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What is a Hosted PBX System? Your Best Guide for 2024

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What is hosted PBX?

Have you ever searched for a business phone system that meets your needs? A hosted PBX might be the perfect solution.

A simple definition would be: a hosted PBX (also known as hosted PBX or on-premise PBX), which is a cloud-based phone system that allows you to manage all your business calls without the need for complex physical equipment at your premises.

This system has revolutionized the way businesses manage their calls. Unlike traditional PBX systems, which require the purchase and maintenance of specific hardware, a hosted PBX system is entirely handled by a VoIP provider over the Internet.

A hosted PBX’s cloud service, also known as Cloud PBX, handles call routing, voicemail, and all other functions over the Internet instead of a local network.

It reduces hardware and IT maintenance costs and allows employees to work remotely, using the phone system and company number without being tied to a fixed location.

With a hosted PBX, you get access to high-end business telephony features without the high cost of an on-premises system. Setup is quick and easy. You don’t need to install hardware or manage updates, as the provider handles everything.

Global growth of hosted PBX systems

The global hosted PBX market is experiencing significant growth. Data Bridge Market Research shows PBX is expected to account for USD 14.06 billion by 2028.

Hosted PBX global growth

Over the past two decades, the business landscape has undergone drastic changes. This evolution, driven by the pandemic, led many companies to adopt hosted PBX solutions to facilitate remote work and maintain agile communications.

Organizations that still use traditional PBX systems, such as hotels with fixed lines in each room, typically do so due to the large initial investment in equipment and licensed software, for which they still pay fees.

It is clear that businesses are evolving towards more flexible systems, and it is essential for business phone systems to evolve to adapt to these changes.

Both business owners and IT administrators value solutions that work well. The days of relying on obsolete PBX servers and software to save costs are long gone.

Now, more than ever, it is essential to invest in technology that optimizes communication and improves operational efficiency without compromising service quality.

Differences between hosted PBX and on-premise PBX

Both hosted PBX and on-premises PBX offer telephony solutions for businesses. However, there are significant differences in hardware location, maintenance responsibility, and overall costs.

In this comparison, we will analyze the key features of each option to help you choose the one that best suits your business needs.

pros and cons of hosted PBX

Hardware location

  • On-Premises PBX: The PBX system hardware is installed on the company’s premises, providing greater control over infrastructure and security.
  • Hosted PBX: The PBX system hardware is located in a remote data center operated by the service provider, eliminating the need to invest in hardware and maintenance.

Maintenance responsibility

  • On-Premises PBX: The company is responsible for maintaining and updating the PBX system’s hardware and software. It may require internal IT resources or hiring an external provider.
  • Hosted PBX: The service provider is responsible for maintaining and updating the PBX system’s hardware and software, freeing you from these tasks. This allows you to focus on your business’s more important operations.

Hosted PBX costs

  • On-Premises PBX: Initial costs can be high, including purchasing hardware, software, licenses, and installation. There are also ongoing maintenance and update costs.
  • Hosted PBX: The cost is generally based on a monthly subscription model, making budget management easier. There are no initial hardware or software costs, and maintenance and updates are included in the subscription.


  • On-Premises PBX: On-premises PBX systems can be scaled to accommodate business growth, but this may require additional investments in hardware and software.
  • Hosted PBX: Hosted PBX systems are automatically scalable, as the provider can add additional resources as needed.


  • On-Premises PBX: Both PBX systems offer many features, such as voice calls, voicemail, conferencing, etc.
  • Hosted PBX: However, hosted PBX systems can offer more advanced features, such as integrations with CRM and collaboration tools, without additional investments in hardware or software.

How does a hosted PBX system work?

A hosted PBX system uses Internet Protocol (IP)-based technology to handle voice communications.

Instead of relying on traditional phone lines, calls are routed over IP networks using VoIP (Voice over Internet Protocol). Voice traffic can move across the company’s data networks, providing a more flexible and scalable solution.

When a company hosts a PBX, its phone system is routed to a VoIP provider. VoIP desk phones will replace traditional desk phones, which connect to the company’s existing data network.

The cloud-based VoIP service manages all call and PBX functions, such as routing, recording, and conferencing.

Call information is transmitted over an IP network to the provider’s cloud server, which then routes the call securely and efficiently, even to a traditional public telephone network (PSTN).

Users can manage call functions and system settings through an online portal accessible from any browser.

This approach simplifies the phone system’s management and allows operators to use any SIP-enabled device, providing greater compatibility and flexibility.

Additionally, businesses can reduce costs and improve operational efficiency by eliminating the need for complex physical hardware and placing operations in the cloud.

Benefits of a hosted PBX system

Hosted PBX systems offer several significant advantages for businesses of all sizes, including:


  • Scalability: Hosted PBX systems can be easily scaled to accommodate your company’s growth, adding or removing users as needed. It saves the significant initial cost of purchasing a system that is too large for your current needs or the need for costly changes later as your business grows.
  • Remote locations: Employees can access the PBX system from anywhere with an Internet connection, allowing for remote work and collaboration between offices. It can be beneficial for businesses with frequently traveling employees or multiple locations.
  • Compatible devices: Most integrated PBX systems are compatible with various devices, including desk phones, mobile phones, softphones, and desktop computers.

You can choose the device that best fits your company’s needs and your employees’ preferences.

Easy setup and maintenance

  • Quick installation: Hosted PBX systems can be quickly installed and configured, allowing you to use them immediately. It benefits businesses that speedily need a new phone system or more internal resources to set up and maintain an existing PBX system.
  • Minimal maintenance: A hosted PBX service provider takes care of all hardware and software maintenance and updates, freeing up your time and resources to continue focusing on other areas of your organization.
  • Technical support: Most certified PBX providers offer 24/7 technical support, giving you peace of mind in case your system has issues.


