What is Hosted PBX？
A Hosted PBX (also known as a cloud-hosted PBX, hosted IP PBX, or hosted pbx phone system) is a cloud-based business phone system where your provider manages all hardware, software, and telephony infrastructure in off-site data centers.
Unlike traditional on-premises PBX systems that require physical hardware at your office and ongoing IT support, a hosted PBX solution lets you run your phone system over the internet without any complex installation or hardware upkeep.
Hosted PBX system offers powerful communication features like call routing, call queues, contact center tools, and CRM integration — all accessible through a simple web or mobile interface.
With no hardware to maintain or upgrade, businesses can scale easily by adding or removing users in minutes. Costs are predictable, too, with monthly subscriptions replacing large upfront investments. Because of these advantages , hosted PBX solution is ideal for:
- Remote teams need reliable, anywhere-access communication
- Growing SMBs avoiding large IT overhead
- Organizations demand high uptime with 99.9% SLA guarantees
With hosted PBX, managing your phone system is simple and flexible. You control calls, voicemails, and routing rules from your browser or smartphone. It’s a future-ready solution that unifies your communications without being tied to physical systems.
*If you consider a hosted PBX phone system for your business, our detailed guide will provide you with everything you need to know to get started.
Table of Contents
- How Does Hosted PBX Work? A 3-Step Breakdown
- The Difference Between Hosted PBX & Other Phone Systems
- The Advantages of Hosted PBX System
- Should You Switch to the Hosted Phone System?
- How To Choose the Right Hosted PBX Provider?
- Why Yeastar hosted PBX system is a no-brainer choice
How Does Hosted PBX Work? A 3-Step Breakdown
To keep it simple, there are three basic components to a virtual PBX: the hosted PBX provider, a VOIP phone, and the Internet. Here’s a clearer look at how it works—from setup to everyday use.
Core Components at Play
A hosted PBX solution relies on three essential elements:
- Hosted Phone System Provider: Operates and maintains the phone system infrastructure in secure, redundant data centers.
- Internet Connection: Transmits voice data using VoIP or SIP
- Endpoint Devices: IP phones, desktop softphones, or mobile apps that allow users to make and receive calls.
Once everything is set up, your devices stay connected to the provider’s cloud servers. This constant connection enables real-time communication. And thanks to built-in redundancy, if one data center goes down, traffic is automatically routed through backup systems—keeping your service up and running with over 99.9% uptime.
When you make a call using a hosted PBX service
- Your IP phone system or app encodes your voice into data packets and sends them through the Internet.
- The hosted VoIP PBX provider processes these packets through cloud-based servers, applying routing rules such as call queues, ring groups, or extension dialing.
- The recipient’s device receives the data, decodes it, and plays the audio in real time.
You control the entire phone system from an online portal
- Add or remove users instantly
- Customize business hours, voicemail greetings, call flows, and more with just a few clicks.
- Monitor real-time call performance, usage, and team activity
All maintenance, updates, and security are handled by the provider in the background. You simply log in to the web portal to make changes or manage your communications—all in just a few clicks.
The Difference Between Hosted PBX & Other Phone Systems
To better understand the value of cloud–based hosted phone system, it helps to compare it with other types of phone systems—particularly in terms of infrastructure, management, and typical use cases.
Hosted PBX vs. VoIP (Voice over Internet Protocol) System
VoIP (Voice over Internet Protocol) is the underlying technology that enables phone calls over the internet. Hosted IP PBX, on the other hand, is a complete business communication system built on top of VoIP—offering enterprise-grade features, scalability, and cloud-based management.
While VoIP alone may suit individuals or small setups managing their own hardware, Hosted PBX provides a fully managed, scalable solution ideal for growing businesses that want more than just connectivity—it’s about having a full-featured, future-ready phone system without the IT hassle.
Hosted PBX vs. On-premise PBX System
An on-premise PBX is physically installed and maintained at your office, requiring high upfront investment, ongoing IT support, and limited remote access. Scaling or upgrading often involves hardware changes and downtime.
Hosted PBX lives in the cloud, giving you lower operational costs, instant scalability, and seamless remote access—no hardware, no complexity.
Hosted PBX vs. Traditional Analog PBX System
Traditional PBX systems, also called TDM PBX, rely on physical phone lines and offer only basic functions like call hold or transfer. They require expensive hardware, manual maintenance, and provide limited flexibility for today’s fast-changing business needs.
These legacy systems are difficult to scale, don’t support remote work effectively, and lack integrations with modern tools like AI, CRM, or cloud services. In contrast, Hosted PBX system is designed for flexibility, digital transformation, and sustainable growth—without the technical headaches.
Many businesses still using analog systems may hesitate to change or feel unsure about the upgrade. But as technology evolves, moving to an IP-based hosted PBX is no longer optional — it’s essential for staying competitive. Analog systems are gradually becoming a thing of the past.
*Download our upgrade kit now to get step-by-step guidance and resources that make migrating to hosted pbx solution easy and worry-free.
*Here’s a quick side-by-side look at Cloud Hosted PBX, On-Premises PBX, and Traditional Analog PBX, so you can easily compare what they are, where they fit best, and what each does well.
The Advantages of Hosted PBX System
Hosted PBX solution stands out as a modern solution that simplifies deployment, minimizes IT involvement, and enables unmatched flexibility for today’s hybrid and distributed workplaces. Compared to traditional on-premises and analog phone systems, hosted PBX on the cloud requires no bulky hardware, reduces setup time from weeks to hours, and provides centralized, browser-based management for effortless configuration and scaling.
