The difference between hosted IP PBX and non-hosted IP PBX.

There are several differences between hosted IP PBX and non-hosted IP PBX. Choosing which one to take actually depends on your needs or your preferences


Comparing the advantages and disadvantages of hosted VoIP phone system versus an in-house or non-hosted VoIP phone system or IP-PBX, there are actually a lot of distinctive differences and uniqueness in each one of them. Having an overview of an IP-PBX, knowing what is hosted and non-hosted, their uses and functionality can help you better understand the system in its entirety.

If you ever decide to move to an IP PBX based VoIP phone system, regardless if it is a hosted or non-hosted type is actually an excellent choice; however, a necessary step is for you to understand the difference between the two as this be a factor for decision-making which can also determine the level of your satisfaction. As the open source Asterisk becomes more widely used as the PBX software, it minimizes the costs for both hosted VoIP providers and a lot of IP-PBX developers. Ultimately, it provides substantial benefits for users as they enjoy using the latest technologies in VoIP at lowest costs but with more features.

What is a hosted IP-PBX or internet-based phone system?

A hosted IP PBX is a phone system whereby the VoIP provider manages all the hardware, equipments and other technologies supporting the whole system within their own site. In other words, they house everything that makes the whole system work; therefore, the subscriber or the user doesn’t need much hardware in his home or office. It is commonly known as a hosted VoIP, hosted PBX or virtual PBX. In a hosted IP PBX setup, the only equipments the user needs are IP phones (if they choose a handset type of phone) and router. These IP phones are plug into their router in their office or site while all calls, signals, connections and features are managed by the provider’s in-house IP PBX servers. The subscriber/user is usually charged on a monthly basis for the services the VoIP provider is providing.

The image below shows a diagram of a hosted IP PBX or an internet-based phone system:


What is a non-hosted IP PBX or a premise-based phone system?

The structure of a non-hosted IP PBX or premise-based phone system is just like a traditional PBX where there are several hardware or devices located in the office or the premise that makes it possible for the phone system to function. In most cases, you can see several devices such a phone closet or a computer equipment room but uses an IP routing. The phone system takes place from the VoIP phone handset to the IP PBX server over your local area network. Calls will pass through a public switch telephone network (PSTN) or through Voice over Internet Protocol (VoIP) with SIP trunking or can be a combination of both. The traditional connections can be your standard copper lines or a T1 with PRI circuit. In most cases, the IP PBX is purchased from a telecommunications hardware company which usually connects your system to your provider through gateway cards. These providers are usually the ones who are currently handling your calls. This can also be possible if a SIP trunk is configured to connect with an internet service telephone provider (ISTP).


The image below shows a diagram of a non-hosted IP PBX or a premise-based phone system: