PBX vs CentrexPBX vs CentrexGarry MeadowsGarry MeadowsSteve KlesperSteve KlesperTom OndickTom OndickAaron HurtAaron HurtRon PridemoreRon PridemoreTim WadeTim Wade

ConsiderationsConsiderations IntroductionIntroduction Definition of PBXDefinition of PBX Definition of CentrexDefinition of Centrex CostCost Responsibility / ControlResponsibility / Control FlexibilityFlexibility SupportSupport SecuritySecurity DrawbacksDrawbacks AdvantagesAdvantages Small Company OptionsSmall Company Options Medium Company OptionsMedium Company Options Large Company OptionsLarge Company Options SummarySummary BibliographyBibliography

PBX DefinitionPBX Definition Newton, Harry “Newton’s Telecom Dictionary” Newton, Harry “Newton’s Telecom Dictionary”

CMP Books, Feb 2002: 556CMP Books, Feb 2002: 556- Private Branch - Private Branch Exchange is a privately owned version of the Exchange is a privately owned version of the phone switches used in central office. This phone switches used in central office. This allows for the user to have more features on allows for the user to have more features on hand while allowing the exact needs of the hand while allowing the exact needs of the business to be designed when the PBX is business to be designed when the PBX is purchased. IP PBXs today handle voice and data purchased. IP PBXs today handle voice and data traffic simultaneously enabling users to traffic simultaneously enabling users to transport both over the same pipe. This transport both over the same pipe. This provides large cost savings when implementing provides large cost savings when implementing VOIP solutions. Even though the PBX is a small VOIP solutions. Even though the PBX is a small switch, it must access the CO to connect to the switch, it must access the CO to connect to the PSTN to make external calls. There are several PSTN to make external calls. There are several advantages and drawbacks to the PBX which advantages and drawbacks to the PBX which will be covered in more detail later in this will be covered in more detail later in this presentation.presentation.

Centrex DefinitionCentrex Definition Newton, Harry “Newton’s Telecom Dictionary” CMP Newton, Harry “Newton’s Telecom Dictionary” CMP

Books, Feb 2002: 146Books, Feb 2002: 146- Centrex is a business telephone - Centrex is a business telephone solution offered by the local telephone company from solution offered by the local telephone company from the CO. Centrex adds several custom calling features the CO. Centrex adds several custom calling features that businesses require but still maintain the equipment that businesses require but still maintain the equipment and the floor space. Centrex systems are generally and the floor space. Centrex systems are generally easier to grow that a PBX as the phone company is easier to grow that a PBX as the phone company is responsible for ordering new equipment and dealing with responsible for ordering new equipment and dealing with installation. This frees the business from having to have installation. This frees the business from having to have personnel on staff to do provisioning and maintenance personnel on staff to do provisioning and maintenance for a complicated piece of equipment. Centrex services for a complicated piece of equipment. Centrex services today do allow users to make changes to their individual today do allow users to make changes to their individual lines remotely as well as receive call detail records which lines remotely as well as receive call detail records which were previously only available on PBX systems. Two were previously only available on PBX systems. Two large drawbacks are that Centrex services are cable large drawbacks are that Centrex services are cable intensive and the company is at the mercy of the CO as intensive and the company is at the mercy of the CO as to the total number of lines that are physically available to the total number of lines that are physically available in the CO.in the CO.

CostCostCost must be considered in several categoriesCost must be considered in several categories AcquisitionAcquisition – High initial cost for PBX, little for – High initial cost for PBX, little for

Centrex but a recurring monthly charge is appliedCentrex but a recurring monthly charge is applied Network AccessNetwork Access – PBX requires fewer lines; Centex – PBX requires fewer lines; Centex

requires a line for each extensionrequires a line for each extension MaintenanceMaintenance – Dependent upon PBX; Centrex MAC’s – Dependent upon PBX; Centrex MAC’s

cost are substantialcost are substantial FacilitiesFacilities – PBX owner pays the bill; Telco does for – PBX owner pays the bill; Telco does for

CentrexCentrex SecuritySecurity – Telco not as susceptible to attack; PBX – Telco not as susceptible to attack; PBX

trained staff neededtrained staff needed PredictabilityPredictability – Hardware and software changes in – Hardware and software changes in

PBX; Centrex rates subject to regulation (read PBX; Centrex rates subject to regulation (read contract)contract)

Responsibility / ControlResponsibility / Control

PBXPBX Controlled entirely Controlled entirely

by purchasing by purchasing businessbusiness

Limited only by Limited only by system constraints system constraints and financial and financial limitations of the limitations of the businessbusiness