  • Flexibility: Another important feature is that they offer various customizable features, allowing you to configure the system to meet your business’s specific needs, including interactive menus, call queues, call recording, etc.
  • Web administration: Many hosted PBX systems can be managed through an easy-to-use web interface. This allows users to make changes to the system configuration without technical knowledge.
  • Control panel: Control panels offer real-time information on system usage, allowing you to identify and address potential issues.


  • Redundancy: Hosted in redundant data centers, ensuring your system continues functioning even in the event of a power outage or other problem at one data center.
  • High availability: Many hosted PBX providers offer an SLA (Service Level Agreement) that guarantees high availability, meaning you can be sure your system will be available when needed.
  • Disaster recovery: This is very important because if we have a significant problem with our system, they offer disaster recovery programs to help you restore your system in case of a major disaster.

Why should you switch to a hosted PBX system?

Important facts about hosted PBX systems:

  • Save up to 70% on phone costs: Eliminating expenses on equipment, installation, maintenance, and traditional call fees can save up to 70% on business telephony costs.
  • Reduce wait times.
  • Increase customer satisfaction.
  • Boost collaboration.

If you are thinking about expanding your team or opening a new office, a traditional PBX system can slow down the installation of new phones and extensions.

With a hosted PBX system, you can instantly create new numbers and lines, keeping your business running smoothly.

Maintaining a traditional PBX is not easy: you would need someone dedicated solely to this, which implies a high cost, in addition to equipment, maintenance, and repair costs.

With a hosted PBX, the provider takes on all these daily responsibilities rather than the internal staff, saving money and hassle.

Hosted PBX use cases


It’s an excellent solution if you need a quick and scalable communication solution without infrastructure complexities. It allows you to add lines and extensions instantly, which is excellent when your team proliferates.

You also reduce equipment purchase and specialist technician hiring costs. Being cloud-based, your team can work from anywhere, maintaining the flexibility and navigation required in a dynamic startup environment.

Remote workers

This system lets your employees handle calls and connections from anywhere with Internet access, ensuring everyone stays connected regardless of location.

A hosted PBX makes it easy to implement new employees and expand to new facilities without the high costs and complexities of the physical infrastructure. Operations and configuration are done online, providing efficiency and decentralization.

Multiple offices

If your company has multiple offices, this cloud-based infrastructure would be ideal for connecting all locations efficiently. It allows you to control all communications from a single platform, eliminating the need for physical hardware at each workstation.

Employees can communicate seamlessly, no matter where they are, using internal extensions as if they were in the same location.

How can VoIPstudio’s PBX system benefit your business?

With VoIPstudio, your company can eliminate costly traditional phone equipment and switch to a flexible and scalable phone system that works over the Internet.

Here are some advanced features you can find on the platform:

  1. Virtual switchboard: Efficiently manage incoming and outgoing calls from a centralized interface.
  2. Unlimited call recording: Ideal for meeting legal and training requirements, it allows the recording and storage of calls without limits.
  3. Automatic IVR operator: Directs incoming calls to the appropriate extension or department through an automated voice menu system.
  4. ACD queues: Efficiently distributes incoming calls among available agents, improving customer service and reducing wait times.
  5. Advanced call routing: Configure call routing rules based on schedules or specific criteria to optimize call management.
  6. Custom music on hold: Provide a more pleasant experience for customers while they wait with personalized messages or music.
  7. Integration with CRMs and applications: Integrates with popular CRM systems like Salesforce and Zoho, facilitating contact management and process automation.
  8. Mobile apps and softphones: Provides flexibility by allowing users to make and receive calls from their mobile devices or laptops.
  9. Advanced analytics: Offers dashboards and analytics tools to monitor call center KPIs, such as wait times and agent performance.
  10. Security and protection: Include network failure protection and emergency call security to meet specific regulations and ensure safety.

Discover VoIPstudio, the perfect business VoIP communication solution for your business

VoIPstudio free trial

  • Free Trial: 30 days free. Try it and see for yourself.
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  • Unlimited Users.
  • Includes 200 Call Minutes.
  • Free Internal Calls.

Frequently asked question about hosted PBX

– How much does a hosted PBX system cost?

The cost of a hosted PBX system can vary depending on the provider and chosen features. VoIPstudio offers plans starting at $ 4.99 per month per user, with advanced features such as call recording, virtual switchboard, and 24/7 technical support included.

– What is the main difference between PSTN and hosted PBX?

The main difference between PSTN and hosted PBX lies in the infrastructure and management of the phone system. PSTN uses traditional physical lines and proprietary equipment, while hosted PBX operates through the cloud, remotely managed by a provider, with no local hardware needed at the user’s premises.

– How to get a hosted PBX?

    1. Visit the VoIPstudio website and choose a plan that suits your needs.
    2. Sign up for a free trial or directly contact VoIPstudio to subscribe.
    3. Customize your system, selecting the features and settings you need.
    4. VoIPstudio will handle the implementation and configuration of the PBX system.
    5. Receive training on using the system and take advantage of the available technical support.

– What is PBX, and what is it for?

If you’ve ever called a company and had your call redirected, heard a personalized greeting, or been put on hold, you’ve already used a PBX system (private branch exchange).

A PBX is a telephone routing system that connects multiple office extensions and a small number of external lines.

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Thousands of businesses across the world trust VoIPstudio for all of their most vital business communications. Why not be the next?

Thousands of businesses across the world trust VoIPstudio for all of their most vital business communications. Why not be the next?

Start a free 30 day trial now, no credit card details are needed!