PBX vs Centrex
Garry Meadows
Steve Klesper
Tom Ondick
Aaron Hurt
Ron Pridemore
Tim Wade
Considerations
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Introduction
Definition of PBX
Definition of Centrex
Cost
Responsibility / Control
Flexibility
Support
Security
Drawbacks
Advantages
Small Company Options
Medium Company Options
Large Company Options
Summary
Bibliography
PBX Definition
Newton, Harry “Newton’s Telecom Dictionary”
CMP Books, Feb 2002: 556- Private Branch
Exchange is a privately owned version of the
phone switches used in central office. This
allows for the user to have more features on
hand while allowing the exact needs of the
business to be designed when the PBX is
purchased. IP PBXs today handle voice and
data traffic simultaneously enabling users to
transport both over the same pipe. This
provides large cost savings when implementing
VOIP solutions. Even though the PBX is a small
switch, it must access the CO to connect to the
PSTN to make external calls. There are several
advantages and drawbacks to the PBX which
will be covered in more detail later in this
presentation.
Centrex Definition
Newton, Harry “Newton’s Telecom Dictionary” CMP
Books, Feb 2002: 146- Centrex is a business telephone
solution offered by the local telephone company from the
CO. Centrex adds several custom calling features that
businesses require but still maintain the equipment and
the floor space. Centrex systems are generally easier to
grow that a PBX as the phone company is responsible for
ordering new equipment and dealing with installation.
This frees the business from having to have personnel
on staff to do provisioning and maintenance for a
complicated piece of equipment. Centrex services today
do allow users to make changes to their individual lines
remotely as well as receive call detail records which
were previously only available on PBX systems. Two
large drawbacks are that Centrex services are cable
intensive and the company is at the mercy of the CO as
to the total number of lines that are physically available
in the CO.
Cost
Cost must be considered in several categories
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Acquisition – High initial cost for PBX, little for
Centrex but a recurring monthly charge is
applied
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Network Access – PBX requires fewer lines;
Centex requires a line for each extension
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Maintenance – Dependent upon PBX; Centrex
MAC’s cost are substantial
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Facilities – PBX owner pays the bill; Telco does
for Centrex
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Security – Telco not as susceptible to attack;
PBX trained staff needed
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Predictability – Hardware and software changes
in PBX; Centrex rates subject to regulation
(read contract)
Responsibility / Control
PBX
Controlled entirely
by purchasing
business
 Limited only by
system constraints
and financial
limitations of the
business
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Centrex
Controlled by the
Telco
 Capabilities
designed to meet
the needs of major
market demand
 Questionable
flexibility for
smaller
organizations
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Flexibility
PBX
Hundreds of
features and
software packages
 Managed easily
with no service
contracts required
 Finite limits based
on capital
expenditure
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Centrex
Limited features in
comparison to PBX
 Real time MAC’s
can not be
performed and
may be very
expensive
 Special features
usually limited to
large organizations
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Support
PBX
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Dependent on
availability of trained
staff and vendor
technicians
Technician turnover
rate very high
System failure may be
expensive and labor
intensive
Centrex
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Large, well trained
staff
Minimal downside
Monitored constantly
with spare parts on
hand.
Included (usually) in
leasing agreement
with little to no cost to
the user
Security
PBX
DISA Trunks
 Remote
Maintenance Ports
 IVR
 Traditional PBX
systems more
vulnerable than
Centrex to outside
attacks
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Centrex
Responsibility of
Telco
 Taken very
seriously
 Assumes Centrex
user has taken
steps to avoid
credit card abuse
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Drawbacks
PBX
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Possible system crash
Floor space and technical
knowledge required
Large amount of money up
front
CPE equipment (in certain
cases) must be purchased
from the same vendor
Technology could become
obsolete making it difficult
to find parts and service
Centrex
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Every extension requires
its own copper line
Call made within office
must first go to CO to be
routed back to office
Reconfiguration of the
switch must be done by CO
Features fewer than that of
PBX
Tax savings by leasing a
Centex lines are
nonexistent
Advantages
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PBX
Tax benefits for purchasing
PBX can be seen
Calls made internally are
switched at the PBX;
requires less outside lines
Extensions possible: 9999
Vast service combinations
may be purchased
Configuration updates
accomplished by trained
staff
Five digit in house dialing
Multiple PBXs may be
connected to create large
virtual PBX
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Centrex
Implementation fast and
inexpensive
Service is not required by
the customer
Features similar to many
on PBX
Limitless number of
outside lines available
Upgrades accomplished
without end users
knowledge
Floor space and power
requirements met by Telco
Security responsibility of
Telco
Reliability generally higher
Small Company Needs
A company with ten people or less will
likely not want to spend excess money on
a large system, nor want to hire a
technical person to operate the system.
Therefore, a Centrex system would be the
best solution. Purchasing 10 lines at an
approximate cost of $20-$25 per line
would be significantly cheaper than a PBX
system. Telephone sets would be the only
CPE required.
Medium Company Needs
In this area, numbers and future growth are very
important. Leasing 100 Centrex lines at $25 per
month would be reasonable compared to buying
a PBX. However, if the company is fairly young
and plans to grow rather quickly, a PBX would be
the best solution. This would allow the company
to add extensions without wasting time or money
waiting for Centrex services from the phone
company. Generally, a company with 100 people
will have its own IT personnel which could easily
be trained to operate and maintain a PBX system.
Nevertheless, there are many variables that could
cause a medium sized company to lean one way
or the other when it comes to Centrex or PBX.
Large Company Needs
Large companies usually have requirements for a
PBX system. Generally speaking, 90% of calls are
made internally. This means that only 10% of the
number of calls made go to the CO; therefore,
out of 1000 lines in a PBX only 100 would need to
connect to the CO. This presents a large savings
over a Centrex which requires a minimum of one
line per station. Companies of this size also have
large turnover which would lead to high costs if
maintenance was left to CO. The PBX also offers
access to internal voice mail as well as call
transfer, conference call and speed dial features.
If employees are not located in the same
building, multiple PBXs may be tied together to
create a virtual PBX allowing for 5 digit dialing
between buildings.
Summary
The age old battle of Centrex Vs PBX is not a cut
and dry issue. Many variables such as future
growth, cost, and ability to maintain systems
needs to be taken into account. Both systems
have distinct advantages and disadvantages.
Therefore, overall requirements drive the final
decision. Today PBXs are getting smaller and
cheaper, while Centrex services are being added
that are comparable to that of the PBX.
Companies need to meet with appropriate
vendors to get estimates before making their
final decision. Future requirements for voice over
IP (VOIP) and video calls are being met by IP
PBXs and emerging Centrex services. IP PBXs will
allow the company to migrate slowly from TDM to
IP with less cost to the company.
Bibliography
Newton, Harry “Newton’s Telecom Dictionary” CMP Books, Feb
2002: 146,556
http://munshi.sonoma.edu/s96/bu420/pbx.html
Bates, Regis J & Gregory, Donald W “Voice and Data
Communications Handbook” 4th edition, Osborne/McGraw
Hill, Jan 2001:175-188
Cole, Marion “Introduction to Telecommunications” 2nd Edition,
Prentice Hall, Jan 2002 131-132
http://www.nwfusion.com/columnist/2002/1014edit.html, Dix,
John Gloves come off in IP Centrex vs IP PBX