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What’s the Difference Between Hosted PBX and a Regular Business Phone System?


Until recently, almost every business used traditional Private Branch Exchange (PBX) phone systems. PBX systems rely on telephone hardware and switches to route calls. That hardware must be stored on site, and it requires ongoing maintenance.

The trend these days is toward hosted PBX, also known as business VoIP or cloud-based telephony. With these systems, calls are made through the Internet via an offsite data center. A third-party VoIP provider handles all of the maintenance and support.

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  • Cost - Hosted PBX is less expensive to install and maintain. The system might cost anywhere from $3,000 to 15,000 to install in an office of 20 to 30, while traditional PBX could run $500 to $2,000 per user. Maintenance is the responsibility of the provider, not your in-house IT staff.
  • Installation - Hosted PBX systems are installed much faster and easier. In some cases, the systems are “plug and play,” meaning you can set them up yourself.
  • Ease of use - You get all of the same features and capabilities with hosted PBX, but the phone systems are more user-friendly and intuitive. Often, you can add users or enable a certain feature without IT support. Hosted PBX systems can also connect users across multiple locations as if they were in the same building. For example, calls can be routed or transferred to cell phones or home offices.

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