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Hosted PBX Versus Premise-based PBX

Hosted PBX Versus Premise-based PBX

Hosted PBX(also called an HBPX) is a cloud-based service. The equipment required for running the system is located at the service provider’s location. A service provider bills clients monthly for a phone system. In a premise-based PBX, the equipment of the entire IP (or digital) phone system is located at the client’s site.

Hardware And Updates

A hosted PBX, while cloud-based, will still require clients to obtain IP phones and a QoS device. Clients who choose a premised-based PBX will have to purchase a PBX system as well as the desk phones.

A premise-based system will need to be installed. On the other hand, Hosted PBX does not demand heavy installation as the phones are the only pieces of hardware being set up on the network.

As technology rapidly changes, updates are required for Hosted and premiseWorking Hard-4.jpg-based systems. The difference is with an HPBX is that it’s managed by the service provider and, therefore, it’s the service provider’s responsibility to maintain software updates and upgrades. Premised-based PBX maintenance is the responsibility of the owner. Some level of training is typically provided in both scenarios, but premise-based training may or may not be included in the price of purchase and system installation.

Expansion & Maintenance

As your business grows, your phone system needs to grow too. In the case of the conventional (premise-based) PBX system, you will have to purchase additional hardware, programming, and (possibly) wiring. You will also require technicians certified to work with that system. Upgrading your system may also prove to be time-consuming, often demanding that the necessary work be performed after standard business hours.

Hosted PBX provides a good deal more flexibility with regard to moves, adds, and changes to the system. In most cases, a simple addition can be handled same day by the service provider. IP phones can be programmed, shipped, and simply plugged in.

Traditional PBX systems age over time and, like all hardware, will need to be replaced at some point. Additionally, you’re at the mercy and schedule of the installation company should a maintenance issue arise that you can’t handle internally. Issues with HPBX would be handled similar to how you’d handle an issue with your internet service. After making a call, an engineer will be ready to open a ticket and work to get your problem solved. Most of the time, the problem can be handled remotely.  Since most service providers employ and train their own technicians, you’re typically less vulnerable than you would be owning an older premise-based system for which support may be hard to come by or no longer exist.


A Hosted PBX allows you to work from nearly anywhere with an internet connection. Connecting to your office’s network is a cinch, whether you’re using your cell phone, tablet, laptop or have an IP phone installed at home.  It only takes a few minutes to make a personal device act like an IP phone.  Once you connect your phone to the internet, it will look for your service provider’s server and request a  quick login you could have your phone connect with the server.  This simple process ensures it’s never too difficult to work when you’re home or travelling when you have Hosted PBX.  Unfortunately, you won’t be able to enjoy the same flexibility with a premise-based PBX.  Nevertheless, if you get in touch with the company from who sold you the PBX system, you can request a special mobility upgrade.  It’s worth noting that, it will be an separate and additional cost.

Essentially, a Hosted PBX offers you more mobility and flexibility.  It is also more cost effective and requires fewer internal resources compared to a premised-based PBX if you don’t have the in-house staff to maintain and service it.

Learn more about hosted PBX solutions and other internet options with our free Business Internet Buyer’s Guide. Click the image below to download now!