CentrexCentrex Controlled by the Controlled by the

TelcoTelco Capabilities Capabilities

designed to meet designed to meet the needs of major the needs of major market demandmarket demand

Questionable Questionable flexibility for smaller flexibility for smaller organizationsorganizations

FlexibilityFlexibility

PBXPBX Hundreds of Hundreds of

features and features and software packages software packages

Managed easily Managed easily with no service with no service contracts requiredcontracts required

Finite limits based Finite limits based on capital on capital expenditureexpenditure

CentrexCentrex Limited features in Limited features in

comparison to PBXcomparison to PBX Real time MAC’s Real time MAC’s

can not be can not be performed and performed and may be very may be very expensiveexpensive

Special features Special features usually limited to usually limited to large organizationslarge organizations

SupportSupport

PBXPBX Dependent on Dependent on

availability of trained availability of trained staff and vendor staff and vendor technicianstechnicians

Technician turnover Technician turnover rate very highrate very high

System failure may be System failure may be expensive and labor expensive and labor intensiveintensive

CentrexCentrex Large, well trained Large, well trained

staffstaff Minimal downsideMinimal downside Monitored constantly Monitored constantly

with spare parts on with spare parts on hand.hand.

Included (usually) in Included (usually) in leasing agreement leasing agreement with little to no cost to with little to no cost to the userthe user

SecuritySecurity

PBXPBX DISA TrunksDISA Trunks Remote Remote

Maintenance PortsMaintenance Ports IVRIVR Traditional PBX Traditional PBX

systems more systems more vulnerable than vulnerable than Centrex to outside Centrex to outside attacksattacks

CentrexCentrex Responsibility of Responsibility of

TelcoTelco Taken very Taken very

seriouslyseriously Assumes Centrex Assumes Centrex

user has taken user has taken steps to avoid steps to avoid credit card abusecredit card abuse

DrawbacksDrawbacks

PBXPBX Possible system crashPossible system crash Floor space and technical Floor space and technical

knowledge requiredknowledge required Large amount of money up Large amount of money up

frontfront CPE equipment (in certain CPE equipment (in certain

cases) must be purchased cases) must be purchased from the same vendorfrom the same vendor

Technology could become Technology could become obsolete making it difficult obsolete making it difficult to find parts and serviceto find parts and service

CentrexCentrex Every extension requires Every extension requires

its own copper lineits own copper line Call made within office Call made within office

must first go to CO to be must first go to CO to be routed back to officerouted back to office

Reconfiguration of the Reconfiguration of the switch must be done by COswitch must be done by CO

Features fewer than that of Features fewer than that of PBXPBX

Tax savings by leasing a Tax savings by leasing a Centex lines are Centex lines are nonexistentnonexistent

AdvantagesAdvantages

PBXPBX Tax benefits for purchasing Tax benefits for purchasing

PBX can be seenPBX can be seen Calls made internally are Calls made internally are

switched at the PBX; switched at the PBX; requires less outside linesrequires less outside lines

Extensions possible: 9999Extensions possible: 9999 Vast service combinations Vast service combinations

may be purchasedmay be purchased Configuration updates Configuration updates

accomplished by trained accomplished by trained staffstaff

Five digit in house dialingFive digit in house dialing Multiple PBXs may be Multiple PBXs may be

connected to create large connected to create large virtual PBXvirtual PBX

CentrexCentrex Implementation fast and Implementation fast and

inexpensiveinexpensive Service is not required by Service is not required by

the customerthe customer Features similar to many on Features similar to many on

PBXPBX Limitless number of outside Limitless number of outside

lines availablelines available Upgrades accomplished Upgrades accomplished

without end users without end users knowledgeknowledge

Floor space and power Floor space and power requirements met by Telcorequirements met by Telco

Security responsibility of Security responsibility of TelcoTelco

Reliability generally higherReliability generally higher

Small Company NeedsSmall Company Needs

A company with ten people or less will A company with ten people or less will likely not want to spend excess money on likely not want to spend excess money on a large system, nor want to hire a a large system, nor want to hire a technical person to operate the system. technical person to operate the system. Therefore, a Centrex system would be the Therefore, a Centrex system would be the best solution. Purchasing 10 lines at an best solution. Purchasing 10 lines at an approximate cost of $20-$25 per line approximate cost of $20-$25 per line would be significantly cheaper than a PBX would be significantly cheaper than a PBX system. Telephone sets would be the only system. Telephone sets would be the only CPE required. CPE required.

