Moving to a hosted PBX can simplify how your business manages calls, connects employees, and supports multiple locations. But choosing the right solution involves more than comparing features and monthly costs. You also need to consider existing equipment, network reliability, and how calls will be handled when something goes wrong.
A hosted PBX runs your business phone system on infrastructure managed by a service provider. Employees make and receive calls using compatible desk phones or apps, while the provider operates the platform behind extensions, voicemail, call queues, and routing.
Before comparing providers, find out what happens when your internet connection fails, which existing phones are compatible, and who will configure the system before your numbers transfer. These requirements will help you decide whether fully hosted calling fits every location or whether certain sites would benefit from a hybrid or on-premises alternative.
What Is a Hosted PBX System?
A private branch exchange (PBX) manages a business’s incoming, outgoing, and internal calls. The PBX connects extensions, routes incoming calls, plays greetings, and sends unanswered calls to voicemail.
With a hosted PBX, a service provider operates the phone system off-site. Employees connect over the internet using compatible IP phones, desktop software, or mobile apps. An administrator manages users, schedules, and routing through a web portal.
Hosted PBX and VoIP describe different parts of the setup. Voice over Internet Protocol, or VoIP, carries voice over IP networks. A hosted PBX supplies the business phone system that uses VoIP. A hosted PBX typically uses VoIP to deliver business calling services. Modern on-premises phone systems can use VoIP, too.
Providers may bundle hosted calling with messaging, video meetings, and other tools under a unified communications as a service, or UCaaS, plan.
Hosted vs On-Premises PBX: What’s the Difference?
People often use “traditional PBX” and “on-premises PBX” interchangeably, but the terms describe different systems. A traditional PBX usually means legacy analog or digital equipment installed in your building and connected through copper telephone lines.
On-premises PBX is the broader term for any PBX that runs at your site. A modern on-premises system can use VoIP and support IP phones, mobile apps, and SIP trunks. A traditional PBX is an on-premises system, but an on-premises PBX does not have to use traditional technology.
When comparing hosted PBX vs. traditional PBX, consider who will maintain the system, how employees will connect, and what equipment you need to keep. Include a modern on-premises PBX in the comparison if your business needs local control or specialized integrations.
| Hosted PBX | On-Premises PBX | Traditional Analog PBX |
| Where it runs: In the provider’s data center. | Where it runs: On a server or appliance in your building. | Where it runs: On dedicated telephone equipment in your building. |
| Who maintains it: The provider maintains the hosted platform; your team manages local devices and networking. | Who maintains it: Your IT team or service partner maintains the PBX. | Who maintains it: A telecom technician or service partner maintains the equipment and wiring. |
| Cost model: Recurring subscription, usually per user, plus equipment and any additional services. | Cost model: Hardware, licensing, maintenance, and carrier service. | Cost model: Equipment, installation, maintenance, and telephone-line rental. |
| Setup time: Depends on network readiness, configuration, phone provisioning, and number porting. | Setup time: Requires local installation and configuration, plus carrier setup or number porting. | Setup time: Requires compatible equipment, wiring, telephone circuits, and technician scheduling. |
| Scalability: Administrators add users within the provider’s plan limits and available network capacity. | Scalability: Administrators add licenses and may need to expand server or trunk capacity. | Scalability: Technicians may need to add physical ports, expansion cards, or telephone lines. |
| Remote/multi-site: Employees connect through apps or compatible phones over the internet. | Remote/multi-site: Employees can connect remotely when the system and network are configured to support access. | Remote/multi-site: Businesses generally need call forwarding, additional equipment, or separate systems. |
| Control and customization: Administrators use the settings and integrations the provider supports. | Control and customization: Your team has greater control over configuration, integrations, and upgrade timing. | Control and customization: Technicians work within the equipment’s supported features and programming options. |
| Reliability model: The provider manages platform redundancy; your business needs working power, connectivity, and configured fallback routing. | Reliability model: Your team or partner arranges backup power, hardware redundancy, and alternative carrier connections. | Reliability model: Calling depends on the PBX, local power arrangements, and telephone circuits. |
| Security responsibility: The provider secures the hosted platform; your business manages accounts, permissions, devices, and local networking. | Security responsibility: Your team or partner handles patches, access controls, network protection, and toll-fraud prevention. | Security responsibility: Your team or partner protects physical equipment, remote administration, voicemail access, and outbound dialing. |
| Legacy device support: Fax machines, paging equipment, and other analog devices may need supported adapters or separate services. | Legacy device support: Compatible gateways and interfaces can connect analog equipment. | Legacy device support: Compatible analog devices can connect through the system’s existing interfaces; verify each device and use case. |
Key Features of a Hosted PBX System
Compare hosted PBX features against your actual call flows. A provider may include an auto attendant in the proposed plan but limit the queues, reporting options, or integrations available to your team.
