What is a Hosted PBX?

Nearly every telecom or internet service provider is advertising that they can offer Cloud PBX, Hosted PBX and virtual PBX.

Q. What do those terms or jargon of words and letters really mean?

Before the emergence of the internet, most large businesses made use of a PABX system or rather a “Private Branch Exchange” which was basically a private network. It made sound business sense then to have your own telephone exchange. You would only get to pay for external calls since you would be renting time from the phone company to use their network but once the PABX system is set up all internal calls within the network was free of charge.

The growing importance of Voice over IP

Business communication has changed over the last two decades and has slowly made the PABX technology which once seemed irreplaceable a few years ago redundant. VoIP makes use of the internet infrastructure instead of the traditional PABX systems. The internet brings with it the ability to reduce costs as the set-up costs can be as low as $0 whereas an on-premise PABX system can typically cost upwards of $5000.00 to set up.

If connected to a well-engineered VoIP solution you can expect to save lots of money and improve productivity of your teams allowing you to deal with your customers in a more effective way irrespective of location. You quickly move away from having to set up dedicated voice lines to using the same data cables used to connect to the internet and your computers. Therefore, you use your landline, your computer, and a smartphone running a VoIP app to connect to the same PBX system.

Q. How does a Hosted PBX work?

Now that I have explained how VoIP works and how it can improve on the efficiency of your teams lets now look at what a “Hosted” PBX, “Cloud” PBX, etc means. This is when your trusted internet or VoIP service provider has its own servers handling all the communication through their infrastructure. Everything is done offsite – away from your premises or place of operation.

Your provider supports all those servers, and has its own support team, working around the clock to ensure everything continues to run smoothly. This allows you to enjoy economies of scale, such as increased bandwidth and access to other free calling features and to all you start-ups, this is how a company with half a dozen employees can compete with a large conglomerate that’s been in existence for ages!

The biggest advantage of PBX hosting and Cloud PBX hosting is how easy it is to move forward. As technology progresses, and as your company grows organically, there’s no need for a big capital expenditure, you can make minor adjustments to the level of service as you need it.