PBX, which stands for Private Branch Exchange, is a telephony technology that has existed for a long time. It refers to a private telephone network used within an organization where users can communicate both internally (within the firm) and externally (with the rest of the outside world).  The nature of traditional PBXs called for hefty investments and entailed regular maintenance, as well as training. Time and technology advancements, nonetheless, have brought about changes to the telephony landscape, notably the IP-based hosted PBX.


Unlike former PBX technologies, hosted PBX is cloud-based and is accessed via an IP network, offering reliable phone services to an organization. By cloud-based, this technology enables users to access telephony services and resources on-demand via the internet. Hosted PBX is considered a better technology as it does not involve privately managed call controllers or servers. Instead, like other cloud-based technologies, hosted PBX is managed off-site. For this reason, no infrastructure costs in terms of installations are incurred.

The underlying factor for hosted PBX is the internet. An organization, first, identifies a trusted VoIP service provider, usually an internet/cloud service or telecommunications provider, who builds and hosts the PBX hardware for the organization. In place of the traditional individual phone extensions, the organization is provided with VoIP desk phones that are connected to the hosted PBX via IP-based networks.

How Does Hosted PBX Work?

The functionality is quite straightforward, as well. Once you make a call from your VoIP device, the hosted PBX phone system routes that call via the internet to the service provider. The service provider then converts the digital packets into a format that matches the destination format and delivers the call to the recipient. All that happens very fast, so fast that there is no noticeable delay. It is worth noting that with hosted PBX, the users get to enjoy all crucial telephony features such as voicemail, web voicemail, conference calling, call logs, fax to email, call transfer, automated greetings, call auditing, and so on.

The diagram below illustrates how a hosted PBX system works.  



Hosted PBX Benefits

There are quite a few benefits that can be linked to using hosted PBXs. First, there is the obvious one, which is the fact that it saves on costs, as there is no need for investing in an in-house PBX system. The VoIP provider handles all forms of upgrades and maintenance, which equally saves a firm from suffering extra costs. The other feature that makes hosted PBXs way better than their predecessor is their unparalleled flexibility. The user can manage their phone systems using a user-friendly control panel and make changes to the call settings swiftly. They do that by first accessing an online voice portal using a browser, making the necessary settings adjustments, and saving those changes.  

Moreover, hosted PBXs increase scalability on account of cloud communications. With them, it is quite easy to add new features as they roll out. A firm can, for instance, add more lines, add more phones, or even add a whole new department at will, and with much ease; something that would have been significantly complex and costly with the traditional on-site PBXs. This is what makes them more suitable for small businesses that are growing, as they can scale easily without incurring more costs on infrastructure.

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