Hosted PBX – are the days of onsite phone systems numbered?

The first thing to say about this is that we are looking at phone systems appropriate for use within the SME market, specifically the low to mid-sized SME’s. Traditionally when a company needs a phone system and they have more than 5-10 users and are not in a managed office they would purchase a physical phone system which would be installed in their offices by a specialist support company. They would then have the phone system for a number of years and pay for the maintenance through their PBX supplier.

If their requirements changed or they outgrew the system capacity they would have to upgrade to a larger more expensive model. Some new systems were IP based and had the option of utilising VOIP as well as linking into your IT systems though older systems were unlikely to have this functionality.

The concept of a hosted PBX has been around for some time but was traditionally considered not appropriate for anything other than very small companies or those with limited requirements and expectations. Reliability and call quality were major concerns when comparing against traditional phone systems.

Like a lot of Cloud Based (by which we mean hosted in a data centre somewhere) Systems the reliability and quality has come on massively in the last few years and so it is now a very viable option to consider moving to a Hosted PBX. The below sets out some of the areas for consideration.

Flexible/Mobile working

These days the emphasis among many companies particularly within the SME sector is on flexible and mobile working. IT departments or IT Support Companies are being required to come up with ever more easy and effective ways for employees to work remotely. Often smaller SME’s are getting rid of their offices completely and moving to a distributed virtual office environment.

Traditional physical onsite PBX’s do often have the ability to patch in remote workers but this can be difficult to set up, will have limits on the number of remote connections you can have and can be costly to implement. Obviously where you no longer have an office you no longer have the option of a physical phone system. With a hosted PBX employees can be supplied with preconfigured phones which can be connected to most internet connections and used as you would if you were in the office. There is no additional cost other than for an additional supported handset and the user will have the same level of functionality as all your other users. This enables you also to monitor and report on call traffic and maintain a single bill.

Disaster Recovery Strategy

SME’s are becoming increasingly aware of the need to have an integrated and documented DR strategy and one that actually works. Your IT Support Company if they are doing their job properly should be able to help you with the IT side of your infrastructure including things like offsite backup and replicated systems. The move to hosted cloud applications such as Hosted Exchange have also helped massively with a company’s DR readiness.

Hosted PBX systems offer a very strong and persuasive argument over and above traditional phone systems in that if you have any issues with your office you can simply take some phones and connect them at an alternative site or at home and remain in touch with your customers and your employees via the same numbers and with no loss of functionality. You also have the ability to divert calls to mobiles and can run an app on most major phone operating systems to connect into the hosted PBX from there.

Capital and Opex costs

When looking at the costs of your phone system it is important to take into account the total cost of ownership and not just ongoing costs. If you have an existing phone system that is fully depreciated but still works well then you may not be able to justify switching away until you need more capacity or functionality that you can’t get or your support costs increase as the system gets older.

If you need to upgrade for whatever reason then this is where the economics of a Hosted PBX start to come into their own. Traditional onsite phone systems are still comparatively very expensive and are also expensive to set up. Ongoing costs for maintenance and ISDN lines can also be costly. Outside of the need for specific handsets the upfront costs for Hosted PBX are small in comparison as are the project implementation costs. You effectively pay nothing for the system and just move to a monthly per handset model. The ongoing costs compare favorably with the monthly support costs for a PBX and ISDN charges. You are restricted to paying for calls through your Hosted PBX supplier but these are generally very reasonable and call costs have come down so much over the years that any savings that could be made by using an alternative supplier if you have the option are minimal.

But there must be a downside?

As with everything there has to be a downside and with Hosted PBX there are a few things that you should be aware of before taking the plunge.

  1. System stability – you are relying on the Hosted PBX supplier to have robust and resilient systems to ensure you do not suffer system outages. No system is 100% so you should expect there to be a risk of an occasional outage. These should be minimal though and you should ensure you get a good SLA from your supplier for peace of mind. With this onsite wins but even with onsite the system can still go wrong.
  2. Call quality – because you are effectively making the first part of your call at least on VOIP (effectively on the internet) you run the risk of poorer call quality than on ISDN lines. You may also at first notice a less “rich” sound quality but generally, as long as you have good and reliable connectivity in place which is separated from your general internet traffic you should be fine. Again onsite wins as call quality will be better but its marginal and VOIP is improving all the time as faster more high quality internet becomes more widely available.
  3. Loss of connection – if you lose the internet connection that links you to the Hosted PBX then you have no phone system. While this is a risk there are ways to mitigate against this such as multiple lines and having backup mobile handsets configured ready to go. Onsite wins but the risks are relatively minimal and acceptable to most people.


While it may be premature to say that the end of smaller onsite PBX installations are imminent, it is certainly not fanciful to say that it is possible to see a time when that could happen. The SME market can often be slow to adopt and embrace changes such as this but the arguments for going with hosted PBX from a reputable and well established supplier such as VoxHub are becoming more persuasive.

While it may not be right for everyone right now it is absolutely the right thing to consider if and when you are looking at your telecom systems requirements.  For more information on this solution please feel free to contact our team.


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