years ago.

    QoS on the Internet — Can Class of Service Be Guaranteed?

    Most quality of service (QoS) schemes today are implemented to give priority to voice or video data running in common over a data circuit. The trick used to ensure that certain types of data receive priority over others makes use of a type of service (TOS) bit. Simply put, this is just a special flag inside of an Internet packet that can be a 1 or a 0, with a 1 implying priority while a 0 implies normal treatment.

    In order for the TOS bit scheme to work correctly, all routers along a path need to be aware of it. In a self-contained corporate network, an organization usually controls all routers along the data path and makes sure that this recognition occurs. For example, a multinational organization with a VoIP system most likely purchases dedicated links through a global provider like ATT. In this scenario, the company can configure all of their routers to give priority to QoS tagged traffic, and this will prevent something like a print server file from degrading an interoffice VoIP call.

    However, this can be a very expensive process and may not be available to smaller businesses and organizations that do not have their own dedicated links. In any place where many customers share an Internet link which is not the nailed up point-to-point that you’d find within a corporate network, there is contention for resources. In these cases, guaranteeing class of service is more difficult. So, this begs the question, “How can you set a QoS bit and prioritize traffic on such a link?”

    In general, the answer is that you can’t.

    The reason is quite simple. Your provider to the Internet cloud — Time Warner, Comcast, Qwest, etc. — most likely does not look at or support TOS bits. You can set them if you want, but they will probably be ignored. There are exceptions to this rule, however, but your voice traffic traveling over the Internet cloud will in all likelihood get the same treatment as all other traffic.

    The good news is that most providers have plenty of bandwidth on their backbones and your third party voice service such as Skype will be fine. I personally use a PBX in the sky called Aptela from my home office. It works fine until my son starts watching YouTube videos and then all of a sudden my calls get choppy.

    The bottle neck for this type of outage is not your provider’s backbone, but rather the limited link coming into your office or your home. The easiest way to ensure that your Skype call does not crash is to self-regulate the use of other bandwidth intensive Internet services.

    Considering all of this, NetEqualizer customers often ask, “How does the NetEqualizer/AirEqualizer do priority QOS?”

    It is a very unique technology, but the answer is also very simple. First, you need to clear your head about the way QoS is typically done in the Cisco™ model using bit tagging and such.

    In its default mode, the NetEqualizer/AirEqualizer treats all of your standard traffic as one big pool. When your network is busy, it constantly readjusts bandwidth allocation for users automatically. It does this by temporarily limiting the amount of bandwidth a large download (such as that often found with p2p file sharing) might be using in order to ensure greater response times for e-mail, chat, Web browsing, VoIP, and other everyday online activities.

    So, essentially, the NetEqualizer/AirEqualizer is already providing one level of QoS in the default setup. However, users have the option of giving certain applications priority over others.

    For example, when you tell the NetEqualizer/AirEqualizer to give specific priority to your video server, it automatically squeezes all the other users into a smaller pool and leaves the video server traffic alone. In essence, this reserves bandwidth for the video server at a higher priority than all of the generic users. When the video stream is not active, the generic data users are allowed to utilize more bandwidth, including that which had been preserved for video. Once the settings are in place, all of this is done automatically and in real time. The same could be done with VoIP and other priority applications.

    In most cases, the only users that even realize this process is taking place are those who are running the non-prioritized applications that have typically slowed your network. For everyone else, it’s business as usual. So, as mentioned, QoS over the NetEqualizer/AirEqualizer is ultimately a very simple process, but also very effective. And, it’s all done without controversial bit tagging and deep packet inspection!

    VoIP Call Quality Hindrances, Meet NetEqualizer

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