Hosted Private Branch Exchange (PBX) systems allow businesses to create a virtual phone system without the expensive equipment and setup often required by traditional phone systems. Instead, a hosted PBX system will enable you to make and receive calls through software that transfers data over the internet using voice-over-internet-protocol (VoIP) technology.
Key takeaways
- Hosted PBX systems are excellent for 24/7 customer support, call monitoring, and disaster recovery.
- Cost savings are immediate when a business adopts a hosted PBX service provider.
- The intuitive interface and customer service support make it easy for agents to learn the software.
Hosted PBX Defined
A hosted PBX is a virtual phone system that replaces the landline or traditional telephones used in business offices or residential homes. Specifically, a cloud-based hosted PBX solution utilizes VoIP and the internet to make and receive phone calls.
The PBX service provider also manages all the equipment in a cloud-based data center, delivering secure and reliable phone services via the internet connection. Additionally, these systems offer helpful features and applications, such as web browser-based dashboards similar to the RingCentral Admin Portal, which allow management to configure each employee’s options.
Difference between a hosted PBX & a non-hosted PBX system
The primary difference between hosted and non-hosted PBX systems is the set-up and equipment maintenance. A hosted PBX is maintained by the service provider, who supports all the hardware, including the data and software, at an off-site data center. This setup benefits business owners because they only need VoIP phones, mobile phones, and a signaling device to create a distributed phone system.
In contrast, a non-hosted PBX system is maintained by a company that keeps all its equipment on premises. By having more control, non-hosted PBX systems allow businesses to customize their features in various ways, which works well for companies that need more flexibility and data security.
A hosted PBX system can communicate with traditional phones via the PSTN. In contrast, non-hosted PBX systems use an extension number to connect to an internal device and require an SIP trunk for PSTN communication. Therefore, they provide greater flexibility and scalability for growing organizations.
What are the benefits of using a hosted PBX?
Cost savings are often cited as the primary reason for using a hosted PBX because a business does not have to purchase any physical infrastructure, which eliminates maintenance costs, and requires no upgraded hardware purchases every three to five years. However, other tangible benefits come with using a hosted PBX phone system, such as:
Greater flexibility & mobility
Hosted PBX phone systems are often flexible and provide opportunities for building mobility in a business. Within remote or distributed teams, employees can connect to the cloud-hosted PBX from anywhere. In-office users can also switch office calls from desk phones to softphones or mobile devices, and answer calls on the go.
Easy installation & setup
Most hosted PBX systems offer a plug-and-play telephone system that can quickly get a business up and running with minimal impact on operations. The intuitive interface also makes learning how to use the hosted VoIP system easier.
Enhanced customer support
Many businesses that require cross-channel customer support use a hosted PBX system to route calls and other communication methods. For example, a hosted PBX system can handle inbound and outbound calls, emails, and web/chat sessions from any location. Companies needing omnichannel support will also gain from a cloud contact center module. This feature improves customer service responsiveness and resolution times by managing call volume and aligning agents with customers.
Increased redundancy & disaster recovery
Geo redundancy is crucial for virtual phone systems as it guarantees more reliable service during technical failures or natural disasters. Consequently, hosted PBX phone system service providers maintain dedicated resources and servers in various cities worldwide, along with multiple transit providers. These systems feature an automatic software-based failover mechanism that can activate the failover servers and redundant routing, making them operational within seconds.
Real-time monitoring & analysis
Cloud-hosted PBX offers access to advanced features, such as call control, call recording, queues, wallboards, and a visual display of real-time data related to the provided PBX services. This real-time monitoring can also generate reports on each agent’s performance for further analysis, utilizing call metrics like average time per call and the median of all calls.
Data security & reliability
Hosted PBX systems encrypt and store data off-site, making it more difficult for attackers to access. Because the service provider manages and executes the software upgrades, firewalls, and security patches, choosing a PBX system with well-documented data encryption practices and compliance is essential.
Improved collaboration
A hosted PBX system improves collaboration through unified communication features, such as video conference calls, chat sessions, and audio calls that are accessible anytime and anywhere. Users can also create workspaces for chat sessions or video conference calls to resolve issues.
What are the key features of a hosted PBX?
Hosted PBX systems offer numerous advanced features that would incur extra costs if you use a traditional PSTN phone or are unavailable on landline phones. Specifically, Cloud PBX systems include auto-attendants that route calls without human intervention, call forwarding, voicemail-to-email, conference calls, chat sessions, and other capabilities included in the table below:
| Hunt Groups | Distribute calls from a single number to a group of phone numbers. |
| Find me | Allows a user to receive a call at any location. |
| Follow me | Lets a user receive calls on a designated phone. |
| Directed call pickups | Enables users to pick up incoming calls on another user’s extension using an access code. |
| Do not disturb | Setting that lets a user turn off incoming calls on their phone. |
| Hot desking | Lets a user move from desk to desk after logging into your virtual PBX account, typically used in a shared workspace. |
| Call parking | Enables a user to put a call on hold and allows any extension or phone to retrieve the call. |
Case studies of successful PBX implementation
Urge Palette
Urge Palette is an art supply company in Riverside, California, owned by entrepreneur and gallery owner Fritz Aragon. Before choosing VirtualPBX as its service provider, the store was frustrated with its previous phone service. So, the company sought to save money and improve call routing by setting up an automated attendant phone system.
