Every business phone system does the same basic job: it routes calls to the right desk, takes
voicemail and gives callers a menu. The big decision is where the system lives. A hosted PBX
runs in the cloud and your provider looks after it. An on-premise PBX is a piece of equipment in
your office that you own.
Both are good choices for the right business. Here is how they compare.
What is a PBX?
PBX stands for private branch exchange. It is the switchboard behind your business phones: it
gives each person an extension, transfers calls, runs the auto attendant (“press 1 for sales”) and
connects your office to the outside phone network.
Hosted PBX: the phone system in the cloud
With a hosted PBX, the switchboard runs in your provider’s data centre. Your desk
phones, softphones and mobile apps connect to it over the internet.
Why businesses choose it
- Low upfront cost. There is no phone system hardware to buy; you pay a monthly fee per user.
- Easy to scale. Adding a new hire, a second location or extra lines is a configuration change,
not an installation. - Work from anywhere. Staff can take their office extension home, to a job site or on the road.
- Less to maintain. Updates and the hardware behind the service are the provider’s job.
What to consider
- It depends on your internet connection. A solid, business-grade connection matters, and a backup
plan for outages (such as forwarding calls to mobiles) is worth setting up. - Monthly costs continue for as long as you use the service.
On-premise PBX: a system you own
An on-premise PBX is installed in your building, usually in a comms room or
cabinet, and connects to the phone network through phone lines or SIP trunks.
Why businesses choose it
- You own it. After the purchase, ongoing costs are mainly your call charges.
- Internal calling keeps working even if the internet goes down, because the system is on site.
- Control and customisation. Call data and configuration stay in your building, and features can
be tailored closely to how you work.
What to consider
- A higher upfront investment in hardware and installation.
- Maintenance, repairs and eventual replacement are your responsibility, so a reliable local service
partner matters. - Adding remote workers or new sites usually takes more planning than with a hosted system.
Side by side
| Hosted PBX | On-premise PBX | |
|---|---|---|
| Upfront cost | Low | Higher |
| Ongoing cost | Monthly per user | Mainly call charges plus maintenance |
| Adding users | Quick and simple | Possible, may need hardware |
| Remote and hybrid work | Built in | Needs extra setup |
| During an internet outage | Calls need a fallback plan | Internal calls keep working |
| Who maintains it | Provider | You, with your service partner |
Which one is right for you?
A hosted PBX usually suits businesses that are growing, have staff working from several places,
or would rather have a predictable monthly cost than a capital purchase.
An on-premise PBX usually suits businesses that plan to stay put for the long term, want to
own their equipment, or need their phones to keep working inside the building regardless of the
internet connection.
Plenty of businesses fall somewhere in between, and the right answer depends on how many people you
have, how they work and what you already have installed.
Talk to a local expert
Intra Systems has installed and supported business phone systems across Vancouver and the Lower
Mainland since 1990, and we work with both hosted and on-premise systems. Our technicians are local,
so help is on site when you need it.
Not sure which way to go? Request a quote or contact us and we’ll
help you compare the options for your office.