PBX v. Centrex

Centrex viewed as expensive over owning your own PBX or IP PBX, but the services are still very attractive for small-to-midsize companies.

Centrex may have lost the debate to PBXs but the service technology refuses to be silenced.

At first, Centrex was pushed as a fair tradeoff for a business-owned and managed PBX phone switch. The service was viewed as comparatively expensive, dependent on carriers to make management changes and, depending on the carrier, having limited features.

PBXs had none of these shortcomings, but customers had to lay out the cash to buy the switch, manage and maintain it and buy the trunk lines that connect corporate sites into a private phone network. And they had to pay for annual maintenance and periodic software upgrades.

Such PBX virtues also explain the tenacity of Centrex particularly among smaller businesses that have limited resources for a telecom staff to take care of their own phone networks. They simply can’t afford an investment in running a private phone network.

With service providers providing and managing all the gear Centrex requires, capital outlay is minimal, as is the level of expertise needed to make the phones work.

With the advent of VoIP, less expensive - free for open source versions - IP PBXs have emerged, and the debate is renewed. IP PBXs cost less than their predecessors and are designed to be simple enough that relatively non-technical people who run small businesses can operate them.

VoIP also means a morphing of Centrex services into managed IP PBX services, with actual IP PBXs being installed on site with management interfaces that put customers in control of features and configuration if they want it.

But having carriers manage devices on customer networks rather than managing devices within their network cloud opens up a separate set of problems. “It's one thing to be an expert on the cloud side, and quite another to look into a customer's Ethernet infrastructure, see which component is causing a problem and fix it remotely,” says Ed Basart, the CTO of IP PBX vendor ShoreTel in a Network World debate on the topic

A counter argument is that IP PBX services make the cost of phone service more predictable. “Hosted solutions' flat monthly fees eliminate the guesswork,” says Dan Hoffman, president and CEO of provider M5 Networks.

With the control they give and the intimate linking of voice with other applications they can provide, owning IP PBXs still wins the argument, but not once and for all. Centrex and its offspring will continue the debate.

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