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PBX is the abbreviation of Private Branch Exchange. A PBX is a phone system that is used within a business or organization to make internal calls (employee to employee) as well as external calls (employee to outside callers).

A Private Branch Exchange phone service typically includes voice mail, call transfers and auto attendants, which replaced telephone switch attendants or operators. A PBX provided a much more efficient way to make call connections and handle increased call volume.

Today, PBX services are commonplace over traditional phone lines. The latest and most advanced version of a PBX utilizes the Internet.

Hosted, IP or cloud-based PBX services have become more efficient and increasingly popular for businesses to manage phone calls.

Before we get into frequently asked questions about hosted PBX systems, let’s answer two up front about standard PBXs.

A traditional PBX setup consists of on premise hardware, such as cabinets. A PBX enables individuals within an organization to make internal and external phone calls.

To make external calls, a PBX provides phone lines that connect employees with the Public Switch Telephony Network (PSTN).

Today, many organizations opt for cloud based or hosted PBX services. These require an Internet connection with adequate bandwidth or MPLS to prioritize voice traffic, when required.

The basic function of a hosted PBX is the same as a traditional on-premise PBX. A major difference is an external phone or voice service provider will “host” and manage the PBX for end users. Hosted PBXs or cloud PBX systems are commonly hosted in data centers.

Instead of routing calls through on-premise hardware, voice data is sent using the Internet to the hosted PBX.

A hosted Private Branch Exchange (PBX), also commonly known as a cloud-based PBX, is a private telephone service that enables organizations to make internal and external calls and connections via the Internet.

A hosted PBX offers access to a variety of different calling and communication features. Some of these features may include;

  • Call routing
  • Auto attendants
  • Call forwarding and parking
  • Call to e-mail or text transcriptions
  • Call groups and conference calling
  • Call intercept
  • CRM integration
  • Hunt groups
  • Softphones
  • Mobile app integrations
  • Presence
  • ….and many more

The aim of modern features associated with a cloud or hosted PBX, is to create a streamlined and efficient phone service. This applies to users both internal and external users of the phone system.

A hosted PBX is managed and maintained by a voice or Internet Service Provider. This means there is no requirement for costly equipment installation. Maintenance and management of this type of phone system is all taken care of by the offsite service provider who hosts the PBX.

Like a traditional PBX, a hosted PBX connects callers and phone numbers internally and externally for an organization. Instead of these connections occurring over traditional phone lines, they are made via the Internet and IP based phones with a hosted system.

A cloud or hosted PBX eliminates the need for expensive and bulky on-site hardware. Management, servicing, maintenance and updates are included by the service provider, which ‘hosts’ the PBX system offsite.

Unlike traditional on-premise PBX services, a hosted phone system allows users to accept and make calls from a variety of devices.

If a user’s device is connected to the internet and has the required application or software, a user can ‘mimic’ or maintain their office phone system presence from anywhere.

The major differences between a hosted PBX and a traditional PBX phone service are;

  • A hosted PBX operates utilizing Internet service.
  • There are no onsite hardware requirements for a hosted PBX.

Due to the above, a hosted system can provide significant cost savings.

Reductions in phone service costs with a hosted or cloud PBX are due to a variety of factors including;

  • No large initial costs to purchase physical PBX equipment.
  • Elimination of need for on-site PBX installation.
  • Less space requirements (room to house physical hardware).
  • No specialist management or on-site technicians for PBX maintenance.
  • Often free calls due to the use of the Internet to make connections.

A hosted or cloud PBX does require compatible handsets such as IP phones or devices, such as soft phones or mobile apps. These are required to make calls using this Internet based service.

As a hosted PBX operates over the internet, management of the phone service is more efficient. Tasks such as scaling the service to add new users is simple. This makes a hosted PBX ideal for businesses or organizations who anticipate growth or large seasonable fluctuations in phone users.

A hosted PBX provides phone users with a cost-effective, feature-rich business phone solution. A few reasons how this type of system provides benefit;

  • A hosted business phone system negates the need for costly on-site equipment.
  • No lengthy installation, management or maintenance time required by staff.
  • IT or technical personnel can focus on larger projects, instead of maintaining or troubleshooting a phone system.
  • Online portals and free phone apps make it easy to customize and access phone service from any Internet connected device.
  • Many cloud-based PBXs offer extensive features that can improve business communications. A hosted PBX can make communications easy and efficient.
  • Access to enterprise level calling features, can be at more affordable costs than traditional services.
  • A hosted PBX service ensures redundancy. Multiple servers can provide phone service in the case of an emergency. This minimizes the risk of relying on a single piece of hardware or equipment.

See Top 10 Benefits of Cloud Phone Systems to find out more.

Most hosted or cloud-based PBX services provide users with basic or customizable features. Some features are included with basic service fees for each user, ‘seat’ or phone line. Other features are not – extra costs can be added to base service pricing for these.

A hosted PBX offers businesses of all sizes a flexible, reliable, and feature-rich business phone solution. Whether a startup looking for a business phone service that can grow and adapt to changing needs, or a Fortune 500 company looking to service a call center or large sales department, a hosted PBX can meet requirements.

