Hosted PBX
PBX Definition: Hosted PBX Basics
A hosted PBX system delivers PBX functionality as a service, available over the Public Service Telephone Network (PSTN) and/or the internet. The first hosted PBX was introduced to the market in late 1997 by Virtual PBX ™. Instead of buying PBX equipment, users contract for PBX services from a hosted PBX service provider, a particular type of Application Service Provider (ASP). The first hosted PBX service was very feature-rich compared to most premise-based systems of the time. In fact, some PBX functions, such as follow-me calling, appeared in a hosted service before they became available in hardware PBX equipment. Since that introduction, updates and new offerings from Virtual PBX and other companies have moved feature sets in both directions. Today, it is possible to get hosted PBX service that includes far more features than were available from the first systems of this class, or to contract with companies that provide less functionality for more simple needs.
PBX Software is not the same as a hosted PBX system. A Hosted PBX service may utilize PBX software, especially if they utilize the internet more heavily than the PSTN, but PBX software is generally targeted at businesses that would essentially host their own PBX system on a server. This PBX software is generally difficult to configure and use, and lacks many features of both premise-based and hosted PBX systems.
The central functions of a hosted PBX service are similar to those of hardware PBX systems installed at the user's premises. The main difference is that hosted PBX customers don't buy, install, or maintain any PBX equipment. Instead, the PBX equipment is kept by the service provider, who then shares access to the system among many users (customers). As with premise-based PBX systems, key functions that can be provided by a basic hosted PBX include:
- Present a single business number that gives access to all company employees and departments
- Answer calls with a custom business greeting
- Offer a menu of options for directing the call, such as connecting to a specific extension or to a department
- Provide a directory of employee extensions accessible by inputting digits corresponding to employee first or last names
- Evenly distribute calls to a department among available employees through Automatic Call Distribution (ACD)
- Place callers on hold when they are waiting for an available department employee
- Play music or custom messages whenever callers are waiting on hold
- Take voice messages for any employee extension, for a department, or for the company in general
- Allow transfer of calls between extensions
- Conference multiple incoming calls with employee extensions
- Provide detailed call records and real-time system management
Note that not all of these functions are available from every provider of hosted PBX services, just as they are not available in every PBX product provided by equipment vendors. It is up to the customer to determine what functions best suit company needs and arrange for the corresponding service. The hardest mainstream features to get in a hosted system are real Automatic Call Distribution (ACD) instead of simple hunt groups, flexible company directories, call transfers between extensions (or to an operator or an ACD queue), and real-time system monitoring. In addition, there are a host of other advanced functions that are needed in specific situations that only a few, or even one, providers have been able to make available.
One function of premises PBX equipment that is not part of most hosted PBX services is sharing incoming lines among multiple users. Usually, it is necessary for each employee in a company that purchases hosted PBX services to have a dedicated phone line. This issue is offset by the abilities of hosted PBX systems to handle far more capacity than customer premise equipment (CPE) and to scale as company needs change. CPE systems typically have a smaller number of incoming lines than user extensions. When traffic is high, these PBX systems can ring busy. A hosted PBX usually has a lot more available lines and can handle a much higher number of calls. In addition, hardware PBX buyers often are on a tight budget and buy small systems that can't grow as the company grows. There is no capital outlay for hosted PBX services, and extensions can be added (or deleted) as need change. Hosted PBX customers pay only for what they need.
There are a wide variety of other advantages that a hosted system has over premise equipment. The most important of these benefits is the ability to route calls to any phone, anywhere in the world, rather than just to phones wired directly to the PBX inside an office environment. This and other major advantages of a hosted PBX system are discussed in detail elsewhere, and include much lower entry cost, lower support costs, ease of management, greater flexibility, and dramatically improved scalability.