Getting Every Caller to the Right Person
- Auto attendant: Plays a greeting and directs callers to departments or extensions through menu selections.
- Interactive voice response, or IVR: Collects keypad or spoken responses and can connect callers to more detailed workflows, such as account lookup.
- Call routing and forwarding: Sends calls to designated users, groups, or external numbers based on schedules and other rules.
- Call queues: Holds callers until an eligible employee becomes available, with configurable announcements and overflow destinations.
- Paging: Sends announcements to compatible phones, speakers, or paging adapters.
An auto attendant and an IVR can perform different jobs, so ask the provider to demonstrate your intended menu. Confirm how many menus and queues the proposed plan allows, and test paging with your existing speakers.
Voicemail, Fax, and Extensions for Staff on the Move
- Voicemail to email: Delivers voicemail notifications or audio attachments to an inbox. Transcription converts the recording into text.
- Desktop and mobile apps: Let employees make and receive business calls through a computer or smartphone.
- Virtual extensions: Provide remote employees with a business extension without requiring a physical desk phone.
- Fax by email: Sends and receives fax documents through an email-based service.
- Business texting: Lets employees exchange supported SMS or MMS messages using business numbers.
Check whether the provider charges extra for voicemail transcription. For business messaging over US local ten-digit numbers, complete the provider’s required 10DLC brand and campaign registration before launch. Providers use a separate verification process for toll-free texting.
Meetings, Call Recording, and Reporting for Managers
- Conference calls and video meetings: Bring multiple participants into audio or video sessions, subject to participant and duration limits.
- CRM and Microsoft 365 integrations: Connect calling with supported business applications for functions such as contact lookup, click-to-call, or activity logging.
- Call recording: Captures selected calls manually or automatically, depending on the plan and configuration.
- Reports and live wallboards: Display measures such as missed calls, queue wait times, call volume, and agent availability.
- AI call summaries: Generate a written recap and possible action items from a conversation. Employees should verify important details before using the recap.
Ask which plan includes recording and reporting, who can access recordings, and how long the provider retains the files. Decide how your team willuse call recordings before choosing storage and access settings.
Benefits of Hosted PBX Systems
For a business considering hosted PBX, the practical benefits depend on the current phone setup, the employees who use the system, and the work required to keep calls running.
Lower Upfront Investment and Predictable Monthly Costs
Your business can start without buying a PBX server and paying for a full local installation. Predictable subscription pricing can make it easier to budget for ongoing communications costs. Remember to account for equipment, taxes, add-ons, and usage charges.
Scale Up or Down as You Grow
Businesses can add users and extensions without investing in additional PBX expansion hardware, subject to licensing and network capacity. A retailer preparing for a seasonal rush, for example, can provision temporary staff and place those employees in the appropriate call queues.
Administrators can also remove accounts when employees leave, but the provider may continue billing for a contracted minimum number of seats.
Support for Remote and Hybrid Teams
Employees can answer the same business number from an office phone, a home computer, or a mobile app. A receptionist can transfer a caller to a remote colleague through the company directory without asking the caller to dial another number.
Platform Redundancy and Business Continuity
Geographically redundant infrastructure can help keep a hosted phone platform available when a location loses power or internet connectivity. However, platform availability is not the same as call continuity at the affected office. Businesses still need backup power, working connectivity, and configured fallback routing. Incoming calls can be redirected to another branch or employees on separate internet or cellular connections, while existing calls may drop during failover.
Provider Handles Maintenance and Updates
The provider patches and upgrades the hosted PBX servers. Your IT team can spend less time maintaining phone-system hardware or arranging specialist repairs.
Your business still needs someone to manage users, permissions, local networking, and supported devices.