Medium Company NeedsMedium Company Needs

In this area, numbers and future growth are very In this area, numbers and future growth are very important. Leasing 100 Centrex lines at $25 per important. Leasing 100 Centrex lines at $25 per month would be reasonable compared to buying month would be reasonable compared to buying a PBX. However, if the company is fairly young a PBX. However, if the company is fairly young and plans to grow rather quickly, a PBX would be and plans to grow rather quickly, a PBX would be the best solution. This would allow the company the best solution. This would allow the company to add extensions without wasting time or money to add extensions without wasting time or money waiting for Centrex services from the phone waiting for Centrex services from the phone company. Generally, a company with 100 people company. Generally, a company with 100 people will have its own IT personnel which could easily will have its own IT personnel which could easily be trained to operate and maintain a PBX system. be trained to operate and maintain a PBX system. Nevertheless, there are many variables that could Nevertheless, there are many variables that could cause a medium sized company to lean one way cause a medium sized company to lean one way or the other when it comes to Centrex or PBX.or the other when it comes to Centrex or PBX.

Large Company NeedsLarge Company Needs

Large companies usually have requirements for a Large companies usually have requirements for a PBX system. Generally speaking, 90% of calls are PBX system. Generally speaking, 90% of calls are made internally. This means that only 10% of the made internally. This means that only 10% of the number of calls made go to the CO; therefore, out number of calls made go to the CO; therefore, out of 1000 lines in a PBX only 100 would need to of 1000 lines in a PBX only 100 would need to connect to the CO. This presents a large savings connect to the CO. This presents a large savings over a Centrex which requires a minimum of one over a Centrex which requires a minimum of one line per station. Companies of this size also have line per station. Companies of this size also have large turnover which would lead to high costs if large turnover which would lead to high costs if maintenance was left to CO. The PBX also offers maintenance was left to CO. The PBX also offers access to internal voice mail as well as call access to internal voice mail as well as call transfer, conference call and speed dial features. transfer, conference call and speed dial features. If employees are not located in the same building, If employees are not located in the same building, multiple PBXs may be tied together to create a multiple PBXs may be tied together to create a virtual PBX allowing for 5 digit dialing between virtual PBX allowing for 5 digit dialing between buildings.buildings.

SummarySummary The age old battle of Centrex Vs PBX is not a cut The age old battle of Centrex Vs PBX is not a cut

and dry issue. Many variables such as future and dry issue. Many variables such as future growth, cost, and ability to maintain systems growth, cost, and ability to maintain systems needs to be taken into account. Both systems needs to be taken into account. Both systems have distinct advantages and disadvantages. have distinct advantages and disadvantages. Therefore, overall requirements drive the final Therefore, overall requirements drive the final decision. Today PBXs are getting smaller and decision. Today PBXs are getting smaller and cheaper, while Centrex services are being added cheaper, while Centrex services are being added that are comparable to that of the PBX. that are comparable to that of the PBX. Companies need to meet with appropriate Companies need to meet with appropriate vendors to get estimates before making their final vendors to get estimates before making their final decision. Future requirements for voice over IP decision. Future requirements for voice over IP (VOIP) and video calls are being met by IP PBXs (VOIP) and video calls are being met by IP PBXs and emerging Centrex services. IP PBXs will allow and emerging Centrex services. IP PBXs will allow the company to migrate slowly from TDM to IP the company to migrate slowly from TDM to IP with less cost to the company.with less cost to the company.

BibliographyBibliography

Newton, Harry “Newton’s Telecom Dictionary” CMP Books, Feb Newton, Harry “Newton’s Telecom Dictionary” CMP Books, Feb 2002: 146,5562002: 146,556

http://munshi.sonoma.edu/s96/bu420/pbx.html http://munshi.sonoma.edu/s96/bu420/pbx.html

Bates, Regis J & Gregory, Donald W “Voice and Data Bates, Regis J & Gregory, Donald W “Voice and Data Communications Handbook” 4Communications Handbook” 4thth edition, Osborne/McGraw edition, Osborne/McGraw Hill, Jan 2001:175-188Hill, Jan 2001:175-188

Cole, Marion “Introduction to Telecommunications” 2Cole, Marion “Introduction to Telecommunications” 2ndnd Edition, Edition, Prentice Hall, Jan 2002 131-132Prentice Hall, Jan 2002 131-132

http://www.nwfusion.com/columnist/2002/1014edit.htmlhttp://www.nwfusion.com/columnist/2002/1014edit.html, Dix, , Dix, John Gloves come off in IP Centrex vs IP PBXJohn Gloves come off in IP Centrex vs IP PBX