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Virtualized Voice and the VoIP Cloud

The cloud can seem like a daunting technology, especially for businesses who are accustomed to their traditional phone systems and on-premise hardware. However, the cloud is steadily becoming the norm in business communications.

So what is the cloud, and how does it work in conjunction with VoIP? The easy answer is that the "cloud" and terms like "cloud-based" or "virtual" are buzzwords that mean relatively the same thing: computing and connecting remotely over the Internet. Cloud VoIP, Virtualized VoIP, Virtualized Voice, and Voice in the Cloud are all different names for using VoIP with a cloud provider or service. However, there are few different ways that VoIP can work in the cloud.

There are three main types of Cloud VoIP:

  • Hosted PBX: More expensive, very very easy, relatively versatile
  • Virtual PBX: least expensive, least versatile
  • VPN VoIP: less expensive, relatively versatile, very difficult​
hosted cloud network

Hosted PBX as Virtualized VoIP

Choosing a hosted PBX provider means you can reduce costs on maintenance, upgrades, and service equipment.

Hosted VoIP, also referenced as Hosted PBX, is VoIP service that utilizes the cloud to deliver phone service. Essentially, you pay a subscription fee (usually charged on a per user/per month basis) to a VoIP service provider. In exchange, the VoIP service provider gives you VoIP service without any headaches.

The Hosted PBX provider sets up the system, sets up the extensions, sets up any features you may need, troubleshoots the system, and updates the system.

With Hosted PBX, you get a complete virtualized VoIP phone system, managed by the VoIP provider.

And what about Virtual PBX?

Virtual PBX is VoIP in the cloud too.

Virtual PBX is sometimes the same thing as Hosted PBX; other times, Virtual PBX works as a call-in/call-forwarding service.

virtual cloud pbx voip

VPN VoIP as Virtualized VoIP

A VPN is a virtual private network. Using a virtual private network to set up VoIP is like using a hosted PBX, but instead of the system being handled by the VoIP provider, you can handle it yourself.

Basically, you set up and run a PBX on a virtual server. When you have more calls or need fewer calls, you can automatically increase the amount of computing power you need.

If you're technically minded or you have a larger call network, VPN VoIP might be the better choice. You do need to know how to work Asterisk and how to manage servers.

cloud voip pbx

What's the difference between all these different Cloud VoIP services?

The major difference is price and time.

Hosted PBX

Hosted PBX is the most expensive per user. With hosted PBX as your virtualized voice system, you pay for each user who uses your VoIP phone system. You also get features and don't have to handle any of the work yourself.

If you have a small business of 20 users or fewer, hosted VoIP is probably the easiest and cheapest virtualized VoIP system.

Virtual PBX

Virtual PBX is probably the least expensive overall. However, Virtual PBX doesn't have as many features as hosted PBX. It's a supplemental/specialized phone system designed for mobile users and people who need calls forwarded easily but don't need to talk on the phone too often.


VPN VoIP is similar to SIP trunking. Basically, you set up and maintain the system yourself. However, since you control your own server, your own asterisk PBX, your incoming calls, your outgoing calls – everything, pretty much – you end up paying a lot less for your phone service.

The difficulty, of course, is being able to have the time and know-how to accomplish this. You also need to be able to manage your system constantly. You need to know how to work Asterisk, you need to know how to manage your server, and you need to know how to do all the other associated aspects of telecommunications.

For example, one of the things you need to know about when it comes to your VPN is network security. You need to protect your virtualized voice system from attacks – because they will happen.

But if you can do all the work, the cost will be significantly lower per user. Just make sure that this is worth your time.


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