Differences between Hosted and Non-Hosted VoIP PBX Solutions

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Communication technologies are undergoing contiguous change from the last few decades. Hosted PBX technology is one among them which offers more facilities than the traditional PBX systems.

Hosted PBX and the non-hosted VoIP PBX solutions have a lot of differences even though both rely upon the VoIP technology. The PBX systems and services based on the VoIP (Voice over IP) technology can be used in your business in two ways; either as a hosted service from the VoIP provider or as non-hosted PBX service from the VoIP provider. Both have merits and limitations, hence before choosing a VoIP PBX solution for your business, you need to know the major differences between them.

Hosted IP PBX Solutions

The Hosted VoIP PBX system, as the name implies provided as a hosted service from the VoIP service provider. Hence the expensive PBX hardware, equipment and all other essential technologies will be handled and managed by the VoIP service provider at their own site. It frees up the user from purchasing expensive equipment and managing them at his office or home. It is also referred to Hosted VoIP or Hosted PBX or Virtual PBX systems.

With the VoIP PBX systems that are hosted, the only equipment required by the user are IP phones and the router. The user only need to plug his IP phones into the routers while the calls, signals, connections and all other features are handled by the suppliers in-house IP PBX servers. For these services, the VoIP provider charges reasonable monthly fees for the users.

Most of the hosted VoIP providers deliver both the IP-PBX functionality as well as the diverse Unified Communication (UC) services. The hosted VoIP providers give services to multiple customers through shared hardware to gain both capital & operational cost benefits. The IP switch in the network of the VoIP providers will control and support all sorts of voice calls either station to station or outside calls.

The Hosted VoIP PBX systems and services are enriched with lots of advanced features and advantages. The major features and benefits of them include the following;

  • Hosted VoIP reduces the initial equipment cost and lowers the set up cost. This is achieved because the user need not have to purchase and set up the expensive PBX hardware at his site.
  • It cuts down the maintenance and operation costs.
  • It only incurs reasonable monthly charges and service fees.
  • Hosted VoIP PBX systems offer enhanced features for businesses at affordable costs.
  • It supports the dynamic expansion of businesses and business communications. The Hosted IP PBX systems can be easily scaled up or down based on the business requirements.
  • Upgraded software and trendy features are part of it.
  • It offers more secured and flexible infrastructure for business communications.
  • Users are completely freed up from the overheads concerned with the management and maintenance of the PBX hardware at their offices or homes.
  • Since PBX is hosted, it helps to save the space and power of the company and also the time and work of employees.

Non-Hosted VoIP PBX Solutions 


The non-hosted IP PBX system is also known as the Premise –based IP PBX systems. The configuration and architecture of the non-hosted IP-PBX systems are more or less similar to the traditional PBX systems. They consist of a lot of hardware or equipment placed in the office or the premise that makes it possible for the phone system to work. In this system, the calls will either transmit via a PSTN (Public Switched Telephone Network) or via VoIP along with SIP trunking or can be a blend of both. The IP PBX can be purchased from a telecommunications hardware company. Gateway cards are normally used to connect your IP PBX system with your supplier. These suppliers will manage your calls usually.

The premise based IP PBX systems also possess some benefits but they are overruled by their limitations. The short-comings of non-hosted VoIP systems include;

  • You need an expert person to manage and maintain your IP PBX system.
  • It incurs high costs which include the PBX purchase costs, maintenance costs, staff training costs, cost of power required to operate the PBX hardware, etc.
  • It is very hard and complex to expand.
  • Well trained technicians are required for software upgrades and patches, and also this increase the business expenditure.

In short, both the hosted IP PBX systems and the non-hosted VoIP PBX systems have benefits and limitations. But the features and benefits of hosted VoIP PBX solutions are more compared with the traditional IP PBX systems. This gives the hosted IP PBX systems more popularity and wide acceptance.


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