After choosing VirtualPBX, Fritz Aragon stated, “The ability to engage with multiple customers simultaneously proved to be transformative. This capability has been particularly beneficial during busy periods when customers consistently reach out. Now, we no longer need to put everyone on hold, a significant improvement for our efficiency and customer service.”
Therefore, using VirtualPBX allowed Urge Palette to save on a costly phone subscription and helped streamline its communications by eliminating spam calls and creating a more effective call routing strategy.
Ceras Health
Another VirtualPBX customer, Ceras Health, is a remote healthcare provider that uses digital tools and artificial intelligence to improve patient monitoring. While Ceras Health was using an on-premise PBX system in the past, the company was open to a hosted PBX system that met its needs.
Many healthcare providers opt for an on-premise PBX system because it grants greater control over their data security, customization, and reliability. However, Ceras Health discovered that transitioning to VirtualPBX provided additional features that would benefit the business, including access to application programming interfaces (APIs), call queues, voicemail, and reporting.
Because VirtualPBX satisfied the high standards for reliability and advanced features, Ceras Health transformed its communication stack, as well as enhanced productivity and customer support.
How does a hosted PBX work?
One of the great things about a hosted PBX is that a service provider will supply the software and hardware, like VoIP phones, and all you need is a reliable internet connection. By using VoIP, a hosted PBX system uses the internet to send and receive calls. So, any time you send a call or another form of communication to a telephone, it will go through your hosted PBX service provider.
For example, when a call is directed to a residential phone number, the hosted PBX data center equipment transfers it to the PSTN. This equipment converts the digital signal into an analog signal before it reaches the PSTN. Then, the call continues to pass through gateways until it arrives at the nearest central office where the recipient resides, and the person receiving the call is alerted by their phone ringing.
The process also works in reverse, using gateways to convert analog calls to a digital format when a traditional phone user calls a VoIP number. VoIP calls to a mobile device are also converted to a digital signal and transmitted over the internet. Then, the signal is converted to analog before reaching its destination so the caller and the person called can communicate. See Figure 1.
What are some reputable cloud-based providers?
One of the best ways to find hosted PBX service providers is to use a reputable source that has already evaluated them based on pricing, key features, and ratings. At TechnologyAdvice, we’ve done some of this research for you.
Expert Tip
Click here to check out the top cloud-based PBX service providers: Best cloud-hosted PBX service providers for small businesses.
How to choose the right hosted PBX provider
There are a lot of factors to consider when trying to select the best hosted PBX provider for your organization.
- Growth rate: Your potential growth rate is one of the first factors to consider when choosing a PBX service provider for your expanding business. As a growing organization, you want your service provider to grow with you and accommodate your future needs.
- Scalability: Depending on your growth rate, you should also seek a provider that caters to the size of your business. A service provider that only caters to small to mid-size companies is not a good match, even if the cost is cheaper than that of other providers, if your business is on track to grow beyond that capacity.
- Pricing: Budget and operational costs should always be considered long-term. Before choosing a provider, consider whether the payment plan and cost meet your needs today and whether they will in five years when you add inflation to today’s prices.
- Features: Any features advertised by a provider should be assessed and tested to ensure the most vital ones you require function properly. Consider: What essential features does your business need, and does the service provider include them? Additionally, how do the features compare operationally to those of another vendor and do they come at an extra cost?
- Service and support: Customer support is another important consideration. If your company needs 24/7 support, select a provider with a comprehensive package and multiple support channels, such as live chat, phone, or ticketing system.
VoIP & PBX
VoIP is a crucial element of a PBX service provider, encompassing customer service and call center software. Before deciding on a phone system, ask the PBX service provider which customer service and call center software solutions are integrated with your PBX system to ensure optimal customer support.
Here are additional software products to evaluate that can be featured partners of a PBX vendor solution:
Reviewing the links above should give you examples and a baseline that helps clarify the exact products you want. Specifically, you should look for an integrated, hosted PBX service provider solution with customer support capabilities that complement your business needs.
Frequently asked questions (FAQs)
Yes, because a PBX system uses the Internet to make calls, it doesn’t have the same long-distance costs as other phone systems.
VoIP is a technology for sending and receiving calls online. Hosted PBX is a cloud-based phone system that uses VoIP to support communication.
Customers do not, but technical staff and the customer support team coordinate to access the data center during unplanned outages if a physical action is required inside the data center. If the data center is temporarily down, PBX providers will work to resolve issues remotely because the system is designed to failover to another data center.