Advanced Calling Features Without Large Upfront Investments
Small and mid-sized businesses can buy access to auto attendants, queues, and reporting through a subscription. A company can introduce department-level call handling without purchasing dedicated equipment for each function.
Can SMBs Benefit from Hosted PBX?
Yes. Hosted PBX suits small and mid-sized businesses that need organized call handling without operating a phone server.
An office manager can add a new employee through a portal, assign an extension, and update the company directory. A growing business can connect a new site to existing departments and call queues. A small support team can use reports to identify unanswered calls without maintaining a separate reporting server.
A fully hosted deployment may not be ideal for locations with unreliable internet and no workable backup connection. Businesses with specialized alarm lines, extensive analog equipment, or unusual integration requirements should also evaluate hybrid and on-premises options before committing.
What Your Site Needs Before a Hosted PBX Goes Live
Run the readiness check at every location, including small branches.
- Capacity for the busiest hour: Measure simultaneous calls alongside video meetings, file uploads, and other traffic. Check upload capacity, latency, jitter, and packet loss.
- A router configured for voice: Have the provider review firewall rules, traffic prioritization, and any settings that could interfere with calling.
- Battery backup: Protect the modem or optical network terminal, router, and switches. Phones powered through a network switch need the switch to stay powered.
- A backup internet connection: Confirm cellular coverage or a secondary wired connection, then test the provider’s failover configuration.
- Emergency calling locations: Configure the appropriate location information for users and devices, including shared phones and remote workers. Establish a process for updating locations when employees move. Confirm how the deployment meets applicable US requirements for direct 911 access and dispatchable location. See Kari’s Law and RAY BAUM’S Act.
- A plan for fax and alarm lines: Inventory fax machines, alarm panels, elevator phones, door-entry systems, and paging equipment. Confirm supported replacements or adapters with the phone provider and the equipment service company.
- A tested call-flow document: Check business hours, holidays, queue overflow, voicemail destinations, and emergency forwarding before moving your main number.
What Will a Hosted PBX Cost You?
Providers usually charge a recurring subscription, initial deployment fees, and additional amounts for services outside the base plan.
Monthly service costs: Providers generally charge according to the number of licensed users and the selected feature tier. Ask whether shared phones, call-center users, and common-area devices need different licenses.
One-time costs: Budget for desk phones, headsets, adapters, installation, configuration, training, and any network upgrades. Confirm whether you will purchase, rent, or receive hardware under the service contract.
Additional charges: Check international calling, toll-free usage, texting registration and messaging, recording storage, AI features, integrations, taxes, and regulatory or provider-imposed fees.
Sangoma’s guide to UCaaS pricing explains how providers charge for subscriptions, add-ons, and different deployment options.
Ask every provider for an all-in quote based on the same users, devices, call volumes, features, and contract term.
How to Choose a Hosted PBX Provider
The best hosted PBX provider should demonstrate your required call flows, explain the failure scenarios, and put the commercial terms in writing.
Map Your Call Flows Before Comparing Providers
Document users, locations, business hours, after-hours handling, queues, and overflow destinations. List required integrations, recording rules, compliance obligations, and your budget.
Include warehouse paging equipment and shared reception phones, even when other employees will use apps. Ask the provider to confirm the equipment, connections, and licenses needed for each.
Ask: “Can you demonstrate our call flows and identify every license, device, and service required to run them?”
Plan for Outages and Failover
Separate a provider outage from a local internet or power failure. Ask whether incoming calls can move to mobile numbers or another branch, whether LTE backup is available, and whether any on-site equipment can maintain calling.
For perspective, 99.99% availability translates to approximately 53 minutes of downtime in a 365-day year, assuming continuous measurement. Actual service-level agreements (SLAs), measurement periods, exclusions, and remedies vary. Service credits typically offset a portion of the bill rather than lost revenue.
Ask: “What happens to incoming, outgoing, and active calls when our primary internet connection fails, and which failures does your SLA exclude?”
Understand Who Manages Your Voice Network
Some providers operate substantial parts of their voice network; others assemble services from upstream carriers.
Ask who investigates carrier routing, local connectivity, and platform problems. Request call-quality reports that show jitter, packet loss, and the affected users or locations.
Ask: “Which parts of the call path do you operate, and who owns troubleshooting when the problem crosses networks?”
