How Does Hosted VoIP PBX Work?

Is your company thinking of upgrading to a business VoIP solution?  If so, a hosted VoIP PBX system could be the way to go.  With an array of products ranging from open-source applications to quality commercial products, you are sure to find a system that suits businesses of all sizes. 

Though commonly used to describe the technology, the term hosted VoIP PBX is often confusing, primarily because VoIP is such a significant advancement over traditional PBX systems.  There is no confusion about the benefits however, as VoIP PBX services allow organizations to enjoy enterprise class features on a small business budget.  Clients can easily bridge communication gaps between the central office with the ability to link home-based employees and remote locations by way of a fully hosted VoIP PBX service.  In most cases, these systems offer a simple plug and play functionality which helps to avoid expensive installation fees and additional investment. 

Though functionality varies from provider to provider, here are some of the common features your business will enjoy with a hosted VoIP PBX system:

1.) Full Automation - 24/7 automated VoIP PBX service that answers incoming calls while offering menu options to route callers accordingly.

2.)  Extension Dialing and Call Transfer - Delivers stable PBX-quality extension dialing.  With the implementation of hosted business VoIP, home-based and remote employees can receive calls via their extension no matter where they are. 

3.)  Self Management - The freedom to create and administer user accounts from a single primary account.  This feature helps businesses save money on third-party programming expenses by providing internal tracking capabilities.  With most products, centralized administration and control of all locations can be efficiently handled via a VoIP PBX system control panel interface.  

How does hosted VoIP PBX work?  Here is how it can be set up with the devices you are likely to use the most:

Existing Phones and Fax Machines

To leverage an existing internet connection, simply plug your computers, analog telephones and fax machines into the provided ATA (Analog Telephone Adaptor).  This specialized adapter is what turns an ordinary analog phone into an IP-enabled communication end point.  Depending on the VoIP PBX system, there are also may be an Ethernet port to support WAN connectivity and telephony ports for fax machines.    

IP Phones

Business VoIP PBX systems work seamlessly with IP phones.  Simply connect one end of the Ethernet cable into the phone and the other end into a broadband modem or router.  An IP phone can also function with a wireless router by simply connecting the devices with an Ethernet cable.   

Most business VoIP solutions are designed to work directly with IP-based phones connected to an existing LAN.   The VoIP IP PBX itself is the only part of the network that needs to communicate with the internet to deliver calls to a business VoIP provider or receive necessary updates.  These providers accept calls utilizing various standardized protocols, allowing them to provide communications to local, long distance and international phone networks.  This connection actually works both ways as a business VoIP provider can accept incoming calls from traditional telephone networks and deliver them over the internet using VoIP.    

Simplicity and Cost Savings

Hosted VoIP PBX services are ideal for small businesses as they do not have to keep and maintain complex hardware on site.  Since the connection between the phones and VoIP IP PBX is over the internet, there is essentially no need to have the network structured in a manner traditionally required by PBX.  Hosted VoIP PBX services offer similar advantages to other outsourced aspects, providing a more robust feature set along with lower capital investment and operational costs.  As many business VoIP service providers also specialize in local and long distance services, small businesses can enjoy additional cost savings with large volume discounts.