What is a Hosted Phone System & How Does it Work?

If you are considering investing in a new phone system for your organisation, you must have come across the phrase “hosted phone system”. The terms “hosted” and “cloud” have for a while now attracted the attention of large and small businesses. Tech media as well loves the concept and enjoys analysing its benefits and application. But, most business owners and leaders are still left with the question; what is a hosted phone system and how can it benefit my organisation?

In this article, we will go into a little more detail on what a hosted phone system is, how it works and how it can benefit your organisation.

What is a Hosted Phone System?

A hosted phone system, also referred to as hosted telephony or hosted PBX, is an internet-based phone system that is not based at your organisation’s premises. The servers and applications of the hosted phone system are based at a data centre or in the cloud rather than at your place of business.

Most people confuse a hosted phone system with a VoIP phone system but there are significant differences in these systems. VoIP, Voice over Internet Protocol, is a type of phone that uses an internet connection as opposed to the traditional PSTN (Public Switched Telephone Network) to deliver phone traffic. As you know, most phones are now IP phones – be it for business or personal use. However, using an IP phone does not mean that your call traffic is being carried over the internet or that you have a hosted phone system. It just means that your phone can use an internet connection to send and receive calls.

In simpler terms, not all IP systems are hosted, but, all currently available hosted or cloud systems are IP.

How Does a Hosted Phone System Work?

In today’s modern hosted system, a hosted phone system typically resides in the cloud. Cloud in this context means servers and switches that are located at a secure data centre off-premises. To connect to this phone system, you need to be a subscriber which comes with a monthly fee. To setup, all you need is to plug in the provided desk-phones and you are set to go. They are designed to connect automatically back to the brains of the system – the servers and switches at the data centre.

Much like every other cloud service or computerised system, it is the “brains” of the system that needs regular maintenance and updates. Of course, the maintenance and updates are done by the hosting company meaning you are saved from the worries of dealing with upkeep, repairs and updates. You can, therefore, focus on your core business and redirect time and resources to increase productivity.

With that said, not all hosted phone systems are the same. There are;

  • True cloud-based phone systems
  • Hosted phone systems – also called hosted hybrid systems or hybrid.

A true cloud system is one that comes with certain pre-set features targeted at small businesses and provided entirely via the internet. It is designed to allow small businesses to enjoy a selection of Unified Communications features you get from a premise-based enterprise phone system. The key downsides are that it is reliant on the strength of your internet connection and of course the low flexibility offered by the limited features.

A hosted hybrid phone system though similar to a cloud solution, is based at an off-site location or data centre. It essentially is a premise-based system set up to be hosted off-premise and handled by the provider or hosting company. This setup provides more flexibility and the ability to take advantage of full features of having your own hosted system specifically designed for your needs but maintained by the provider or hosting company. On top of that, you can choose the features, applications and integrations that your business needs at any given time.

Benefits of Using a Hosted Phone System

Greater Flexibility

It gives your team the ability to work from anywhere. You also get to choose and use the features applications and integrations that you need.

Lower Costs

Probably the main benefit is that there are no upfront equipment costs and no ongoing maintenance and repair costs. You can, therefore, enjoy a great communication system at a fraction of its value. A hosted phone system also absolves you from the cost of downtime and an unreliable phone system which is critically important in some organisations.

Embrace Unified Communication

Your team can take advantage of the many features and applications to achieve quick, easy and efficient internal and external communication.

A hosted phone system is a great idea for every organisation moving into the future. However, as cliché, as it might sound, it all depends on your needs. There are many things to consider and it is worth talking to an expert to determine what makes sense for your business, systems, goals, practices, operations and overall cost of ownership. Contact AdEPT today to kick-start this discussion so you can make an informed decision, or read more on our voice services.

Written by Sami Malik

Marketing Campaigns Manager