What is a virtual or hosted PBX phone system?
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Optimize your business communications with RingCentral's industry-leading hosted phone system.
On-premises phone systems are costly, complex, and clunky. In short, they're outdated. You need telephony fit for modern business, and hosted PBX solutions offer just that. Read on to learn how the power of the cloud can take your comms to new heights.
What is hosted PBX?
A hosted PBX (Private Branch Exchange) is a cloud-based phone system hosted and managed by a service provider. It offers advanced telephony without any need for on-premises hardware, making it more flexible, powerful, and cost-effective.
Also known as a cloud PBX, IP PBX, or virtual PBX, it uses cloud technology to replicate the features of a traditional PBX built on a switchboard and landlines. While adding easy compatibility with varied digital channels. The result is a private communication network that’s fit for the demands of modern business.
In addition to everything an old-fashioned PBX supports (including voicemail, extensions, conferencing, paging, intercom calling, and toll-free numbers), a hosted PBX phone system can deliver complete mobile integration, business SMS, video calls and online meetings, and so much more.
This is a high-value prospect for any business relying on dated architecture. A company that can’t efficiently and economically field business calls will struggle to remain competitive.
Overall, having a hosted PBX system in place allows unprecedented optimization. Support agents can suffer less frustration, and the time and money saved through moving past on-premises telephony can be put towards other projects.
How does hosted PBX work?
A hosted PBX service makes and securely routes phone calls through the internet by using a range of technologies that fall under the umbrella of VoIP (Voice over Internet Protocol).
Phone calls use classically analog transmissions, so they’re converted into digital data and back again as needed. A business using a hosted PBX can move all its call handling to digital devices (meaning only incoming calls require conversion) or configure ATAs (Analog Telephone Adapters) to keep using traditional handsets.
A hosted PBX provider takes care of all the technical aspects of telephony, receiving and processing call requests as they arrive. Using powerful cloud processing, it can rapidly and consistently manage call flow, resulting in high-quality private audio with negligible lag and minimal dropped-call rates.
Using integrations with other cloud services, a cloud-hosted PBX can also boast a range of convenient features. Interactive Voice Response (IVR), for example, can help callers find what they need without the immediate involvement of support agents, while voicemail messages can be automatically transcribed, saving time.
Hosted PBX vs. on-premises PBX
There are three core differentiators separating a hosted PBX and a traditional on-premises PBX: convenience, functionality, and cost.
Convenience
Setting up an on-premises PBX is a complicated and drawn-out process requiring the installation of specialized hardware. That hardware must then be maintained by expert technicians to ensure reliable performance. This makes it necessary to have an office with adequate space and connections.
Setting up hosted PBX, however, is quite easy. Because all the systems are handled in the cloud, the underlying hardware is already prepared in the provider’s data center. Once you’ve subscribed to the service, you can immediately start using it through desktops, laptops, or mobile devices.
You can then continue knowing that the hardware and software you’re using is being expertly managed and periodically updated for optimal performance. And when demand scales up, your hosted PBX will seamlessly scale with it.
Functionality
Though an on-premises PBX can exceed the basic capabilities of traditional telephony (with call routing, extensions, voicemail, etc.), adding features typically requires significant investment. Even when it’s possible to manage it without further hardware or software, integrating the new features isn’t easy.
In contrast, the possibilities for hosted PBX features are practically unlimited. Many cloud services are developed to be compatible with others out of the gate, while others can connect through third-party services. Implementing expanded call analytics or CRM data sharing can be done in a few clicks.
Perhaps the most important word here is unification. A business using a hosted PBX can bring all its communications together into one convenient platform that reliably keeps up with the technological curve.
Cost
Installing and configuring an on-premises PBX has always required a substantial upfront investment, making it a tricky commitment in general but particularly dicey for any business yet to earn enterprise-level revenue. And that’s just the beginning. Past that point, staff training and system maintenance costs can soon add up.
In addition to being more convenient and powerful, a modern hosted PBX is so much more budget-friendly. It needs no hardware installation, uses accessible functions that require only minimal training, works on existing devices with no modification, and receives new features and bug fixes at no extra cost.
The cost reduction is such that it’s even practical to use a hosted PBX for small business services. Pay only for the functions you need in accordance with how heavily you use them, then invest more when the results justify it.
Benefits of hosted PBX
Maximized phone service uptime for superior operational stability
With the RingCentral mobile app, employees can call, fax, SMS text, enable call recording, and host conference calls and online meetings using their smartphones or tablets. And with mobile data available whenever necessary, they can keep working if there’s a power outage, inclement weather, or a major disaster, delivering excellent business continuity.
