Whether you’re considering an upgrade to your PBX business phone system or just looking at ways to add phone features and more mobility to your office, one option is “Hosted PBX.”

What is Hosted PBX?

Hosted PBX is when your phone system is “hosted” at an off-site location, instead of being operated from a server located at your company. (Reminder: PBX stands for Private Branch Exchange.)

With Hosted PBX, also referred to as Hosted Voice and sometimes as Hosted VoIP, your business phone system is run from a “cloud” data center by your phone services provider. Your phones are connected to your provider over the internet, and you leverage PBX features such as making phone calls, extension dialing, auto attendants, voicemail-to-email and call routing – without having any on-site equipment. 

What does “Hosted VoIP” mean? 

Like Hosted Voice, Hosted VoIP (pronounced “voyp”) is a term providers and others in the industry use interchangeably when referring to Hosted PBX business phone systems.

VoIP, which stands for Voice Over Internet Protocol, transmits voice calls and voice data through IP networks, LANs (or Local Area Networks) and the internet. It’s also sometimes called IP Telephony.

However, there can be differences between Hosted PBX and Hosted VoIP depending on the provider. For example, some providers use an “Over-the-Top” model, which means they transmit voice and data over the same internet connection. Initially, this over-the-top model came with some call quality issues – and still does, to a certain extent – but the bigger issue comes when voice or data troubleshooting is needed. A line outage or service issue can mean loss of both data and voice simultaneously. 

What are the benefits of Hosted PBX?

A primary advantage of Hosted PBX for businesses is cost. Compared to a standard onsite PBX, your company can save significantly on IT equipment, infrastructure and maintenance expenses because your phone system is being operated externally, off-site by your provider.

And Hosted PBX costs less to set up — your provider typically takes care of installation and setup.

With a Hosted Voice system, your business can get the latest phone features, integrated through software apps. Some providers can offer high-definition voice and other capabilities, such as deep data integrations and video conferencing. What’s more, features can be added or eliminated very easily – often through a user interface that you control.

Also, the Hosted PBX expense falls under an operational expenditure instead of a capital one, eliminating the budget forecasting and cash output that comes with the purchase of on-site equipment. As an operational expenditure, Hosted PBX can help you eliminate heavy upfront investments and streamline cash flow.

Is Hosted PBX the same as Virtual PBX?

No. Hosted PBX is a complete business phone system while Virtual PBX is a part of that system.

Virtual PBX is the automated answering service that provides routing options to handle and transmit inbound calls. It reroutes incoming calls to cell phones, landlines or VoIP extensions via an auto attendant or interactive voice response (IVR). It doesn’t have control features or outbound calling like a full Hosted PBX system. 

What kind of special phones do I need with Hosted PBX?

IP phones, as in your desk phones with Ethernet ports or software phones (mobile phones), are used with Hosted Voice. 

Hosted PBX can work with Analog Telephone Adapters (ATAs) but providers say your phone capabilities will be limited. They recommend IP phones, particularly if you expect to grow your business beyond a few employees.

Are there different plan options for Hosted PBX?

Providers do offer tiered usage for Hosted PBX  and a range of features that can support and enhance your overall business needs, as well as the needs of specific employees. One of the real perks of Hosted PBX is that its range of features easily stays up-to-date with the most current technologies and innovations.

Is Hosted PBX reliable?

Yes. Hosted PBX phone systems are reliable, but your provider can share specifics on the performance of its Hosted service and the support it can provide your business phones.

Some Hosted PBX services provide separate lines for data and voice, eliminating the risk of an outage or service issue bringing all connections to a halt.

What type of businesses is best suited for Hosted PBX?

It’s true that Hosted PBX (Hosted Voice) is a great fit for smaller businesses or startups that don’t have IT resources in-house. But any size company wanting to save on IT expenses could benefit from Hosted PBX, especially companies that switch from an onsite PBX to a hosted system.   

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