What is Hosted PBX?

David Bosley
David Bosley
April 21, 2016

We don’t know if you’ve noticed but the old telephone system that entailed attaching telephone wires to telephone poles across the world, then in turn wiring those to every phone in the world, is well, dead.

This same principal applied to your office phones as well. These are all being replaced by VoIP (Voice over Internet Protocol) – in other words, the internet.

That’s a mouthful, right? This leads us to PBX. So, what is it?

PBX is a Private Branch Exchange. This is an internal, private phone network used by a business or organization. The users (employees) of the PBX share a number of outside lines that is far fewer than the traditional model. This is because, for most companies, the need for a phone line to every employee in the company is unnecessary. It’s extremely rare that every employee in the organization will be using the phone at the same time, unless you are a call center.

Hosted PBX Solutions

In a PBX, traditional phone lines are replaced by VoIP internet technology.

So, what is a Hosted PBX and is there such a thing as an un-hosted PBX?

The functions of a hosted PBX (call routing, switching) are handled at locations owned and operated by the PBX provider. This company is then responsible for managing all of the PBX equipment, including updates.

The major difference between a PBX and one that is hosted is ownership and maintenance of the computer hardware and software.

So, what’s in it for a business or organization to choose a Hosted PBX over a PBX that they own and maintain?

The benefits of this includes not having to dedicate space in your office to housing the equipment, as well as not having to upkeep and service it. This saves a ton on payroll. There are many other advantages, as outlined in our article on Cloud PBX.

Hosted PBX and a Traditional Phone Systems

The traditional phone system is limited. You are limited by the number of phone lines that you have coming into your business. In the traditional system model (using analog lines,) if you have three incoming lines, the maximum number of calls that you can handle at one time is three. This includes both incoming and outgoing.

In using VoIP (Voice over Internet Protocol) technology, you are not limited by “lines” of any kind. You cannot handle an infinite number of calls, but the capacity is far greater than with traditional phone lines. The limitation is in what the overall system you set up can handle. The single biggest advantage to a hosted PBX is cost. They are cheaper to set up and cheaper to use and maintain.

This leads us at last to the lesson of the day. If you want to look smart to your bosses, simply suggest they replace their antiquated phone system with a Hosted PBX with VoIP!

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