Advantages of Hosted IP PBX Phone Systems

By Charron Conley
Updated: January 31, 2011

When looking for a phone system it won’t take long to notice that there are an overwhelming amount of options. Smaller businesses are often looking for an affordable solution that will provide many of the features that larger companies use. Hosted PBX services are provided from the premises of the service provider, so the small business can now enjoy numerous benefits without installing all the hardware or software typically needed with a new phone system.

What is Hosted PBX

To understand a Hosted PBX, one must first understand the basic elements of traditional PBX-Private Branch eXchange. This is a privately owned telephone switching system for handling multiple telephone lines without having to pay the phone company to lease each line separately. With a Hosted PBX or VoIP system, your company will be provided with a special router or switch that attaches to the network and is then connected to the external world. The router or switch communicates directly with the hosting service that provides the Hosted PBX. A Hosted PBX system is an IP phone system. Most of the hardware is hosted by a service provider on a monthly or annual basis, so that all connection to or from your website or sites go via the service provider.

Companies will already have the majority of what is needed to use a Hosted PBX service: a high speed Internet connection such as DSL, cable/broadband, or T1 and a router. The supplementary equipment needed are compatible phones that support industry standard SIP This give the hosted PBX option a major advantage over other choices because since most of the equipment is already there business have lower entry cost, support costs, and are easier to manage.


Besides saving money on initial setup, there are many features advantages available with hosted PBX. Popular features include Find-Me-Follow-Me technology, Outlook integration, extension dialing, call forwarding, and music on hold. The Follow-Me feature allows calls to be easily forwarded to cell phones or other alternate locations. This allows for the possibility of a completely virtual office and reducing office overhead expenses. Also, many of these systems also have an auto-attendant which allows calls to be directed during business both and off-business hours.

Phone Numbers and Area Codes

Another advantage to Hosted PBX is to choosing any particular area code that is desired. Service providers allow you to decide on any area code for your number that is not your geographical area code. This can allow for long distance calls to appear local, thus saving thousands of dollars on long distance calling. All together your calls will be more cost-effective. Since all the voice traffic is transferred over the IP, it greatly cuts down calling charges. Furthermore, calls between extensions are usually free.


Finally, as your company grows, a Hosted PBX can grow with you. Any number of extensions can be added or removed without affecting the overall phone system. If your enterprise grows from 10 employees to 200 employees the Hosted PBX systems have the potential to meet those growing needs. You are able to do this simply by adding to your system without purchasing expensive new equipment or an entire new system all together.

The key advantage of having a Hosted PBX system is that you can save the major part of your monthly phone bill while enjoying a number of advanced phone system features. This can system can typically be run by one employee. There is also usually a support call center from your provider to help as well. There is no need of expert staff to monitor and upgrade the PBX system. Thus Hosted IP PBX systems are truly hassle-free and affordable.

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