Learn about hosted phone services

The traditional hardware-based PBX used to be the only real choice for full-featured phone service. Now, there are several configurations to choose from, including hosted phone services:

• Traditional PBX systems use dedicated telephone hardware located at your business to provide business phone features and call routing
• A software PBX works like a standard premise-based PBX, except it runs on a computer server, instead of dedicated telephone hardware
• A VoIP PBX is also a premise-based system. It uses VoIP (voice over Internet Protocol) to connect all the phones in the office, but still needs specific telephone hardware to connect to the external telephone network
• Hosted PBX services process calls and provide business phone features via central data centers, and deliver calls to your office(s) using VoIP

Hosted PBX systems can be considered the descendents of the popular Centrex systems of years past. While Centrex lines are still used in many business settings, hardly any companies use the actual Centrex functionality, since modern PBX systems provide more features at a lower total cost.

How it works
The primary difference between a traditional phone system and a hosted phone service is that the bulk of the call handling is done at the vendor's data center, not a telephone closet in your office. When a caller dials your number, it rings through to the data center first.

There, the auto-attendant answers the incoming call with a custom message you record. Callers can leave messages, dial extensions directly, choose a name from a directory, or pick from a menu of departments and recorded messages. All of this is handled at the data center: the call doesn’t reach your office until the call is routed to a live person.

Calls are sent from the data center to their destination using VoIP technology. VoIP converts the audio to data packets and back, allowing the call to be delivered over a broadband Internet connection instead of a dedicated telephone line.

Requirements
There are few special requirements for setting up a hosted phone service. You'll need a broadband Internet connection, as well as phones that are IP capable. In most cases, you'll be able to keep your existing phone numbers and extensions.