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A hosted PBX is a business VoIP service that provides a company's employees phone extensions, a range of call features, and call mobility.
What is a Hosted PBX?
A Private Branch Exchange (PBX) is hardware or software that divides phone lines into extensions for each employee to use.
A hosted PBX uses VoIP service instead of traditional phone lines. Unlike an on-premise IP PBX with SIP trunking, the PBX hardware is controlled and stored by an offsite host—in most cases, the VoIP service provider. Hosted PBX systems deliver robust call features that simplify or automate call management. Hosted PBX also saves money as it is generally cheaper than traditional phone service.
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A Note On Virtual Hosted PBX Systems
Providers occasionally offer virtual hosted PBX systems, also known as a virtual PBX. A stripped-down version of a hosted PBX, virtual PBX systems typically manage call forwarding or mobile VoIP applications. Recently, providers have started changing the product descriptions of virtual hosted PBX systems to mean that a virtual PBX is a cloud-based hosted PBX solution. Now, hosted PBX and virtual PBX are basically synonymous.
What Is Hosted PBX VoIP Service Good For?
There are multiple reasons to choose a hosted PBX VoIP service plan for your business.
Including the low calling rates and the unlimited in-network calling provided by VoIP service, a hosted PBX delivers:
- Efficient call handling
- Predictable monthly costs
- Scalable to accommodate business growth
- No hassles, no troubleshooting, no updating
- Service providers keep security and encryption features up-to-date
- Virtual office capabilities for real-time collaboration by out-of-office employees
Compared to legacy, premise-based systems, hosted PBX systems are much more affordable. PBX hardware can cost thousands of dollars, which is not a viable option for many small businesses. Medium-sized businesses can save up to a few thousand dollars on their phone system.
There is no upfront cost with a hosted PBX system; instead, providers bill at a flat monthly rate per user. Hosted PBX VoIP service rates starts around $20 per user for a month.
Owning PBX hardware also means configuring, securing, maintaining, upgrading, and troubleshooting it in-house. Hosted PBX systems are completely managed by a service provider. Hosted PBXs are fully scalable, meaning you can easily add or reduce the number of extensions on your plan. And set-up is as easy as connecting an IP phone to the Internet.
Hosted PBX systems also allow for greater mobility and location flexibility for employees.
Because VoIP service runs off an Internet connection, you can access the account management portal from a laptop and make calls from your computer using a VoIP softphone. Telecommuting or traveling employees can access contacts, email, voicemails, and fax from wherever they are working that day.
Hosted PBX doesn't require as much training as other VoIP systems - but training can't hurt. Learning how to use your provider's hosted PBX interface can really help, as can learning Asterisk or other IP PBX software. Even if you can't change the settings on your PBX, knowing how VoIP works and how a hosted PBX works will make solving problems easier and understanding tech support easier.
How Do I Choose a Hosted PBX Provider?
Beyond budget, there are two main items you should look for in a provider: reliability and available features. You can also review a longer explanation on choosing providers in our VoIP Service Provider Selection Strategy FAQ article.
Most Hosted PBX providers offer a standard set of features with their monthly service plans, but the features vary by provider. It's important to identify which features you will want in your phone system and find the providers that include as many of those features in their plans.
The basic features include:
Hosted PBX systems are completely managed by a service provider.
Telecommuting or traveling employees can access contacts, email, voicemails, and fax from wherever they are working.
- Auto attendant
- Call logs
- Call recording
- Call queues
- Do Not Disturb
- Enhanced voicemail
- Faxing capabilities
- Find me/Follow me
- Music on hold
- Remote office
- Unlimited local calling
- Virtual numbers
To learn more about each of these features, check out our VoIP Call Features article.
A business phone service needs to have quality service and high reliability. The best way to find out how satisfied the customers are with a company's service and service stability is to research reviews. You can read business VoIP service provider reviews before making your final choice.