What is Hosted PBX?


Hosted PBX or hosted VoIP, otherwise known as an Internet phone system is one where the provider is responsible for housing the IP-PBX as well as handling the technology required to provide the services to the phone system. The desk sets will plug into a router and the calls, signaling, and features are handled through an IP-PBX server at the provider’s location. The provider of the hosted PBX charges a monthly fee that is inclusive of a minutes package and potentially certain features. Charges can also be at a per minute calling cost. Either one can be affordable depending on the rates. A company that knows the amount of minutes spent on the phone in a given month can make effective cost comparisons. Extended features may come with additional cost.



What is On Premise PBX?


On-premise PBX is also known as an IP-PBX phone system. It is similar to a traditional PBX system that resides at a location, such as a computer equipment room or phone closet. The main difference is that IP routing is done with more current technology. The signaling is done with an IP phone to the IP-PBX server using a LAN. Calls can go through a traditional phone company as well as voice over Internet (VoIP) using SIP trunking. Gateway cards are used to connect the system to the traditional phone company provider. The provider can be the one that already provides service, though a SIP trunk can be configured for use with an Internet service telephone provider (ISTP). An Asterisk based system is the most affordable option for on-premise PBX due to the flexibility that is offered with open source software.



Hosted IP-PBX versus On-premise IP-PBX


There are some differences between the two options. Understanding benefits and limitations makes it easier to determine the best option for any particular organization. Cost, expansion, and other considerations are laid out to make it possible to compare the hosted IP-PBX and the on-premise IP-PBX within the same categories to learn of the greatest differences.



Costs


Purchasing an on premise IP-PBX phone system involves buying hardware, which includes a server with the proper number of interface cards (if needed) to be able to connect the telephone company with the IP phones. Hosted IP-PBX only involves purchasing IP phones, though a router and network switch may be needed to ensure there is one specifically dedicated to VoIP.



Hosted PBX:

Lower initial equipment cost and set-up cost
Network qualification is performed by the customer. Any upgrades are at the customers expense
No maintenance costs of the IP-PBX, 
Staff training is included in the installation
Low monthly service cost
Easy to add extra lines
Upgrades and new features are included
Extended features, like conferencing, may come with additional costs


On Premise PBX:


Higher initial cost and set-up cost
Potentially higher maintenance costs
Lower monthly cost after expenses are covered
Ability to SIP trunk to get lower cost calls
On-premise IP-PBX provider will qualify network
On-premise IP-PBX provider will install and program IP-PBX
On-premise IP-PBX will train staff on feature use and "best practices"Type your paragraph here.