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Hosted VoIP Business Phone System

What is a Hosted Business Phone System?

Since VoIP (Voice over Internet Protocol) phone systems have adopted advanced technologies and traditional landline phones are quickly becoming outdated, Hosted VoIP Phone Systems have begun to make real waves in the business world. Since they have become parallel (or better) in quality to traditional phone systems, and add tons of high-tech communication features, more and more businesses are enticed by the opportunity to “go digital” and save money at the same time. If you’re still using an “old school” business phone system like a landline phone, it’s a good idea to look why VoIP systems are some of the best business phone systems!

A Hosted PBX Phone System is a business phone system that uses a new-and-improved version of an On-Premise Private Branch Exchange (PBX) system, so employees can communicate both internally and externally. PBX systems were designed so that companies can enjoy the utility of having one integrated “business line” with connections to individual extensions for each employee. With a hosted PBX rather than a traditional PBX, a business can conveniently route calls using the Internet network they already have and use. Businesses can also cut down on hardware necessities this way – both in terms of the space they need to designate to a physical server, and the cost of hardware per employee. With a Hosted VoIP system, the business can easily scale the phone system to fit their particular business (and scale up later if they need to). Additionally, employees can choose what kind of hardware they prefer to take calls with – whether its a desktop phone, personal mobile phone, laptop computer, etc.

What’s the Difference Between a Cloud-Based PBX System and a Hosted PBX System?

It can be a bit tricky to understand the difference between Hosted and Cloud-Based PBX Systems, especially since they’re both forms of VoIP and they operate similarly. In terms of hardware, the main difference is that hosted systems typically require a physical server – scaled to fit the particular business – to operate. This can be located either at the business location directly (also referred to as “hosting” or “on-premise” PBX system) or off-site (“hosted PBX”) at the provider’s location. Once the server is set up, employees can enjoy the benefits of Internet-routed calls and equipment-free work environments (the server can be connected to from wherever, generally). At the same time, because the server is hosted and scaled to fit the particular business, the telecom features, storage, and usage patterns are consistent and uniform across the company.

Alternatively, businesses who use a Cloud System only require Internet connection – no physical server. That means a server does not need to be scaled to a specific size prior to getting started – employees are simply paying “as they go” to use the network provider’s server. So users have more control over the individual scale and features, and they can be customized depending on that employee’s particular needs. In other words, each employee can have their own phone usage and features – they do not have to follow the company-wide “plan” the business set up with the provider. However, since the cloud system also does not pre-determine usage and storage patterns prior to getting started, this can also be seen as a downside for some businesses.

All in all, while the cloud system is very flexible and can provide customized changes as the business’s telecom needs change, a hosted system is a good choice for businesses that want consistent company-wide communication at a lower price, with the added flexibility of using their already-existing Internet connection.

What’s the Difference Between Hosting On-Site and Hosting Off-Site?

Hosting on-site basically means your business chooses to take responsibility of housing the hardware and technical control over the phone system. For this option, your business would have to have the equipment and software to host the server – oftentimes, this means purchasing it upfront at the time you want the service to start, so it can be a costly start-up expense. However, from then on, your company will have ownership and control over the way you want to utilize the phone system. You’re able to scale the system to fit your business whenever you need to, and you can handle technical issues in-house rather than waiting for the provider’s technical team to get to it when they can.

Sometimes, you might see “Hosted PBX System” referring to to both “hosting on-site and “off-site.” But they’re actually slightly different, and it’s important to know the difference!

Hosting off-site, on the other hand, means you’re choosing a business phone provider to host your server. They take care of the equipment and hardware required to host the server, and your business connects with it via Internet connection. The convenient part here is that instead of covering the expensive costs of purchasing the server and equipment to get started, you simply pay the provider a small, affordable “start up” cost (much smaller compared to a traditional landline phone service) and then pay ongoing monthly subscription fees moving forward. Your subscription with the provider usually covers maintenance and tech support and basic telecom features, then you can add on features and scale up from there.

What are the Pros and Cons of a Hosted Business Phone System?

Since there are so many different types of business phone systems to choose from these days, it’s important to weigh the pros and cons of a hosted system before deciding it’s the right option for your business.


  • Flexibility with hardware: whether you choose to post the VoIP system on-site or off-site, you can pick and choose which hardware your team prefers to work with to make and receive calls. Since a hosted system is Internet-based, you can route calls through your personal mobile device, desktop phone, desktop or laptop computer, tablet, or whatever you prefer! 
  • Cost savings: This is probably the biggest advantage to hosted systems! Compared to a traditional phone system, businesses who use a hosted VoIP system save about 50-75% on operational business costs and phone bills, without sacrificing quality or features whatsoever. In terms of a hosted PBX system, your start up cost is significantly cheaper than start up costs for a traditional phone service.
  • Mobility: while hosted systems aren’t necessarily intended to be completely mobile in nature compared to cloud-based VoIP systems, luckily you do have the option to “go mobile” if you have on-the-go workdays, you’re working remotely, or traveling. Most VoIP systems have mobile apps and other mobile options you can log into remotely, so you don’t have to worry about missing calls to your business line when you’re away.
  • Digital communication features: There’s probably not another business phone system that offers more advanced digital tech features than a hosted system! Hosted systems offer anything and everything from call rerouting, auto attendants, voicemail to email, SMS and video messaging, and more. Or if you prefer to keep it uncomplicated, you can simply enjoy the benefits of a 5G network, which is 100x faster than traditional landlines and 4G networks. PLUS, you can streamline all your work communication in one convenient place, instead of having to turn to multiple platforms to access your messages. 


