Intro to Hosted PBX

By Catherine Hensley
Updated: February 02, 2011

When choosing a telephone system for your business, it’s important to consider the many varied options available for today’s communication needs. Any basic system consists of telephone lines usable from many different telephones, in addition to more advanced features like “switchboard” technology. PBX is a type of telephone exchange akin to the days when operators answered incoming calls and “switched” or directed those calls to their proper destinations. A single “private branch exchange” (or PBX) system services one specific business or office setting, as opposed to a centralized hub or telephone company operator system.


When you dial an office with a PBX system, you will reach their central (or main) line and then have the option of dialing an individual’s “extension” number (or, in other words, a “branch” from the main line ending with that particular line). A “hosted PBX” system is not housed in a business or office. Instead, it is usually located off site at the hosted PBX company’s location. This basic fact regarding hosted PBX systems is one of its many advantages. With a hosted PBX system, a business does not have to buy and maintain the equipment itself. An organization will simply sign a contract with a service provider to use the hosted PBX system’s services.


Today, hosted PBX systems offer users a number of practical and useful features for enhancing their business telecommunications operations, in addition to the standard options available with basic PBX systems located on the premises of a particular business. For example, a company that has multiple locations geographically can have one phone number to represent the entire company. A call to such a centralized line will then be routed to the appropriate extension based on a dialer’s input following a series of prompts. This hosted-PBX feature also enables the possibility of telecommuting for a company’s employees. With such a system, the necessity of even having a physical office is diminished.

Additional features available with hosted PBX include centralized billing and access to the network through a variety of systems. An organization can opt for individualized rate plans that track certain incoming business-related calls at reduced charges, and business calls made on private lines can be tallied and recorded for inclusion in the company’s main bill. Additionally, employees have the option of accessing their company’s hosted PBX telephone system through programs like VoIP and even cellular phones. With this feature, one extension number can ring in more than one specific location. There is a lot to consider when selecting a business telephone system, but the advantages of hosted PBX make it one to seriously consider.

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