Hosted Vs. Non-Hosted PBX Systems: What’s the Difference?

At some point while setting up your business phone system installation, you’ll be given the choice between hosted and non-hosted PBX (private branch exchange) systems. Nebula Solutions differentiates between the two and discusses how you can choose which one is best for your business.

Hosted Vs. Non-Hosted PBX Systems

You may already be familiar with non-hosted PBX systems, also referred to as premises-based or in-house PBX. This type of PBX system has all the switching hardware and wiring located within the business premises. A dedicated space or closet, typically shared with the server computers, is operated and maintained by on-site (or on-call) staff. 

Hosted PBX systems use VoIP (voice over internet protocol) technology as its main communications backbone. All calls are converted into digital signals and transmitted over the internet. The switching and routing functions are done through a virtual switchboard.

Which One Is Best for Your Business?

Each business phone system installation offers unique advantages. Non-hosted systems are typically more affordable, can be easily serviced by on-site staff and are compatible with older hardware, including analog phones. Keep in mind, however, that there may be limitations on provisioning new phones, as these will require a physical connection. If your company has a fixed number of employees and can spare a closet or room for the hardware, then a non-hosted system may be best.

Hosted PBX systems, on the other hand, delegate switching function “in the cloud”. Their greatest advantage is their flexibility. Provisioning for new employees can be done by software, and the system has a wider selection of compatible phones. Hosted PBX systems also allow telecommuting; as long as the employee has a fast and stable internet connection, they can work virtually anywhere.

Virtual switchboards also mean you don’t have to worry about hardware care and maintenance. It should be noted that hosted systems work best with a high-bandwidth internet connection. If your business is looking into expanding its number of employees within a short amount of time, then a hosted system may be best for you.

Contact Nebula Solutions for Your Business Communications Needs

Nebula Solutions is a leading provider of business phone system installation services. Give us a call at (888) 257-0955 or fill out our contact form.