Some of the main benefits of Hosted PBX include:
- The ability to quickly scale up or down depending on demand
- On-demand Access to toll-free and local phone numbers
- Improved capability in dealing with inbound call spike
- Removes the extra costs such as setup, maintenance, and upgrades associated with a traditional PBX
- New features are added, and existing features are upgraded without additional costs
- Increased security and reliability
- Advanced infrastructure with dedicated servers ensures business continuity with no downtime.
Should You Switch to the Hosted Phone System?
Compared to traditional analog PBX systems, adopting a hosted phone system offers numerous benefits for modern business communications. However, not every company needs to make this transition. To help you determine if a virtual PBX system is the right choice for your business, consider breaking it down into these more manageable questions:
- What are your current communication needs? Assess whether your existing system meets your needs or if you require more advanced features like call routing, voicemail to email, or integration with other business tools.
- How important is mobility and remote work for your team? If your team works remotely or travels frequently, a hosted PBX can provide seamless communication through mobile and desktop applications, ensuring connectivity anywhere.
- How scalable is your current system? Consider if your current system can easily scale with your business growth. Hosted PBX systems typically offer more flexibility for adding or removing lines as needed.
- Do you need integration with other business systems? Determine if integration with CRM systems, help desk software, or other business tools is important for your operations. Hosted PBX systems often offer these integrations to streamline workflows.
- How much IT support do you have available? Consider the level of IT support your business can provide. Hosted PBX systems often come with provider support, reducing the need for in-house technical expertise.
By answering these questions, you can gain a clearer understanding of whether a hosted PBX system aligns with your business needs and goals.
How To Choose the Right Hosted PBX Provider?
Check the Supported Features
The core functionality of the cloud hosted phone system is paramount. Assess whether the provider offers essential features such as call forwarding, auto-attendant, call recording, and more. These are fundamental for modern business operations, enhancing efficiency and communication. Additionally, consider advanced features like voicemail-to-email, mobile integration, CRM integration, and call center analytics. These features can significantly streamline workflows and improve customer service.
Ensurie Reliability & Uptime
Reliability is crucial for any business communication system. Examine the provider’s Service Level Agreements (SLAs) to understand their uptime guarantees. A minimum of 99.99% uptime is typically expected to ensure high availability. Furthermore, investigate the hosted PBX provider’s redundancy measures, such as having multiple data centers. This can prevent downtime and ensure business continuity in case of a failure.
Adapt to Grow with Your Business
As your business grows, your communication needs will evolve. Choose a provider that offers flexible scalability, allowing you to easily add or remove lines and features as needed. This ensures that your PBX system can adapt to changing business requirements without significant disruptions or costs.
Check the Security
Security is a major concern, especially if your business handles sensitive information. Ensure the provider uses robust encryption and security measures to protect your communications. Additionally, verify that the provider complies with relevant regulations and industry standards, such as GDPR, HIPAA, or PCI-DSS, to ensure data protection and compliance.
Customer Support
Quality customer support can make a significant difference in your communication experience with a cloud hosted PBX provider. Ensure the provider offers 24/7 support and has multiple support channels, such as phone, email, chat, and an online knowledge base. Prompt and effective support can help resolve issues quickly and minimize downtime.
Pore Over The Cost
Understand the provider’s pricing structure, including setup fees, monthly fees, and any additional charges for extra features or usage. Compare the cost with the features and benefits offered to ensure you’re getting good value for your investment. It’s important to consider both the short-term and long-term costs to avoid unexpected expenses.
Use Free Trials or Demos Where Available
A free trial or demo period is an excellent opportunity to evaluate the pbx system hosted on the cloud. Use this period to test the system’s usability, reliability, and performance. This hands-on experience can help you make a more informed decision and ensure the system meets your expectations.
By carefully evaluating these factors, you can choose a hosted PBX provider that aligns with your business requirements and ensures a smooth, efficient communication experience. This thorough approach will help you find a provider that not only meets your current needs but also supports your future growth and operational goals.
Hosted By Yeastar — A No-brainer Choice
Yeastar also offers a ready-to-go solution for service providers who want to avoid the server upkeep and get started immediately. Host your voice services over Yeastarmanaged cloud infrastructure featuring enterprise-grade reliability and security. Easily create and manage multiple PBX systems, each operating independently of the others. It also lowers your upfront investments and initial risks.
With Yeastar, MSPs and IT resellers get:
- A unified system for voice, video, meeting, and team messaging
- Android and iOS apps, Web/Windows/Mac clients
- Call center solution and web-based operator panel
- Support for popular devices, including Yealink, Fanvil, Snom, etc.
- The ability to bring your SIP trunks for service bundling. Read More
This Post Has 2 Comments
Good day
May I please have a quote for the following scenario;
One number – 0800 xxx xxx or 0810 xxx xxx or 086 xxx xxxx
When a client phones that number an IRV answers and asks: “Please press 1 for Newcastle, Please press 2 for Vryheid”
If possible I’ll even set that up myself.
4x extentions for that number
Must be able to make a call from an extension while on a call on another extension.
Are the Cloud/Hosted PBX self managed?
If you manage the Cloud/Hosted PBX, what is the price difference?
Thank you
Kind regards,
Zander Potgieter
081 506 9916
Hi Zander, thank you for your enquiry, our sales will contact you asap.