Match Plans and Integrations to Your Needs
Providers may reserve recording, advanced reporting, and CRM integrations for higher tiers or sell the features as add-ons. You may also need a separate license from the application vendor to use an integration listed on a marketplace.
Have the salesperson price the complete feature list before comparing seat rates.
Ask: “Which plan includes every requirement on our list, and which integrations or features add charges beyond the seat price?”
Verify Security and Compliance Documentation
Request dated documentation for the services your business will purchase:
- Call encryption: Confirm where signaling and media are encrypted, and where protection ends.
- Independent controls assessment: Request the relevant SOC 2 report and check the services and reporting period included.
- Healthcare requirements: Obtain a signed business associate agreement when the provider handles electronic protected health information as a HIPAA business associate. Confirm which purchased services and features are covered by the agreement. HHS guidance
- Payment handling: Ask how the service supports your PCI DSS obligations, including controls to prevent prohibited sensitive authentication data from remaining in recordings. PCI Security Standards Council guidance
- Caller authentication: Ask how the provider uses STIR/SHAKEN to authenticate caller identity information and handles number-reputation issues. Receiving carriers may still label authenticated calls as spam.
- Recording storage: Confirm storage locations, access permissions, retention settings, deletion procedures, and export options.
Record the date of each response and check that the supporting documents remain current.
Ask: “Can you provide the current security reports and contractual commitments for the exact services in our quote?”
Clarify Number Porting, Device Compatibility, and Migration Support
A business with multiple numbers, carriers, or locations should not assume every number will move in a day. Carriers may delay a port when account details or service addresses do not match their records.
Confirm the supported model and firmware for every phone you want to keep. Assign responsibility for rebuilding greetings, menus, queues, and routing before the port date. Keep existing service active until the provider confirms the numbers have moved and testing is complete.
Use a number-porting checklist to gather the required records early.
Ask: “Who will prepare and test our configuration, confirm phone compatibility, and coordinate the number transfer?”
Confirm Support and Escalation Before You Sign
Ask whether technical support is available by phone and chat around the clock, who helps during setup, and how urgent issues reach an engineer.
Send a technical question before purchasing. Evaluate whether the support representative addresses your specific environment and identifies the next diagnostic step. Compare the response with the provider’s documented 24/7 support arrangements.
Ask: “If our main number stops receiving calls after hours, how do we reach an engineer and escalate the incident?”
Review Contract Flexibility and Exit Terms
A provider may offer a lower rate for a longer contract, then require payment for a minimum number of seats throughout the term.
Check minimum seats, mid-contract reductions, renewal notice periods, automatic renewal, price changes, and early termination fees. Confirm the process for porting numbers away and exporting recordings before access ends.
Ask: “What would we owe if we reduced our users or left early, and how would we retrieve our numbers and recordings?”
Test the Solution on Your Own Network
Run a trial with a real team using the office connection, actual headsets, and the phones you intend to deploy. Test transfers, queues, mobile calling, integrations, and audio quality during your busiest period.
During a scheduled test window, disconnect the primary internet connection and verify the backup behavior. Check whether new calls connect and whether active calls survive.
Ask: “Can we test our required workflows and an internet failure before committing to the full rollout?”
Hosted PBX Providers to Consider
The providers below represent different approaches to business calling, from cloud subscriptions to hybrid and self-managed deployments. This is a comparison of options to evaluate, not an independently ranked list. Features, prices, supported devices, and regional availability can change, so confirm the details relevant to your quote.