  • Depends on Internet bandwidth: Because hosted systems depend on Internet connectivity to operate, you will experience the best results when using a server with strong bandwidth. If your business is located in a rural area with poor Internet signal, or your business experiences shotty signal from time to time, you may experience inconsistent voice quality when using your phone system.
  • Must secure tech support: Whether you decide to host your VoIP system on-site or use a service provider who hosts the system off-site, you will want to secure a tech support option in case anything were to go wrong. As you know, Internet signals can “go down” from time to time, and hosted systems typically come with many features that may require intermittent maintenance. If you choose to host on-site, you want to be sure you have an IT team that can step in and help if need be. If you choose to have a provider host off-site, remember that you will need to use the provider’s tech support from time to time.
  • Requires electricity: Whereas traditional phone lines don’t necessarily depend on a power supply to operate (as long as the server location has power), you will need electricity for your hosted VoIP system to work. This means that if the power goes out – whether your server is on-site or off-site – your phone line will go down as well.

Which Features Can be Added with a Hosted Phone System?

As mentioned, hosted VoIP systems are appealing to so many businesses because of the wide variety of digital communication features they offer. These features can be very inexpensively added to your subscription plan, and help streamline and manage your business communications more efficiently. When considering hosted VoIP systems for your company, these are the top digital features to consider adding:

  • Conferencing and video conferencing: hosted VoIP allows you to easily conference multiple lines at a time and/or use a video conferencing option to communicate with multiple people at once.
  • Voicemail to email transcription: Conveniently, your phone system can transcribe your voicemail messages and forward them to your email inbox, so you can access them easily and respond promptly. Especially if you’re away from your desk (if you’ve chosen to connect your VoIP number to a desktop phone), this feature can let you stay in the loop and get back to co-workers and clients quickly.
  • Auto attendant: If you work in a busy or call-heavy environment and can’t always help direct calls to the correct department, the VoIP auto attendant can help save time by directing calls to the right place automatically. 
  • Unified messaging: In addition to video and voicemail to email options, many hosted VoIP systems have mobile or desktop-friendly apps, where you can streamline all your messages and access work essentials like your CRM, Live Chat/SMS messaging, analytics, email, etc.
  • Call forwarding and “Find Me, Follow Me”: Many hosted VoIP systems include an option to forward calls to connected devices of your choice. All you have to do is connect your VoIP number to the devices you would like to access your work calls, and the calls are forwarded depending on the settings you select.
  • Call recording/business analytics: This feature allows you to record important phone calls and access metrics involving your communications, so you and your team can learn about your communication patterns and how to improve operations moving forward.

Which Types of Business Would Benefit the Most from a Hosted System?

Hosted business phone systems stand out as an advantageous option for many businesses right off the bat, but it’s important to make sure it’s the best fit for your company before making the move! Mainly, once you’ve read through the pros and cons of using an Internet-based VoIP service, you’ll want to decide whether a Hosted system or a Cloud-Based System is the best fit.

Here are the types of businesses that are most likely to benefit from a hosted VoIP phone system:

  • Small businesses planning on growing, hiring more employees, or moving locations in the known future. Since hosted VoIP systems are extremely easy and inexpensive to upgrade and scale,  if you’re working in a start-up or a business that’s growing quickly, you might consider this phone system to maximize your revenue. 
  • Businesses that want to maximize the value of their communication through tech-savvy digital features. Hosted VoIP systems are by far the best way to upgrade the quality of business communications, since you have dozens of advanced tech features to add and you can streamline your communications in one convenient place. Across the board, your company will operate more uniformly, effectively, and quickly.
  • Businesses that work mostly in-office, but many need out-of-office flexibility. Compared to cloud-based VoIP systems, hosted PBX systems operate most efficiently when employees are most working in-office as a team. Since hosted systems work with a physical server, they’re typically scaled to fit the business’s particular needs and its telecom features, storage, and usage patterns are consistent and uniform across the company. You can still utilize the server and use your business line away from the office when need be, but if you’re doing work entirely remotely, a cloud-based system would be a better fit.

Ready to look at your options? We work with the top VoIP suppliers that can talk to you more about your options and give you free quotes so you can find the best business phone system for your business. Get started here – we’re excited to help you improve your business communications!

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