Cost-effective pricing with lower overall costs and increased ROI
With RingCentral's business PBX solution, you don't have to deal with hardware upgrades and upkeep, a burden that’s particularly tough for startups or small businesses.
You can eliminate on-premise PBX hardware to reduce the initial investment and remove the otherwise-inevitable maintenance costs that can easily add up as the months go by.
Unified communications across all locations and device types
Choosing RingCentral as your hosted PBX provider makes it possible to connect all your business communications through one versatile platform that can be accessed anywhere through desktops, laptops, smartphones, and other IoT devices.
That puts you in the position to easily accommodate staff anywhere in the world without sacrificing quality or reliability.
A smooth learning curve that results in ease of use
Unlike the complicated PBX setups of old, RingEX is simple to use and easy to manage. Its accessible design empowers users to take advantage of powerful PBX features (including call handling, voicemail, greetings, and much more) without needing IT staff to assist them.
The result? Improved morale, raised productivity, and better caller experiences.
Cloud telephony that flexibly adapts and scales with business needs
With RingCentral’s desktop and mobile apps, you can use your PBX the moment it’s configured, meaning you can immediately start adding phone numbers, locations, phone lines, and extensions.
And with immense processing power and feature options waiting in the cloud, you have everything you need to deal with even the biggest spikes in demand.
Should I switch to a hosted PBX system?
Deciding whether to switch to a virtual PBX phone system can feel like a huge decision. To help you understand whether a virtual PBX system is the right choice, break it down into these more digestible questions:
Do your teams want to work remotely? Traditional PBX systems tie your staff to their desk phones on-site at your premises. That’s the only place your setup works. A hosted PBX or VoIP phone system works wherever your staff have an internet connection. They can flick on their mobile phones and access all the calling features they need.
Would it be more efficient to have one solution for all channels? Many businesses use multiple communication channels—SMS, instant messaging, video conferencing, and more. A VoIP service can unite these channels on one platform, as a unified communications system. That can bring both improvements in efficiency and cost savings.
Do you want your communications to outlive traditional telephone networks? In many countries, the traditional public switched telephone network (PSTN) is being phased out. SIP trunking could help you get some extra use out of traditional infrastructure, but—ultimately—hosted systems are the most future-proof options.
How to choose between hosted PBX providers
Selecting the best hosted PBX for your business isn’t trivial, but it shouldn’t take too long if you consider the right factors (namely features, reliability, cost, and brand reputation).
Here’s how to choose your hosted PBX provider by narrowing down an initial shortlist of contenders:
Check their reputations
Choosing a hosted PBX for business operations is a serious commitment. Even though it’s possible to change your provider fairly easily, it’s best to stick with one for the long-term. You can then build an effective relationship with the support team and get optimally comfortable with the options at your disposal.
The first thing to do, then, is read reviews and see how highly the prospects are rated. Established providers (such as RingCentral, naturally) are always the safest bets because they’ve proven their quality consistently over years of operation. And if an unknown provider seems too good to be true, it probably is.
Compare their service packages
The best hosted phone system on offer should pair a comprehensive set of features (call forwarding, voicemail, virtual receptionists, etc.) with excellent integration capability. A powerful system that you can’t straightforwardly slot alongside your other business solutions won’t deliver the full benefits of hosted PBX investment.
And then there’s the matter of support, which is particularly important when you’re relying on cloud services. You should require 24/7 assistance via phone, live chat, and email. Anything less than that is unsuitable for business telephony.
Pore over the pricing
With low cost (both upfront and long-term) being one of the core hosted PBX benefits, you must be careful not to overpay—and that means reading the fine print. The key features of hosted PBX should come as standard with no tacked-on fees or maintenance charges hidden where you might not spot them.
At the same time, you don’t want to choose an underwhelming system solely because the provider charges less than its competitors. Instead, focus on finding the right balance between expense and capability.
Confirm their uptime guarantees
You may have found a highly rated provider that delivers outstanding features, support, and pricing—but those things aren’t quite enough. If that provider can’t provide assurances that the services will function properly when you need them most, you’ll need to keep looking.
Ask for an uptime guarantee of at least 99.99%. This is standard for cloud service providers in general, so it’s nothing exceptional to require. Additionally, find out what happens when disasters occur; some outages are unavoidable in the fullness of time, so prioritize having effective disaster recovery processes in place.
