What is a Hosted PBX System?

Posted on: 2016-02-01 | Categories:VoIP VoIP Providers VoIP Services | Tags:hosted pbx system what is a hosted pbx system

Though a lot of people are familiar with and understand hosted PBX systems, the concept of hosted PBX boxes can be difficult to grasp at first. For a long time, any product or service which had cloud, hosted or online in its name signified a loss of control to the business managers in the enterprise. Enterprise IT departments especially resisted the change as they could not customize or control the services.

Nevertheless hosted services soon became part and parcel of the business workflows in any organization. So it is not surprising that hosted IP boxes or hosted VoIP systems have also made inroads in the enterprise space. When you get right down to it, hosted PBX systems are no different than the myriad enterprise grade Software As a Service(s) that are available for most processes.

IP PBX System

An IP PBX system consists of SIP trunks, phone clients (can be any combination of soft phones, desk phones, mobile devices or computers) as well as the PBX itself, which may be nothing more than software installed on a server within the network. Just like a regular PSTN PBX, IP PBX systems are also owned and controlled by the business itself. The only difference being that the enterprise is connected to the ITSP through SIP trunks (so that calls can be routed over the Internet) rather than traditional phone lines.

These on premise solutions are customizable, upgradable and flexible. They offer many advantages to organizations, especially as they grow in size. The organization can enjoy significantly lower costs per call and over the lifetime of the equipment, the Total Cost of Ownership is not very high. However these systems are not without their drawbacks either.

Even though on premise IP PBX solutions can work out to be cheap over the long-term, they require significant investment up front that may be impossible for smaller businesses to afford. In addition, a great deal of expertise and human resources is required to design, set up and implement end-to-end turnkey solutions. This is where hosted PBX systems step in.

Hosted PBX System

The concept of hosted PBX systems has existed long before the introduction of VoIP but it has really gained popularity only with IP PBX boxes. Most people are used to the phone system sitting in a room or closet somewhere in the office building. In the case of hosted PBX systems, the equipment and hardware is purchased, owned, maintained and controlled by a third-party vendor that specializes in providing VoIP services. All VoIP telephony services related to making calls are delivered online.

Hosted PBX systems or as it is commonly called – hosted VoIP – works similarly to how most enterprises get their email services nowadays. Before SaaS and cloud computing really took off, organizations maintained their own email servers so that employees could use email for business purposes. But now, most of these services are operated by external vendors and delivered to the enterprise as a service.

There are many benefits to using hosted PBX services as opposed to on premise solutions for businesses. This is why cloud VoIP has been steadily gaining popularity over the last decade. VoIP service providers are able to leverage IP telephony, cloud computing, multitenant architecture and economies of scale to provide enterprise grade phone services at extremely low prices. The features and price points of modern VoIP services simply could not have been possible with older generation PBX systems.

Who Uses Hosted PBX Systems?

The biggest advantage of a hosted PBX system is that it requires little to no investment on the part of the business to get started. Many vendors offer free trials to check out their service and the monthly or annual subscription plans often do not cost much. For this reason, small and medium businesses were the first enterprises to start using these services.

However the industry has matured considerably since the early days and vendors have improved their capabilities manyfold. It has reached the point where even larger enterprises are willing to give up control in order to get hassle free services through the cloud.

During the early days of hosted PBX services, audio quality and reliability were primary concerns. These issues have largely been sorted out and as long as the enterprise has sufficient bandwidth and high-speed Internet connections, the voice quality of hosted VoIP services is equal to or even better than toll quality.

Getting Started with Hosted PBX

Before an enterprise plans to upgrade to VoIP, they should assess their data network and equipment to handle the extra traffic that would result from adding voice calls. In many cases, it may require updating hardware to handle VoIP and its related protocols. Sometimes the organization may have to get faster data connections or network equipment as well. Generally the process will not take long to complete.

After this, the organization can choose from different vendors and subscription plans that offers the best value for their requirements. The intense competition in the industry means that clients have a lot of choice. The absence of traditional contracts means that the organization can try out different vendors before making a commitment.

Hosted PBX also means that the business only has to pay for the resources it actually uses instead of having to purchase a given number of lines or numbers. New lines can be easily added or removed to accommodate changes within the business as well.

Given the numerous benefits of cloud VoIP, it’s easy to see why hosted PBX – along with many other hosted services – is quickly becoming popular among business organizations of all sizes.