| Provider | Best for | Deployment options | Desk phone options | Pricing model |
| Sangoma | Multi-site businesses seeking communications, networking, and security from one vendor | Cloud, hybrid, and on-premises | Sangoma phones and supported third-party models, depending on platform | Custom quote for the proposed deployment |
| RingCentral | Teams connecting calling to multiple business applications | Cloud | Supported IP phones through its device catalog | Published per-user plans; add-ons and custom quotes |
| Nextiva | Small teams seeking cloud calling with messaging and meetings | Cloud | Optional compatible VoIP desk phones through its business phone service | Published per-user plans |
| 8×8 | Businesses with regular international calling | Cloud | Supported models in its device catalog | Quote only |
| Dialpad | Teams wanting call transcripts and summaries in the calling application | Cloud | Supported Poly, Yealink, and other listed models | Published per-user Standard and Pro plans; Enterprise quote |
| Vonage | Businesses evaluating cloud calling alongside programmable communications | Cloud for Vonage Business Communications | Supported VoIP desk phones on Premium and Advanced | Published per-line or per-extension plans |
| GoTo Connect | Multi-location teams managing visual call flows | Cloud | Models listed in its supported-equipment guide | Quote only |
| Zoom Phone | Teams already using Zoom | Cloud; native calling plans and BYOC options | Supported Poly, Yealink, Cisco, and other compatible desk phones | Per-user plans; carrier charges depend on calling arrangement |
| Microsoft Teams Phone | Businesses already working in Teams | Cloud PBX with Microsoft or third-party telephone connectivity | Teams-certified phones or compatible devices through SIP Gateway | Published per-user licenses; telephone service bundled or separate |
| 3CX | IT teams wanting deployment and administration control | Hosted by 3CX, self-hosted cloud, or on-premises | Supported SIP phones; requirements vary by model and deployment | Published annual system licensing based on simultaneous calls; hosting and carrier service separate |
Sangoma
Sangoma gives businesses flexibility to choose cloud, hybrid, or on-premises communications based on their operational requirements. Beyond calling, Sangoma offers managed networking and security services that can simplify vendor coordination, deployment, and ongoing support. Its Business Voice Plus hybrid solution combines centralized cloud management with on-site call control and optional failover paths such as LTE or POTS, depending on the configuration. Learn more about Sangoma’s hybrid failover options.
Pricing depends on the deployment, locations, licenses, equipment, and managed services included. Request a tailored quote for the complete solution.
RingCentral
RingCentral suits teams that need calling connected to CRM, productivity, and other business applications. Its App Gallery offers a large library of integrations; availability and functionality vary by application and plan.
When comparing Sangoma and RingCentral, price the required administration and analytics features. RingCentral reserves some of those features for Advanced or Ultra plans and charges separately for certain add-ons.
Nextiva
Nextiva offers a cloud setup for teams that want voice, messaging, meetings, and mobile access. Compare its published plans to confirm exactly which functions are included for your account.
Businesses comparing Sangoma and Nextiva should check which plan includes advanced reporting, transcription, summaries, and any required integrations, since plan names and inclusions may change.
8×8
8×8 merits consideration for businesses that regularly call international customers or suppliers. Its X Series calling documentation lists 14 included countries for X2, 32 for X3, and 48 for X4, subject to destination restrictions and fair-use terms. Confirm the applicable license and region. Contact center licenses have different allowances.
8×8 provides pricing by quote. When comparing Sangoma and 8×8, ask each sales team to price your actual calling destinations and number types alongside the required features.
Dialpad
Dialpad Connect includes real-time transcription and AI Recap summaries across its Standard, Pro, and Enterprise tiers, according to its feature comparison. Employees can review conversations within the calling application.
Teams comparing Sangoma and Dialpad should distinguish AI transcription from automatic recording. Certain shared-line recording features and minimum-seat requirements depend on the selected plan. Confirm the recording configuration and any minimum in the order form before upgrading.
Vonage
Vonage is worth evaluating when a business needs cloud calling and has developers building custom communication workflows. Vonage Business Communications and the separate programmable Voice API serve different requirements, so scope the products and development work separately.
Under its VBC plans, Vonage offers app-based calling and messaging with Mobile; desk-phone support, meetings, and integrations with Premium; and additional recording and voicemail features with Advanced. Verify the current plan needed for desk-phone support before purchasing.
GoTo Connect
GoTo Connect suits multi-location businesses whose administrators regularly change greetings, schedules, and routing. Administrators can arrange call-flow elements through its visual drag-and-drop dial plan editor.
GoTo offers core phone-system capabilities alongside separate customer-experience packages. Businesses needing advanced reporting, AI summaries, or additional customer channels should compare the current package features and license requirements before requesting a quote.
Zoom Phone
Zoom Phone puts calling alongside the Zoom tools employees may already use for meetings and chat. US options include metered and unlimited US/Canada calling, while businesses can retain a supported carrier arrangement through BYOC.
Zoom does not include unlimited worldwide calling with US/Canada Unlimited. Businesses with overseas sites must verify local number availability and the appropriate native or BYOC service.
