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Virtual PBX

If your current business phone system is inflexible, expensive, and requires on-site maintenance, it may be time to switch from a traditional on-premises PBX system to a virtual phone system or UCaaS (Unified Communications as a Service) platform. Book a product tour to see how easy it is to make phone calls, send SMS/MMS messages, and even have video meetings with Dialpad—from anywhere!

For most businesses that are considering a virtual PBX phone system, their main must-haves are cost-effectiveness, flexibility, and ease of use.

But there's actually an even better option that lets you not only manage incoming calls, but also handle other communication channels—from a desktop or mobile app (aka. a softphone). More on that in a bit. For now, let's have a quick refresher on what virtual PBX is.

What is virtual PBX?

Virtual PBX, sometimes also referred to as cloud PBX, is a type of phone system that's a newer alternative to traditional PBX (Private Branch Exchange) systems. Rather than relying on physical hardware, switchboards, and landline connectivity, virtual PBX lets you make phone calls through the Internet.

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How does virtual PBX software work?

Virtual PBX uses technology such as cloud-based software and Voice over Internet Protocol (VoIP) to give you the same functionality as traditional PBX phone systems. While traditional phone systems send analog data through copper wiring and landlines, virtual PBX software sends that voice data digitally through the Internet.

Today, though, these types of cloud phone systems have evolved even more, and you're likely to hear about "UCaaS" or "unified communications platforms" instead of just cloud or VoIP phone systems. The difference: UCaaS and unified communications platforms don't just give you phone calls like PBX phone systems do—they also let you communicate in other ways, like through instant or SMS/MMS messaging, and also video conference calls.

For example, that's exactly what Dialpad gives you (in addition to all the usual business phone features you'd expect, like an auto attendant and IVR (interactive voice response):

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A few virtual PBX hosting comparisons

Virtual PBX vs. traditional PBX

The main difference between virtual PBX and traditional PBX is that virtual PBX systems use the Internet, while traditional PBX uses on-premises hardware and landlines.

This is hugely beneficial to small businesses and companies with remote teams or distributed offices around the world. Take TED, for example—you've probably seen one (or two, or five...) of their inspirational talks on YouTube. Their IT team was struggling with the endless maintenance and lack of flexibility of their previous on-site PBX phone system. After they switched to Dialpad’s unified communications platform, they eliminated these problems—and even got rid of desk phones altogether.

Both virtual PBX and traditional PBX typically have standard PBX features like call forwarding, conferencing, and voicemail.

Virtual PBX vs. IP-PBX

After traditional, analog PBX systems came IP-PBX phone systems, which was a first step in creating phone systems that worked over the Internet. Learn more about IP-PBX and how it compares to other types of PBX and VoIP phone systems.

Virtual PBX vs. hosted PBX

"Virtual PBX" is sometimes used synonymously with "hosted PBX," and essentially what "hosted" means is simply that your phone system is managed by a third party provider somewhere else—not in your own office. Your hosted PBX vendor likely has its own data centres and provides all the IP phones, hardware, software, maintenance, security, and upgrades you need.

❗ Something to note:

Not all hosted virtual PBX or hosted PBX providers will come with a desktop or mobile app that works on your computer, iOS, or Android devices. Many also don’t have robust contact centre features, and will charge you separately for call recordings. If you think you’ll need any of these features, your best bet is likely a UCaaS platform.

Small businesses could just opt for a virtual PBX without switching to an entirely hosted PBX service. This means you’ll retain your on-premises business phone system but upgrade your call handling, answering, and routing system to a virtual PBX so that you can access advanced features.

Thinking about a virtual PBX?

Dialpad gives you more than just a business phone system. Make phone calls, have video meetings, send instant messages, and more—all from one easy-to-use app. Sign up for a 14-day free trial to try it out yourself. It takes just a few minutes, and you'll even be set up with a virtual phone number!

The benefits of using a virtual PBX system (or UCaaS platform)

There are many advantages of using a virtual hosted PBX system (or even better, a UCaaS platform) over a traditional PBX system—for both small business and global enterprises.


With traditional PBX systems, you need to spend money on hardware, leasing telephone lines, and even hiring an IT team to deal with maintenance issues or upgrades.

With cloud-based unified communications platforms and the best virtual PBX providers, you typically save a lot of money since:

  • There's no hardware required

  • You have the choice of paying on a monthly or annual pricing plan

  • You don't have to worry about maintenance or upgrades

  • You can scale up—or down—based on seasonality and how you want to hire*

*Not every UCaaS platform or cloud phone system lets you add and remove users easily. Dialpad is one of the few that has this level of scalability—you can add phone lines or manage users, right in your online dashboard:

Adding managing phone number for someone in dialpad blog size

And speaking of pricing, some UCaaS platforms have very affordable plans that work great for small businesses. For example, Dialpad's least expensive plan starts at only $20 AUD per user per month, and comes with unlimited calling in your country, the US, and Canada—and unlimited SMS/MMS messaging in the US and Canada.

