Hosted PBX vs a traditional phone system: which is right for you?
An on-site phone system or one in the cloud? We compare cost, features, flexibility and reliability, and explain how a hosted PBX relates to VoIP.
Every business phone system needs a PBX (private branch exchange): the brain that routes calls to the right person, runs menus and connects internal calls. The question is where that brain lives: in a box in your office, or in the cloud.
The two options
A traditional (on-premise) PBX is hardware you buy and install in your building, connected to phone lines. You own it, and you are responsible for maintaining, upgrading and eventually replacing it.
A hosted PBX runs in your provider's data centre and reaches your phones over the internet. You pay a monthly fee per user, and the provider looks after everything behind the scenes.
Is a hosted PBX the same as VoIP?
Not quite. VoIP is the technology that carries calls over the internet. A hosted PBX is a complete phone system built on that technology: the menus, queues, extensions and diverts that make it a business system rather than just a way to make calls.
Side by side
| Traditional PBX | Hosted PBX | |
|---|---|---|
| Upfront cost | Hardware, installation and line rental | No hardware to buy; phones optional |
| Monthly cost | Lines, calls and maintenance contract | One price per user, with minutes included |
| Adding users | Engineer visit, sometimes new hardware | Minutes, from a web portal |
| Remote working | Limited or expensive | Built in: desk phone, laptop or mobile |
| Upgrades | You pay for them | Included and automatic |
| If the office is closed | Calls stop | Calls divert to mobiles automatically |
| Future-proof | Many rely on lines being switched off by 2027 | Yes |
When a traditional system still makes sense
If you have a large, recent on-site system with years of life left, very poor internet with no way to improve it, or specialist requirements tied to on-site hardware, it can make sense to keep it for now. Even then, plan for the analogue line switch-off: you can connect an existing PBX to the internet with SIP trunks.
Why most businesses choose hosted
For small and medium businesses, a hosted PBX is usually cheaper, simpler and far more flexible. There is nothing to maintain, your team can work from anywhere, and the system grows with you one user at a time. Our cloud phone system starts at £4.99 per user a month, and you keep your existing numbers.