Use free trials or demos where available
Before you put pen to paper (so to speak), look for ways to test out each service you’re considering paying for. Free trials can really help you choose between two or three contenders if you use them in quick succession. Demos are solid alternatives when trials aren’t offered, but be sure to ask questions to learn as much as you can.
RingCentral’s hosted PBX features
Online portal management
Take control of your business PBX system. With a cloud-hosted PBX service provider like RingCentral, you can administer, edit, and moderate essential phone functions via an online dashboard. You can set up a Ring Group, establish new handset extensions and endpoints, and create a call routing path.
Virtual presence
Enable your team members to check whether colleagues are online, offline, or engaged in calls. With the presence feature from RingCentral, your team can manage inbound calls more efficiently.
Auto-attendant
Enhance customer experience with RingCentral's Auto-Receptionist. Let a caller feel their call is important. The Auto-Receptionist feature can handle call routing to the appropriate person or department, or choose from other options set by your team.
Hold options
Make customer queues bearable. With RingCentral's cloud-hosted PBX, you can choose the audio your clients can listen to as they wait. Foot-tap-worthy music, company announcements, product promos, or a combination: it’s up to you.
Voicemail-to-email
Playback anytime you like. With RingCentral’s virtual PBX, users can have voicemails sent to them through email, allowing them to access the messages as MP3s instead of needing to retrieve them using voicemail menus.
Conference Bridging
Want a call with more than three participants? RingCentral’s hosted PBX phone system can handle hundreds. That means conference bridging on another level, introducing new possibilities for productivity.
Hosted PBX FAQs
RingCentral’s plans start at $20 per user, per month. After that, they rise in cost in accordance with the added features and integrations they bring to the table. To learn more, check our plans and pricing page, or contact one of our representatives for more in-depth insight.
The hardest part of getting a hosted PBX in place is choosing which service provider best suits your business needs.
Once that’s done, you just need to choose a package or plan, sign up, and install the software. You can then use the online portal to configure your phone numbers and add more lines if needed. After that, it’s as simple as getting started and learning everything you can do with the software.
Yes, the key features of hosted phone system solutions are affordable enough for even small businesses to enjoy.
The beauty of a hosted PBX lies in its affordability, flexibility, and scalability, making it readily customizable. You can simply start small and commit to more features when the circumstances are right.
Virtual PBX is a business phone system where all of the necessary infrastructure is hosted and managed in the cloud, by a third-party vendor. You get real-time access to a full-fledged telecoms system but without the burdens of on-site hardware and its maintenance.
Switching to a virtual PBX system is often quick and easy. Once you sign up with a provider, all you generally need is to download the relevant software, customize the system to your needs, and get started.
There’s none of the disruptive and costly physical installation involved with traditional phone systems. You can often, however, keep an existing number through number porting, if desired. Simply ask your hosted PBX provider and they’ll talk you through it.
Absolutely. One of the great benefits of virtual or online PBX is its mobility. After all, any device with internet access can become an IP phone with a full suite of calling features. That means wherever your workforce is, every member can interact with one another—and with customers—with ease.
PBX stands for Private Branch Exchange. It was originally a name given to physical, on-site hardware that allowed businesses to handle and route calls within their office or premises. Now, it increasingly refers to software-based phones systems that provide the same functionality—and a whole lot more.
PSTN is the acronym for public switched telephone network. That network is what most of us would describe as the traditional landline-based phone system. It’s the copper wire and overhead cable dominated network that facilitates landline phone calling.
A hosted PBX is a business phone system to help organizations manage and efficiently handle calls and other communications.
In a nutshell, there is no difference. Virtual PBX and cloud PBX are two names for the same thing. They both refer to a PBX—or wider communications—system where the infrastructure is hosted in the cloud, rather than being physically present at a business location.
There are many benefits of hosted or virtual PBX. Those include the fact that they’re much more mobile than traditional systems. Softphones can turn any internet-connected device into an extension of your business phone system.
They’re also often more cost-efficient and can be readily customized and scaled as needed. What’s more, unlike traditional PBX, they don’t rely on the PSTN, which is a network being phased out in many countries.
Virtual PBX software is hosted in the cloud by your chosen service provider. Your business or call center signs up with that provider, and pays a—usually monthly—subscriptions.
You can then log in to your software from anywhere with an internet connection, and set up users, departments, and more, as needed. Your teams then get a full-featured, reliable software solution for business calling and more.
