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HomeBusiness TechVoIPHosted PBX vs. On-Premise PBX: Should You Make the Transition

Hosted PBX vs. On-Premise PBX: Should You Make the Transition

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In 2021, having a scalable, flexible basis of business communication is more important than ever. For many businesses, this means having to transition from time-tested but unwieldy legacy systems to more modern solutions.

In terms of telecommunication, one decision looms in particular: Hosted PBX vs. On-Premise PBX.

Phones are still a vital line of communication between businesses and customers. Recent statistics show that when it comes to contacting businesses, calling is still the first choice of 60% of people.

Modern business phone services help businesses cater to these preferences. Based on VoIP (Voice over Internet Protocol), they are cloud-based, flexible, and scalable.

However, many business owners may still ask themselves whether it’s worth making the transition. Do the benefits outweigh the bother of giving up an established system?

The answer to this question is an emphatic: Yes!

To outline why that’s the case, here’s the run-down of what to expect when switching from an on-premise to a hosted PBX system.

Cloud PBX: Easy Setup and Maintenance

To start with, based on your experience with a legacy on-site PBX, you might be dreading the transition to a hosted one. After all, setting up and maintaining a PBX is a complicated endeavour, requiring frequent visits from the office technician, and a fair amount of patience, right?

Not for cloud PBX.

Provided a decent internet connection, setting up a VoIP-based PBX is a straightforward matter that takes minutes or hours (depending on the size of your organization) rather than days.

In most cases, all you have to do is find a VoIP provider, subscribe, and download their software. Once you have done this, you have access to the admin portal and can easily set up extensions, call routing, office times etc.

In terms of hardware, you can use standard desk phones with VoIP adaptors, or use dedicated VoIP phones. However, hosted PBX also works through softphone applications. You can download your provider’s app as a desktop or mobile application and team members will subsequently be able to access their business numbers from anywhere at any time.

Become Flexible and Scalable

Since hosted PBX is available from anywhere – not just your office desk phone in a single physical location – it has a definite advantage over on-premise systems.

If anything, the COVID-19 pandemic has illustrated that modern business communication demands flexibility. Hosted PBX explicitly caters to the needs of semi-distributed and highly mobile teams. Team members can use their business numbers no matter whether they’re at the office, on a business trip, or working from home during the lockdown.

Another big plus in favour of hosted PBX is its easy scalability. Adding or removing extensions for new hires, or people who switch departments is a matter of a few clicks in the admin portal. If your business is growing rapidly, you can switch between your VoIP provider’s plans without having to install any new infrastructure.

Benefiting from Additional Productivity Features and Integrations

Cloud-based PBX won’t just save you the headaches of dealing with cumbersome tech on-site. It also usually comes with an array of additional productivity-boosting features that will save you time and money.

For example, many VoIP providers include functionalities such as auto-attendants, interactive voice response, and call analytics in their packages. Features like hold music, advanced call management, and caller IDs are standard.

You may also be able to centralize communications, as VoIP providers often also offer additional channels. These could include video calling and conferencing, chat, MMS, SMS, virtual fax, and team messaging.

Plus, since hosted PBX systems are cloud-based, they are easy to integrate into an existing network of business apps. You can connect them to customer relationship management (CRM) software like Salesforce and HubSpot. Or to office suites like Office 365 and Google Workspace.

All in all, this will help you reduce friction losses and streamline workflows.

Pricing Advantages 

Finally, a crucial point for any business: Hosted PBX is generally cheaper than landline-based on-premise systems.

If you’re mostly satisfied with your existing system, then the cost of switching to a cloud-based system may seem prohibitive, but the transition will pay off in the mid-term already.

Statistics show that on average, VoIP rates are 40% below landline standards domestically and 90% internationally. Not to mention that many hosted PBX providers already include certain call volumes and toll-free numbers in their packages.

Plus, since many cloud PBX offers come in a package with other communication channels and functionalities, you can cut back on other subscriptions, like for a video conferencing service.


If you’re still using a traditional on-premise PBX, then 2021 is the right time to transition to the cloud.

Hosted PBX can help you simplify your business communications, and render them more flexible and scalable.

All in all, it will help you become more agile in today’s fast-paced, demanding business sphere.

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