Microsoft Teams Phone
Teams Phone suits businesses that want telephone calling inside Teams. Users need the applicable Teams and Teams Phone licenses, plus telephone-network connectivity through a Microsoft Calling Plan, Operator Connect, Direct Routing, or another supported option.
Businesses should verify each user’s calling licenses rather than assume the existing Microsoft 365 subscription includes telephone service. Businesses assessing Sangoma’s Microsoft Teams integration should confirm which integration model and licenses match their intended setup.
3CX
3CX suits IT teams that want to administer phone-system software and choose how the system is hosted. Businesses can use 3CX hosting, their own cloud environment, or an on-premises installation.
3CX prices its commercial system licenses by simultaneous-call capacity rather than a standard per-user subscription. When comparing Sangoma and 3CX, budget for hosting, telephone service, and administration. With self-hosting, your team or service partner must handle updates, patches, and backups.
Find the Right Communications Setup with Sangoma
Before migrating, review your call flows, confirm which existing devices are compatible, and plan how calls will be handled during an outage. For a cloud deployment, Sangoma offers deployment and onboarding guidance. Hybrid installations require additional planning around local call control, network readiness, and failover testing.
Not every location needs the same setup.
A branch that needs on-site calling continuity during an internet outage may benefit from hybrid communications, using local call control and configured LTE, secondary internet, or POTS failover options. Other sites may be better suited to fully hosted calling. Sangoma’s hybrid deployment checklist can help teams evaluate each location. Sangoma also offers managed internet, networking, and security services, with support resources for deployment and ongoing operations.
Ready to modernize your business communications? Talk to a Sangoma expert to review your infrastructure, assess your requirements, and identify the right cloud, hybrid, or on-premises solution for your business.
Hosted PBX FAQs
Are hosted PBX, cloud PBX and virtual PBX the same thing?
Providers usually use hosted PBX and cloud PBX to describe a provider-operated business phone system. Providers use “virtual PBX” less consistently, sometimes for a complete cloud phone system and sometimes for a smaller set of answering and forwarding features. Check outbound calling, extensions, queues, and device support before treating the terms as equivalent.
Do I need SIP trunking with a hosted PBX?
A provider generally includes telephone-network connectivity with a fully managed hosted PBX subscription, so your business does not need to purchase a separate SIP trunk. Businesses using self-hosted systems or bring-your-own-carrier arrangements may need a separate carrier or SIP trunking service.
What happens to a hosted PBX when the office internet goes down?
The provider’s phone system can remain operational, but office phones lose access unless a working backup connection takes over. The provider can configure fallback routing to send incoming calls to another site or mobile numbers. Employees may also use mobile apps over cellular data. Active calls may drop during the changeover, depending on the design.
Can I keep my business numbers when I move to a hosted PBX?
Usually, provided the new provider supports the numbers and service area. Your provider will need accurate account details and authorization to request the transfer. Keep the existing service active until porting is complete and inbound and outbound calling have been tested.
How long does it take to switch to a hosted PBX?
A provider can usually prepare a small deployment using new numbers sooner than a migration involving several carriers, locations, and integrations. Before confirming a date, the provider needs to assess network readiness, equipment delivery, configuration, training, and number porting. Request a written plan with confirmed dependencies before choosing a go-live date.
Is a hosted PBX secure?
A provider and its customer can secure hosted business calling through appropriate platform, network, and account controls. Evaluate encryption, administrative permissions, multifactor authentication, fraud controls, and recording access. Confirm who manages each control and how administrators remove access when employees leave.
Do businesses still buy on-premises PBX systems?
Yes. Businesses may choose an on-premises system for local control, specialized integrations, existing equipment, or site-specific operating requirements. Modern on-premises systems can support VoIP, mobile applications, and remote employees. Businesses can also choose a hybrid deployment when some calling functions need local equipment.
Will my fax machine and alarm panel work on a hosted PBX?
Ask the provider to verify the exact device, adapter, service, and intended use. A supported analog telephone adapter may work for certain fax machines, or your business can consider a fax service designed for its requirements.
Alarm panels, elevator phones, and other life-safety devices may require dedicated, approved connectivity rather than an ordinary VoIP adapter. Have the equipment service company and communications provider evaluate the requirements, install an approved connection, and test it before disconnecting the existing line.