Advantages and Disadvantages of a Hosted Private Branch Exchange

Updated October 6, 2023

In-house business phone systems, also known as PBX or unified communications as a service, can be costly to staff, manage, and maintain. Traditional PBX systems also lack the flexibility and scalability many businesses need to meet their goals. As an alternative, remote-operated, cloud-based, hosted PBX systems have emerged. These systems carry signals digitally, over voice over internet protocol devices rather than a landline. Considering all this, there are distinct advantages and disadvantages of hosted PBX systems.

PBX Hosting Explained

Exactly what is hosted PBX? It is a third-party vendor supplying private telephone networks for organizations and businesses that allows calls to be made over the internet. All of the features and services as traditional, on-site PBX systems, but the technology is maintained off-site. Because UCaaS uses the cloud, installation and maintenance are minimized, and no in-house hardware is needed.

Benefits of UCaaS

Some of the advantages of UCaaS include top-notch security, advanced features, and cost-efficiency. Because signals are transmitted over the internet and using the cloud, the hosting vendor is responsible for providing enhanced security, whereas, in a traditional PBX, the landline security resides with the business and can be more vulnerable to attack.

Some features are more sought after than others, including auto attendants, intelligent call forwarding, and voice to email transcription. Many of these features come built into devices used for PBX hosting. Many hosting providers allow companies to use existing VoIP devices or offer rentals when connecting to their service, and because there is no need to pay for software, firmware updates, or security patches, there can be substantial cost savings for companies.

Drawbacks to Hosted Business Phone Systems

Whenever a primary business system undergoes a change, including from a traditional PBX to one that is hosted, it can impact workflows and established habits. This can be seen as a disadvantage because the users may need additional training and guidance to adjust. Network settings may also need to be adjusted, which can be a time-consuming process and hosted PBX is reliant on high-speed internet and adequate bandwidth.

Understanding what PBX hosting is, as well as the positive and negative aspects of the service, can aid in the decision-making process for companies looking to upgrade from traditional systems. Most technology comes with advantages and disadvantages, and UCaaS systems are no different. Businesses have individual needs as well as specific goals, making the choice of a business phone system integral to its development.

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