Given how some resources in the Internet have used the terms “VoIP” and “cloud PBX” interchangeably, it’s not at all surprising that most people who are new to these concepts can be confused. Are these two terms really the same, or they actually very different from each other? How do we tell the difference? Does it really matter?
First: They are actually very different, but related terms.
Second: We can tell the difference by keeping in mind that one term refers a technology, while the other refers to an incarnation of that technology.
Third: It actually does matter, if you want to evaluate the right kind of phone solution for you.
The difference
VoIP or Voice over Internet protocol is an Internet-based technology that allows you to use your computer and Internet networks to make phone calls. Essentially, it takes sound data (such as your voice) and turns it them into digital signal packets that can be transmitted quickly and easily over a virtual connection. While the primary incarnation of this technology involves using the computer itself as a phone – just add a headset and microphone – you can also use VoIP with your regular phone provided you attach an analog telephone adaptor (ATA) to it.
Cloud based PBX, on the other hand, involves a more advanced approach to using VoIP. Beyond simply allowing you to make and receive calls, this gives you an entire virtual private branch exchange for professional use. Essentially, this term more accurately refers to having an entire phone system (including features like voice mail, call forwarding and the like) functioning over the Internet. The service provider pretty much delivers the phone service to you, without forcing you to connect to static lines.
How does knowing the difference help you decide on a phone solution?
Knowing the difference gives you a proper gauge of what you can actually use for telephony. If you simply want to be able to make phone calls using the Internet, then a standard VoIP phone service ought to be good enough for you. But if it’s full-on business-appropriate functionality you’re looking for, you have to look at a more specific incarnation of VoIP: cloud PBX.
Now that you know how to differentiate VoIP vs. cloud based PBX, you can have a better idea of how you can approach telephony in the 21st century.