Glossary · Hosted PBX
What is hosted PBX?
Hosted PBX is a cloud-based business phone system where the provider hosts and manages all the PBX infrastructure on their servers. Customers access phone features via software apps and IP-connected devices, paying a per-user monthly subscription instead of buying and maintaining on-premises PBX hardware. Hosted PBX is sometimes called cloud PBX, virtual PBX, or PBX-as-a-Service. Most modern hosted PBX products are part of broader UCaaS platforms that add video meetings, team chat, and business SMS to the phone core.
Hosted PBX vs. traditional on-premises PBX
The core difference: where the system lives and who operates it.
| Aspect | On-Premises PBX | Hosted PBX |
|---|---|---|
| Location | Customer’s office/data center | Provider’s cloud |
| Hardware | Customer buys and maintains | Provider owns |
| Upfront cost | $10K–$500K+ | Zero |
| Ongoing cost | Carrier lines + maintenance | Per-user subscription |
| Setup time | Weeks to months | Minutes |
| IT skills required | Phone system expertise | Basic admin only |
| Upgrades | Major projects every 3–7 years | Continuous, automatic |
| Scaling | Hardware changes required | Add/remove users in admin portal |
| Remote work | Limited without VPN/tromboning | Native from any device |
| AI features | Rare or absent | Standard in modern platforms |
| Disaster recovery | Customer’s problem | Provider’s geographic redundancy |
What’s included in hosted PBX
Standard features:
- Unlimited inbound/outbound calling (domestic typically unlimited; international metered or included)
- Extensions per user
- Auto attendant and IVR menus
- Voicemail with email/SMS delivery and often transcription
- Call transfer, hold, park, pickup, waiting
- Ring groups, hunt groups, queues
- Call recording (subject to compliance rules)
- Mobile apps (iOS, Android) and desktop softphones
- Administrative portal for user management
- Basic analytics and call reporting
Advanced features (varies by provider):
- HD video meetings included
- Business SMS and team chat
- Online fax (HIPAA-compliant in regulated industries)
- Real-time AI transcription with sentiment
- AI SMS drafting
- 24/7 AI receptionist
- CRM integrations (Salesforce, HubSpot, Zendesk)
- Microsoft Teams integration
- Contact center (CCaaS) add-on
- Open API for custom workflows
Hosted PBX deployment models
Public cloud (multi-tenant) — most common. Provider operates shared infrastructure for all customers with logical tenant isolation. Suits 90%+ of businesses.
Private cloud (single-tenant) — dedicated infrastructure per customer. Used when data-residency, regulatory, or contractual requirements mandate isolation.
Hybrid — mix of cloud and on-premises components, often during migration from legacy PBX.
DialPhone is a public-cloud hosted PBX with multi-region data residency for customers that need regional pinning (US, EU, UK, AU, JP) without full private-cloud complexity.
Who uses hosted PBX
- Small businesses replacing legacy phone lines with a modern, mobile-ready system
- Mid-market consolidating multiple communications vendors
- Enterprises standardizing communications across regions and subsidiaries
- Remote/hybrid teams needing a consistent phone experience across locations
- Startups wanting a business phone system without capital expense
- Regulated industries using hosted PBX with HIPAA BAAs or FINRA-compliant retention
Typical hosted PBX pricing
- Entry tier — $10–$25/user/mo. Basic calling, mobile apps, basic voicemail.
- Mid tier — $25–$45/user/mo. Adds CRM integration, business SMS, video meetings.
- Top tier — $45–$80/user/mo. Adds advanced analytics, priority support, API access, enterprise security.
- Enterprise — custom pricing for large deployments with custom contracts.
DialPhone hosted PBX: Core $24, Advanced $34, Ultra $54 per user per month, billed annually. See pricing →
What to look for in a hosted PBX provider
- Reliability — 99.999% uptime SLA or better
- Call quality — HD codecs, global edge network, jitter handling
- Security and compliance — SOC 2, HIPAA BAA, GDPR, encryption at rest and in transit
- Integrations — native connections to your CRM and helpdesk
- AI capabilities — transcription, summaries, virtual agents
- Mobile experience — native iOS/Android apps, not just web
- Porting — free number porting, no interruption
- Support — 24/7 access, dedicated CSM at higher tiers
- Transparent pricing — published rates at every tier, not quote-only
- Migration support — help moving from your current system
Example
A 60-person architecture firm had a 9-year-old on-premises PBX approaching end-of-life. The quoted replacement: $45,000 in new PBX hardware plus $8,000/year in maintenance. They moved to DialPhone Advanced at $34/user = $2,040/month. ROI: recovered the “saved” capital expense in approximately 18 months, and gained mobile apps, AI transcription, and HIPAA-compliant communications for their healthcare project work — capabilities the on-premises system couldn’t deliver.
See DialPhone’s hosted PBX
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