What are Hosted Phone Systems?

Updated: December 12th, 2023

The technology used to make and receive phone calls has changed drastically in recent years. While businesses were once limited to running their inbound and outbound calls on standard phone lines, today they’re able to take advantage of a plethora of communication tools and advanced features thanks to improvements in the internet, data storage and cloud technology. 

Businesses that aren’t making use of these advancements are sure to fall behind and may struggle to keep their communications in place after the PSTN switch-off in 2025, which will render the classic phone lines unusable. Many are turning to hosted telephone systems, with good reason. But what exactly is a hosted phone system and how can businesses expect to benefit from making the switch?

Hosted Phone Systems

Lady with headset on for communications

A hosted phone system is a phone network that works over the internet, rather than through copper wires like a traditional phone system. Instead, the phone system data is stored in a data centre and accessed through a cloud system that anyone with an internet connection and login details can access from anywhere in the world.

Although very similar to VOIP phone systems (which also run over the internet), hosted phone systems are a bit different. The main difference is that a VOIP system can be stored on-premise and managed by your internal IT team. A hosted phone system’s network is based off-site and accessed through the cloud.

How Your Hosted Phone System Works

We’ve already written more about how cloud-based phone systems work so we won’t go into too much detail here. But you can read more about the topic in our blogs. 

A hosted phone system operates in the cloud, with its data running through an offsite data centre – rather than on the business’ premises.Unlike ‘traditional’ phone systems, which require individual phone lines to be installed and connected to one device in the office, hosted phone systems work using a licence/ subscriber model with a monthly fee, usually based on the number of users. For example, you’d pay for a cloud phone system licence for 15 seats/users – similar to the way you pay for Microsoft’s G Suite or Google’s workstation.

One of the differences between a hosted phone system and an on-premise one is that maintenance and updates are handled by the provider of a hosted system – rather than you as the buyer/ user. This makes them particularly appealing to smaller businesses or those with limited resources when it comes to managing and maintaining updates.

What are the Benefits of a Hosted Phone System?

Compared to existing phone networks, hosted phone systems offer an array of benefits and outcomes for businesses.

More Scalability

As cloud phone systems work on a licence basis, you can simply buy new seats on your subscription and have new users set up and ready to go in minutes. This is compared to the current process of calling for an engineer to do a site visit and install a physical line (which can take weeks to arrange).

More Flexibility

Cloud phone systems inherently lend themselves to remote or flexible working because they can be accessed by employees anywhere, as long as they have an internet connection. This makes them much more flexible than existing phone lines that need an employee to be in the office next to a phone.

Reduced Initial Investment

Cloud phone systems operate effectively using an app installed on a mobile phone or even a tablet or laptop – this greatly reduces the upfront investment of phone lines and physical phones.

Reduced Ongoing Costs

If your cloud phone system experiences problems you won’t need an engineer to visit, most problems can be fixed remotely. You can also easily add new users (or remove them) with a phone call, so all the ongoing costs of cloud phone systems are greatly reduced compared to existing phone systems.

We’ve written extensively about the benefits of a cloud-based phone system in the past so you can check out our other blogs for more information on that topic.

Interested in a New Phone Service? Speak to Elite Group.

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At Elite Group, we have decades of combined experience in helping businesses move forward with new technologies, including hosted telephony solutions. If you think a hosted telephone system is the right option for you, get in touch with Elite Group today. Our experts are ready to help you make the next move, make the most out of your business phone system and stay ahead of outdated tech.