Differences between Hosted VoIP and IP PBX

Differences between Hosted VoIP and IP PBX

Both hosted VoIP services and in-house IP PBX phone systems have their own merits and demerits. It is therefore necessary to understand the fundamental differences between the two systems and thoroughly weigh the pros and cons before choosing one system over the other.


A hosted VoIP service consists of an Internet phone system that connects phone lines and other communication tools. A service provider carries and manages the technological needs and resources required to make the system work. IP phones that are usually included in bundle packages are plugged into a router on premise. All the signaling, calls and functions are taken care of by the service provider's IP-PBX server. Subscribers are charged monthly fees for the services rendered.


An IP PBX phone system, on the other hand, is like a conventional PBX set up in an on-premise location. Users purchase hardware and equipment and have them installed and connected using gateway cards. Signaling takes place from the IP phone to the PBX server over LAN. Calls may take place through traditional PSTN connections or over the Internet using VoIP.


If you decide to use an IP PBX phone system, you need to buy and maintain equipment, including a server with the correct interface cards. On the other hand, subscribing to a hosted VoIP service requires that you buy only the IP phone units that connect to the Internet.


The initial costs for subscribing to a hosted VoIP service is therefore more affordable than setting up an IP PBX system. Moreover, it does not demand continuous maintenance and technical attention. With a hosted VoIP service, all problems can be solved remotely by the service provider. This may turn into a disadvantage if the host system is unreliable. You would have little or no control over the performance of your phone system, and can cause you communication problems.


Even as IP PBX eliminates the risk of monthly user fee hikes, hosted phone service providers will obviously have a lot more features to offer their subscribers. Users can expect system upgrades and enhancements as competition in the hosted VoIP industry compete against each other. If you want professional communications equipped with advanced features, it would well be worth to spend your money on comprehensive plans from VoIP service providers.


Hosted VoIP also gives users mobility. Since units are not dependent on hardware and equipment stored in a single location, you can take your communications anywhere there is an Internet connection. An advantage of having your own PBX system, on the other hand, is the control that it gives you. As opposed with hosted services which highly depend on settings from the provider, a PBX system gives you the ability to fine tune the system down to its littlest detail.


With a hosted VoIP service, you are mainly dependent on the service provider. The signaling and voice quality of calls are dependent on the host's system. When you lose your Internet connection, you also lose your access to calls, voicemail messages and faxes. Your phone number, as well as all the features and functions that go with it, rests with the provider and their financial and operational stability.


On the other hand, an IP-PBX requires constant attention of a technical staff, requiring additional costs for manpower. As you expand your communications system, you would face risks of having a more complex PBX system that is more prone to problems. In the unlikely event that your IP PBX manufacturer closes business, you would be stranded without the ability to manage the system at its root.


Making the choice between a hosted VoIP service and an on-premise PBX system depends on your needs and capabilities as a company. It is best to review actual products and services to help you decide on the best choice for your communications.