What is a Hosted PBX Phone System and how can it Revolutionize your Business Communication

hosted pbx

A hosted PBX is essentially a cloud-based phone system, as it is hosted off-site and over the Internet rather than at the physical location of the business, this results in cost savings and limited maintenance.

What is hosted PBX?

PBX is an acronym for Private Branch Exchange; it describes a business telephone system that enables phone calls to be switched between different lines within an organization. The term originates from analog PBX’s where telephone operators would manually field and switch lines so the calls would connect to the relevant person.  Typical PBX is known as ‘on-premise’, meaning a piece of hardware that stays in the organization’s building. 

The hosted system provides the same services and features as an on-premise PBX but is installed a little differently. It resides in the cloud, meaning you don’t need a hardware system in the office, minimizing installation and maintenance. Your provider or ‘host’ maintains the technology for you completely off-site, while still supplying you with a great connection and other benefits, which we’ll get to later in this guide.

How does it work?

There are three basic components to a virtual PBX: the hosted PBX provider, a VOIP phone, and the Internet. Once it is set up, your phones will connect to the PBX host via the Internet, and your connection will remain open at all times to make and receive calls.

Hosted PBX operates through cloud-based servers maintained by a third-party provider. Which means that all the hardware and software necessary to run the phone system are housed in off-site data centers, rather than on-premises within the business’s facility.

Users connect to the Hosted PBX system via the Internet. Each user typically has a desk phone, softphone application, or mobile app through which they access the system. These devices communicate with the cloud-based servers to facilitate voice calls, messaging, and other telephony features.

hosted viop

When a call is placed, the Hosted PBX system handles call routing and management. This includes functionalities such as call forwarding, call queuing, auto-attendants, voicemail, and call recording. These features are configured and managed through an online portal provided by the Hosted PBX provider.

Hosted PBX systems offer a wide range of advanced features designed to enhance communication and collaboration. These may include:

  • Auto-attendants: Automated greetings and menu options to direct callers to the appropriate extension or department.
  • Voicemail-to-email: Conversion of voicemail messages into email format for easy access and management.
  • Call forwarding: Routing calls to alternative numbers or devices, such as mobile phones or other extensions.
  • Conferencing: Ability to host multi-party conference calls, either ad-hoc or scheduled.
  • Unified communications: Integration with email, instant messaging, and other communication channels for seamless collaboration.
  • Analytics and reporting: Insights into call volumes, durations, and other metrics to optimize communication workflows.

The Advantages of Hosted PBX


One of the main reasons businesses use hosted PBX is that it cancels out a lot of the costs that come with an on-premise system. Since the PBX is in the cloud and is taken care of by your provider, it eliminates installation, hardware and maintenance costs. Costs incurred are included in the system package. Thus cutting down on staff, as you’re less likely to need IT staff that are dedicated to solving problems with the PBX, as your provider does this for you. Maintenance and software updates are all managed externally, leaving you to focus on your business. This is great if you’re a small business or a startup.


As businesses evolve and expand, so do their communication needs. Hosted PBX systems are inherently scalable, allowing organizations to effortlessly add or remove extensions, features, and users as required. This scalability ensures that businesses can adapt to changing demands without disruption.

Flexibility and Mobility

In an era defined by remote work and global connectivity, flexibility and mobility are paramount. Hosted PBX systems empower employees to communicate seamlessly from any location with an Internet connection. Whether working from home, traveling, or collaborating across borders, users can access the same advanced features and functionalities as they would in the office.

Advanced Features

A hosted PBX comes with lots of features that benefit your business’ communications and overall, your corporate image. A cloud-hosted system provides you with features like call routing and switching, auto attendants, phone menus, conference calls, voicemails, greetings, call queuing and recording. 

Ease of Management

With intuitive web-based interfaces and centralized management consoles, administering and configuring a Hosted PBX system is straightforward and user-friendly. Businesses can easily customize settings, manage users, and access real-time analytics to gain insights into communication patterns and performance.

What equipment do I need?

All you need is broadband access, a router and compatible handsets. One of the most appealing factors is the lack of equipment that you have to manage and monitor yourself. As your provider takes care of equipment and the system is in the cloud, you don’t need any physical equipment in the office. All you need is an internet connection and handsets that work with the system. 

To set up a hosted system, first you need to find out how many phone extensions you’ll need. If this number changes, your provider will add and remove as necessary. Next is to upgrade your internet. If your current internet supply doesn’t work well with the amount of calls you need, upgrade it to one with better broadband, faster speeds and higher bandwidth. Finally, choose a supplier and equipment and the set up is taken care of for you.


In summary, Hosted PBX phone systems revolutionize business communications by offering a flexible, feature-rich, and scalable telephony solution that leverages the power of the cloud. By outsourcing the management and maintenance of their phone systems to a trusted provider, businesses can focus on their core operations while enjoying the benefits of modern communication technology.

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