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What is a Hosted PBX Phone System and is it Right for My Business?

January 6th, 2023 | 4 min. read

By Jordan Pioth

Man in grey suit talking on phone

If you are looking for a new phone service, you may be overwhelmed by all of the options on the market.

If you do not carefully research each phone service on the market and consider all options, you may end up wasting money on the wrong phone service.

Coeo knows how important the right phone service is to an organization and wants to provide you with information on a hosted PBX phone system so you can determine if it is the right fit for your organization.

By the end of this article, you will know what a hosted PBX phone service is, how it works, and if your company should consider a switch to a hosted PBX phone service.

What is a hosted PBX phone system?

A Hosted PBX phone system, also known as cloud PBX, is a cloud-based phone system that is managed by your service provider. Because it’s managed by a service provider, the phone system is hosted on their servers.

Your service provider manages and maintains the system, unlike an on-premise system that requires your company to manage and incur costs for things like maintenance, hardware, and staffing expenses.

Because a hosted PBX phone system is cloud-based, all phone lines and phone calls take place entirely over the internet. This results in less hardware needed; cutting down on extra costs for things like equipment and labor for installation.

Having a cloud-based phone system also allows your employees to work remotely with the ability to connect their business phone from anywhere.

How a hosted PBX phone system works

With the shifting of your phones and communication to a managed service provider, each current phone your business has is replaced with a VoIP desk phone.

Hosted PBX phone systems allow your phones to use the existing data network of your managed service provider.

All services and updates are managed and maintained by your managed service provider. PBX features such as call routing, call recording, and video conferencing are provided as part of the solution.

Calls are securely delivered over the same network that your computer uses. Phone calls travel over IP networks to the cloud PBX and then to data centers. Finally, servers route calls to the Publicly Switched Telephone Network (PSTN).

While your hosted PBX phone service is managed and maintained by a service provider, your company will still have the ability to personalize your service.

Most service providers have an online voice portal customers can access to allow them to change how their calls are handled and other advanced calling features.

Why your organization should or shouldn’t consider a hosted PBX phone service

Not every service is a good fit for every organization. Some services work well for some organizations but not well with others.

Reasons why your organization should consider a hosted PBX phone service

Companies with, or expecting, high growth, remote employees, and limited IT resources are excellent candidates for a hosted PBX phone service.

●      Expected company growth

If your company is growing rapidly, it can be hard to continue adding traditional phone lines consistently. With hosted PBX, you can easily add multiple phones as your company grows and adds more employees who need phones.

Since hosted PBX is cloud-based, the phones are connected through the internet. This makes it easier to add phones because there are no phone lines and only minimal equipment that needs to be installed for each phone added.

●      Remote employees

With hosted PBX, you can take your phones anywhere and they can still be connected through the internet. If your company has remote workers, they can use their phones outside of the office in almost any environment.

●      Understaffed or limited IT team

If your IT team is challenged with many business tasks, it can be hard to delegate enough resources to manage a hosted PBX phone service.

Additionally, if you need a new phone service but do not have an IT team or any IT expertise on staff, you may not be able to manage your phone service on your own.

With hosted PBX, your phone service is managed by your service provider. This helps organizations that do not have an IT team or who have a small team prioritizing other business tasks.

Reasons why your organization should not consider a hosted PBX phone service

If your employees can’t get a reliable internet connection or all employees work on-site, your organization may not be a good fit for a hosted PBX phone service.

●      Poor internet connection

Hosted PBX is cloud-based and allows you to make calls over the internet. If you have a poor internet connection, your phone service will not perform well causing your employees to be less productive.

Testing your internet connection is important before purchasing any kind of cloud-based phone service.

Making sure your internet connection is reliable before purchasing hosted PBX or any other phone service that connects to the internet is important.

●      All employees work on-site

If your employees work on-site and never work remotely, there is less of a need for cloud-based phone service.

This does not mean that your company won’t receive any of the benefits this solution provides, there's just less of a need to transfer your phone service to the cloud if all employees work on-site and you have no remote workers.

Next steps to purchasing a hosted PBX phone service

Now you know what a hosted PBX phone system is, how it works, and why your organization may or may not be a good fit for the service.

This will help you determine if a hosted PBX phone service is best for your company so that you can make a better buying decision.

Finding the right phone service for your organization requires thought and analysis but is highly important.

If you choose a phone service without doing the proper research, you could end up wasting money on a phone service that is not appropriate for your company.

Coeo has delivered thousands of hosted PBX phone services. We know how important it is for your company to make the best buying decision when it comes to purchasing a phone service that best fits your company.

If you would like to speak with our team to learn more about PBX phone systems or ask any questions you may have you can schedule an appointment. TALK TO AN EXPERT

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Jordan Pioth

When he's not creating content for Coeo, Jordan loves to watch sports, hang out with friends and family, and anything sneaker-related.