👇 Pricing breakdown of Dialpad's Talk plans:




$20 USD if billed monthly

1 License Minimum

  • Unlimited calling2
  • Unlimited SMS & MMS1
  • Call controls (call forwarding, transfer, hold, mute)
  • Custom voicemail greeting
  • Voicemail transcription
  • G Suite & Office 365 integrations
  • Fax (add-on)1
  • Custom off-hours routing


Contact us

100 License Minimum

All Pro plan features, plus:

  • 100% uptime Service Level Agreements (SLA)
  • Extensions
  • Unlimited office locations
  • Enhanced 24/7 Phone Support
  • Unlimited ring groups (departments)
  • Azure Integration
  • IAM/SSO Integrations (Okta, OneLogin)
  • Retention policies

It's more remote- and hybrid-friendly

Virtual PBX solutions use VoIP technology, meaning you can have outbound and incoming calls on your mobile phone, desk phone, or even a computer.

With Dialpad, for example, you can even make business calls from your personal mobile phone—while shielding your personal number. Just choose which caller ID you want to display before you make the phone call:

Change Caller ID
🔎 Further reading:

When Second City (yes, we're talking about Tina Fey and Stephen Colbert's Second City) experienced a fire at their HQ, they lost their on-premises PBX system. With Dialpad, they were able to make the switch to a new communications platform. Now, whether their team is performing in Europe or working remotely in North America, everyone can stay connected.

More features + functionality in one platform

One big advantage that UCaaS and virtual PBX services have over traditional PBX is they can give you a lot more functionality in a (usually) more cost-effective package.

Whether it's a versatile app that lets you have voice calls, video conferences, and messaging all in one place, or real-time transcriptions, or an integration with your CRM, the sheer range of things you can do with a good UCaaS platform is huge.

Dialpad, for example, integrates with not just one CRM, but a whole bunch of them including HubSpot, Zoho CRM, and Salesforce:

Salesforce Power Dialer blog size
🔎 A deeper dive:
Cloud PBX solutions are generally more modern than traditional PBX, but even so, not all cloud phone systems are made equal! CF Real Estate Services was using an outdated cloud-based PBX that couldn’t be integrated with other apps and tied workers to their desk phones. Remote work was almost impossible. See how they turned their business communications around.

Not only that, Dialpad also has a fully integrated contact centre platform, which is perfect if you run a call centre team. By "fully integrated," we mean that your agents and supervisors can handle all those customer calls and chat with teammates or do video conferencing—all from one app. One login, one account, one beautiful user interface:

Single Item Card Sentiment analysis for a list of calls in real time blog size

And yes, agents can have flexibility too and do their work from the mobile app. (Definitely can't do that with most PBX phone systems!)

What to look for in a UCaaS or virtual PBX software

Ease of use

Whether you run a startup or big business, we'd argue that this is a must-have in any cloud phone service, virtual PBX softphone, or software. That's why we designed Dialpad to work across any device, from iOS to Android to PC to Mac—even web browsers. All you need is a good Internet connection, and you can start working from anywhere.

Phone call on desktop mobile app blog size


Fun fact: Dialpad's global voice network and unique split cloud architecture are designed to give you excellent call quality, all around the world. (And our Enterprise customers also enjoy an incredible 100% uptime!)

Call recording

Most phone systems should have this, whether they're a virtual PBX or traditional PBX (though it's harder to find with older phone systems). What you want to pay attention to here is how much storage you have for those call recordings. (With Dialpad, you get unlimited call recordings!)

Custom voicemail greetings

Again, this is something that all virtual PBX systems and UCaaS platforms should come with. Specifically, it should be easy for you to update your voicemail greetings, and retrieve or listen to your voicemails. Dialpad goes one step further with its visual voicemail feature, which transcribes your voicemails in real time. It's perfect for busy business owners or employees who are in back-to-back meetings all day and can't listen to voicemails. This way, they can read them instead!

Visual voicemail in dialpad blog size

Easy call forwarding

Again, most phone systems have a call forwarding feature, but they're often hard to use or require you to contact a support team to make changes to your settings. With Dialpad, you can add up to five call forwarding numbers and make changes whenever you want, right in your online dashboard:

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Auto attendants and call queues

A good auto attendant feature is a must-have for most businesses. Not only can auto attendants route calls for you, they can also provide basic information like business opening hours so that your employees can focus on more complicated and high-value conversations.

Toll-free number support

This isn't a must-have for every business, but if you want a toll-free number or vanity number at some point, it's probably good to make sure your UCaaS or virtual PBX provider has that option.

Thinking of switching to a virtual PBX?

There are lots of versatile, robust options beyond just virtual PBX service providers. If your business needs to make phone calls, have video meetings, and send instant + SMS/MMS messages regularly, book a product tour to see how Dialpad can streamline all those channels for you!