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Why Hosted PBX Is Right For Your Business Telecommunication Needs

As you are most likely well aware, telecommunications is essential to the success of any business. Using the right telecommunication system enables you to communicate effectively with your internal employees as well as your external customers. Therefore, it is important to take time to assess and select the telecommunication system that is suited for your business; failure to do so may adversely impact your business.


At the heart of any telecommunication network is the Private Branch Exchange, otherwise known as PBX. The PBX serves to connect internal telephones within a business to each other; it also serves to connect internal phones to external clients. It functions as a switchboard to ensure that voice calls are routed effectively and appropriately to their intended recipients.

You have one of two choices when deciding which PBX network to use for your business; these are the traditional PBX and the hosted PBX. The discussion below provides more information about the two kinds of PBX and why you should use the hosted PBX for your business telecommunications.

Traditional PBX

The main feature of a traditional PBX is that it is sited locally on your business premises; you have complete control over its location. You are fully responsible for the initial setup, management, and maintenance of the traditional PBX. Voice calls made from your business are routed to the traditional PBX from where they go to the Public Switched Telephone Network (PTSN) through telephone lines operated and controlled by telephone companies. From the PTSN, the voice calls are then routed to their final destination.

Hosted PBX

In contrast to the traditional PBX, the hosted PBX is typically located at a site other than your business premises; they are usually hosted in the cloud. A third-party Internet Telephony Service Provider (ITSP) is responsible for the initial setup, management, and maintenance of the hosted PBX. Voice calls are made across the internet; internet phones and good internet connectivity are therefore essential before a hosted PBX can be set up. The hosted PBX acts as a virtual server containing the IP addresses of internet phones. Voice calls made are routed to the hosted PBX and then to their intended destination.

Why Hosted PBX is Right for You

There are several reasons why you should choose hosted PBX over traditional PBX when setting up a telecommunication system for your business:

  • Cost: The total cost of ownership (TCO) is much less for a hosted PBX than a traditional PBX system. With a traditional PBX, you bear all the equipment, installation, and maintenance costs; this can significantly increase your capital and operational expenses. With a hosted PBX, however, these costs are assumed by the ITSP; all you have to do is pay a regular fee to the ITSP for these tasks. In addition, calls rates are significantly lower when made across the internet rather than across telephone lines; this can reduce your monthly phone bill.
  • Flexibility: With hosted PBX, your employees can make or receive calls from anywhere as long as there is internet connectivity; this is beneficial if they have to work remotely away from the business site. In contrast, traditional PBX is geographically restricted to predefined and pre-approved locations.
  • Redundancy: Using a hosted PBX builds some redundancy into your telecommunication system; since it is cloud-based, there is no single point of failure that could result in the disruption of your business communications. The traditional PBX has a single point of failure which can lead to a communication disruption after events such as natural disasters.
  • Scalability: Hosted PBX can be easily scaled to meet the needs of your business. If you have multiple business locations, hosted PBX can be easily expanded to ensure that they are all connected. The traditional PBX has limits on how much it can expand to meet the needs of a growing business.

The Bottom Line

With NewCloud Networks, getting started with hosted PBX has never been easier. In business since 1988, we have the knowledge and skills necessary to get your business set up with hosted PBX. Contact us today so that we can get started.

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About the author
Sydney Boman

Sydney Boman is the Marketing Assistant at NewCloud Networks

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