Hosted IP PBX Overview

By Neil Zawacki
Updated: March 28, 2011

Hosted IP PBX is a special type of web service that lets companies make phone calls over a data network. The system is highly scalable in its implementation, and you don’t need to purchase a PBX or have phone lines in place for the service to work – the hardware is fully owned and operated by a hosting company.

Hosted IP PBX is compatible with most computers and tends to work with broadband, local area networks, and WAN connections. All you have to do is plug the IP phone into your modem or router, and you will gain access to the hosted phone network. You can also use a wireless router as long as you connect each of the phones with a standard Ethernet cable.

This type of phone system is generally considered to dependable since it tends to not have a single point of failure. The hosting company will usually have redundant servers and databases set up at a centralized location so an unexpected hardware failure won’t bring the phone system down. You also don’t have to perform maintenance on the equipment since the hosting company automatically does that for you.

Another notable benefit of hosted IP PBX is the special features that are available for businesses. You can have voice mail, extension dialing, caller identification, and a ‘find me’ feature that lets you call multiple phone numbers at once. Other common options include conference calls between five or more people and a password protection system for added security.

These features aren’t limited to a specific location. If you have employees who work from home or travel on a regular basis, they will still be able to transfer phone calls and put customers on hold. This mobile versatility also applies to companies that have branches in different cities.

Hosted IP PBX also tends to be highly flexible in the number of extensions that a business can possess. Most hosting companies allow you to have an unlimited number of users who can be added or removed at any time. Some hosting companies charge on a ‘per user’ basis, but this still tends to be cheaper than a traditional PBX.

Furthermore, hosted IP PBX has softphone capabilities which let you use your computer as a telephone. As long as you have a headset or microphone and a good set of speakers, you should be able to make and receive phone calls through the system. This can help to save money during the initial setup phase since you won’t necessarily have to purchase IP phones for every employee.

Overall, hosted IP PBX provides a cost effective solution for companies who want a business-class phone service. The system requires little to no infrastructure, tends to be highly reliable, and grants access to phone features that might otherwise be out of reach of small businesses.

Featured Research
  • The New SMB Phone Systems Comparison Guide

    Does your small or medium-size business need a new phone system? Then you're in luck! Our new, updated comparison guide helps you cut through superfluous information and narrow down your list of solution providers. Get the latest data on phone system features, pricing, and performance metrics in an easy-to-use format. more

  • How UC Can Help Your Business Survive the Holidays

    The holiday season is filled with frenzy and excitement for businesses and consumers alike. Consumers prepare gift lists, compare brands and prices, and begin shopping with a vigor that is not present most other times of the year. For many businesses, the holiday season accounts for a large profit bump at the end of each year, and companies strive to exceed their goals and keep customers happy during this rush late in the year. more

  • [Infographic] Switching Phone Systems

    There are a lot of possible reasons you might want to switch to a new phone system. The old one might cost too much or be too troublesome to operate and maintain. It might not be flexible enough. It might not be reliable enough. Or it just might not have the kinds of features and capabilities that you need in today’s competitive business climate. more

  • Business VoIP on a Budget

    Voice over Internet Protocol (VoIP) phone systems represent the next innovation of telephone connection and communication by making it possible to conduct calls over a broadband internet connection, rather than an analog phone line. more

  • [Infographic] The Advantages of Unified Communications

    Did you know that according to 8x8, the tangible ROI of a unified communications solution for a 10,000-person enterprise is approximately $15.5 million? This isn't the only way unified communications can improve your business. more