Is a Hosted PBX really that much better then an On-Premise PBX?

Published Dec 18, 2018

The common answer to this question is yes, a Hosted PBX typically will have more features and have significant cost savings too. Since the advent of IP voice, traditional phone systems have become outdated. You can now scale through licensing in both On-Premise and Hosted PBX's. However, some manufacturers offer software subscription for On-Premise solutions now too. This allows the phone system to have the latest software release upgrades and remain up to date and secure.

Many traditional On-Premise PBX systems that are capable of using SIP or VoIP, require expensive hardware or license upgrades to work with IP Voice. Where as a Hosted PBX is designed to work with only IP Voice options, making it a much more cost effective option.

What is their service quality and why is it important?

When you are talking about VoIP technology, the most important factor you should consider is the quality of the service. Most of the Hosted provider offers "Bring Your Own Bandwidth" solution. As a result, most Hosted Providers can configure your system to connect your remote offices and main office alike. This action can be achieved through public internet connections or over private links where applicable, to transport the voice traffic. If you are using public internet service, you are likely to need to configure some form of QoS {Quality of Service} to improve the priority of your VoIP traffic.

QoS enables the data network to priories voice traffic over your network and to improve the quality of that transmission over the regular data packets. In short, allows the Voice to be sent in the fastest method for the best quality of audio. The result of not implementing QoS may lead to an interruption of Voice traffic, causing dropped packets and leading to poor call quality. Moreover, it can result in pack loss and jitter. That is why, whether you use Hosted or On-Premise phone system, is important to setup and configure your phone system correctly.

Here are the top factors that should be considered before making your decision;

  • Determine your budget
  • Determine what issues that are acceptable to your business
  • Where is the appropriate place to make your investment for your phone system?
  • Phone provider service levels and support
  • Compare both hosted and on-premise solutions for functionality
  • Embrace the technology and use the supplied features to improve business efficiency
  • Work with your service provider to select the right solution for your business.


It is highly essential when you want to decide on any technology investment to know who your service partner will be. You should work with a service partner you are confident with. There are many providers available, but find the one that works for you. A Hosted PBX more times then not tends to be the modern businesses best choice for a new business Phone System.