What is a hosted telephone system?

A simple definition would be: a hosted phone system (also known as a hosted PBX or on-premise PBX) is a cloud-based phone system that allows you to manage all your business calls without the need for complex physical equipment on your premises. This system has revolutionized the way businesses manage their calls. Unlike traditional PBX systems that require the purchase and maintenance of specialized hardware, a hosted PBX system is managed entirely by a VoIP provider over the internet. The cloud service of a hosted PBX, also known as a cloud PBX, handles call routing, voicemail and all other functions over the internet instead of a local network. This reduces hardware and IT maintenance costs and allows employees to work remotely and use the phone system and company number without being tied to a fixed location.

Advantages of a hosted telephone system

A hosted telephone system gives you access to high-end business telephony features without the high cost of an on-site system. Setup is quick and easy. There’s no hardware to install or updates to manage as the provider takes care of everything. In recent years, the corporate landscape has changed dramatically. This evolution, driven by the pandemic, has prompted many companies to adopt hosted PBX solutions to facilitate remote working and provide a flexible

Hosted PBX vs. on-premise PBX

Both hosted PBX and on-premises PBX offer telephony solutions for businesses. However, there are significant differences in terms of hardware location, maintenance responsibility and overall cost. In this comparison, we will analyze the key features of the two options to help you choose the most suitable solution for your business.

Location of the hardware

On-Premises PBX: The hardware of the PBX system is installed on the company’s premises, which allows better control over the infrastructure and security.

Hosted PBX: The hardware of the PBX system is located in a data center operated by the service provider, so that no investment in hardware and maintenance is required.

Responsibility for maintenance

On-premises PBX: The company is responsible for maintaining and updating the hardware and software of the PBX system. This may require internal IT resources or the commissioning of an external service provider.

Hosted telephone systems: The service provider is responsible for maintaining and updating the hardware and software of the telephone system and relieves you of these tasks. This allows you to concentrate on the more important tasks of your company.

Costs of the hosted PBX

On-premise telephone system: The initial costs can be high, including the purchase of hardware, software, licenses and installation. Then there are the ongoing costs for maintenance and updates.

Hosted PBX: Costs are usually based on a monthly subscription model, which makes budget management easier. There are no initial hardware or software costs, and maintenance and updates are included in the subscription.

Scalability

On-premise PBX: On-premise PBXs can be scaled to accommodate business growth, but this may require additional investment in hardware and software.

Hosted PBX: Hosted PBX systems are automatically scalable as the provider can add additional resources as required.

Functions

On-Premises PBX

Both systems offer basic functions such as:

Voice calls

Voicemail

Conference calls

Call forwarding

Call groups & waiting loops

Hosted TC systems

In addition to the standard functions, hosted systems offer:

Integration in CRM & collaboration tools (e.g. Salesforce, Microsoft Teams)

Automated updates & new features without IT effort

Mobile use & remote access on all end devices

Intelligent functions such as call analytics, voice recording, IVR (voice menus)

Real-time scalability – new users & functions can be activated immediately

How does a hosted PBX system work?

A hosted PBX system uses technology based on the Internet Protocol (IP) to handle voice communication. Instead of traditional telephone lines, calls are routed over IP networks using VoIP (Voice over Internet Protocol). Voice traffic can be routed over the company’s data networks, providing a more flexible and scalable solution. If a company operates a telephone system, the telephone system is routed to a VoIP provider. VoIP desk phones replace traditional desk phones, which are connected to the company’s existing data network.

The cloud-based VoIP service manages all call and PBX functions, e.g. forwarding, recording and conferencing. The call information is transmitted via an IP network to the provider’s cloud server, which then forwards the call securely and efficiently, even to a conventional public telephone network (PSTN).

Users can manage call features and system settings via an online portal that can be accessed from any browser. This approach simplifies phone system management and allows operators to use any SIP-enabled device, providing greater compatibility and flexibility.

Advantages of a hosted PBX system

Hosted PBX systems offer businesses of all sizes a range of benefits, including

Flexibility

Scalability: Hosted PBX systems can be easily scaled to meet the growth of your business by adding or removing users as required. This saves you the significant upfront cost of a system that is too large for your current needs, or the need for costly changes as your business grows.

Remote locations: Employees can access the PBX system from anywhere with an internet connection, enabling remote working and collaboration between offices. This can be beneficial for companies with frequently traveling employees or multiple locations.

Compatible devices: Most integrated PBX systems are compatible with a variety of devices, including desk phones, cell phones, softphones and desktop computers.

Easy setup and maintenance

Fast installation: Hosted PBX systems can be installed and configured quickly so that you can use them immediately. This benefits companies that need a new telephone system quickly or more internal resources for setting up and maintaining an existing PBX system.

Minimal maintenance: A hosted phone system provider takes care of all hardware and software maintenance and updates, leaving you with more time and resources for other areas of your business.

Technical support: Most certified PBX providers offer 24/7 technical support, so you can have peace of mind if you have problems with your system.

Optimization

Flexibility: Another important feature is that they offer various customizable features that allow you to configure the system to meet the specific needs of your business, including interactive menus, call queues, call recording, etc.

Web management: Many hosted PBX systems can be managed via a user-friendly web interface. This allows users to make changes to the system configuration even without technical knowledge.

Control panel: Control panels provide real-time information about system usage so you can identify and resolve potential problems.

Reliability

Redundancy: The system is hosted in redundant data centers so that it continues to function even in the event of a power failure or other problems in a data center.

High availability: Many hosted telephone system providers offer an SLA (Service Level Agreement) that guarantees high availability, meaning you can be sure that your system will be available when you need it.

Disaster Recovery: This is very important because if we have a major problem with our system, they offer disaster recovery programs to help you recover your system in the event of a major disaster.

I look forward to your questions!

Frank Frommknecht

Key Account Consultant