For many organizations, a hosted PBX is an excellent solution to business phone service needs. However, there are some potential downfalls that are associated with this internet-based service.

Businesses that have a poor internet connection or frequent internet outages may experience outages or service or voice quality degradation. It is important to consider current internet capabilities before making a switch.

Hosted PBX services are typically more affordable then traditional PBXs. The exact cost varies based on the provider.

Costs are often applied on a per user, line or ‘seat’ basis. Additional fees may be applied for setup, support or extra features such voicemail, CRM integration, auto attendants, etc.

Each provider is different. The best way to answer that question is to contact the provider in question.

Many hosted PBX services allow for the use of hardware (an IP phone for example) or a softphone. A softphone such as Bria for the iPhone or X-Lite 5 for desktops is software that provides a phone interface. Once configured, users can make / receive phone calls using a keyboard, mouse, or cell touchpad.

Yes – cell phones are compatible with this type of phone system. Many hosted or cloud PBXs allow users to access their business phone system anytime, anywhere.

Many providers offer free smartphone apps allowing a user to make / receive calls from a mobile device, even when away from their desk or office.

These apps allow phone service users to maintain business call presence anywhere. This feature is popular with large mobile or remote workforces. Or, for users who frequently travel.

For a hosted or cloud-based PBX service, or VoIP to function well, a reliable Internet service connection and appropriate IP-capable phones are required.

Bandwidth requirements vary based on a variety of factors. These include the number of users and other requirements.

You can contact us to determine your bandwidth needs.

A hosted PBX allows for the instant addition (or removal) of users as needed. As business requirements change, a hosted phone service can efficiently adapt.

With a hosted or cloud-based PBX, sending or receiving a fax is simple. This can take place via a traditional fax machine or online.

A hosted PBX service allows for seamless integration across your organizational network, so faxes can quickly be stored or saved.

For traditional PBX services, a localized power outage can interrupt communications until power is restored. However, as long a device is connected to the internet, calls can be made and received via a cloud or hosted PBX.

One of the reasons so many businesses choose to go with a hosted PBX is because of the limited equipment requirements, compared to a traditional PBX system.

A standard, traditional PBX requires a significant amount of on-premise equipment. A cloud or hosted PBX requires handsets or devices and a reliable Internet service connection.

The Public Switched Telephony Network (PSTN) is the network of landline telephones that provides analog connections (basically, the traditional telephone system).

For a significant period, PSTN was the only telephone system available for phone calls. However, modern technology and the Internet has paved the way for alternatives, including mobile apps and Voice over Internet Protocol (VoIP) service.

As mobile and IP solutions like VoIP increase in popularity and affordability, more and more businesses are choosing to use hosted PBX or cloud PBX solutions for their phone service requirements.

However, they still need access to the PSTN. PSTN calling is a functionality that connects a hosted PBX user with the external telephony network.

Should you decide to migrate your phone service to a hosted PBX, you can keep your existing phone numbers in most instances. Many voice providers offer seamless porting of your numbers to their managed voice network.

A hosted PBX service is often cloud-based. It is not on-premise hardware, so it can meet the communication needs of multiple business locations.

Virtual offices with different phone numbers can be efficiently setup for local branch offices or even international locations.

This makes it easy to create a unified experience for both employees and customers, regardless of how many business locations you have.

As on off-premise service, management of a hosted PBX largely falls on the service provider. This negates the need for lengthy training of in-house IT staff.

Hosted phone system providers do a significant amount of the work and are responsible for ensuring a functional hosted PBX system. Additional customizations or user management needs can typically be met via an online portal by end users.

Online portals provide users with easy and intuitive access to their phone own system. Here is a video demo of an online user portal.

Yes. In today’s global economy, international calling capabilities are a must. A hosted PBX provides this service. Businesses that make a lot of international calls may find a hosted or cloud PBX reduces international call billing considerably.

It is very standard today for most PBX service providers to offer free local calls. This is often accompanied with have competitive pricing on long distance calls. Rates as low as $0.02 per min for calls to Asia, $0.01 per mute for calls to Europe and $0.03 per minute to South America are common.

For companies with multiple departments, or those that don’t have a receptionist on staff, an auto attendant can help direct and transfer calls to the appropriate departments or individuals. This makes it easy to properly funnel calls, creating a smoother experience for both customers and employees.

Call routing systems, also known as Automatic Call Distributors (ACD), allow businesses to route traffic based on a variety of different qualifiers. These qualifiers can include;

  • Time of day
  • Current call volume
  • Requested department
  • Preferred language of the caller

When utilizing call routing through a hosted PBX, businesses can take control and channel calls. Variables like employee departments, business hours and network strain during hours of high call volume can be factored in.

VoIP stands for Voice over Internet Protocol. It is a phone service that operates over the Internet, as opposed to traditional phone lines. VoIP is common today via services such as Skype or apps like FaceTime or WhatsApp calling.

For business phone service, many companies choose VoIP due to cost savings. Like with a hosted PBX, calls over the Internet can often be made for free, unlike via traditional phone lines.

VoIP service can also offer enterprise-level functionality without the cost of traditional services.