Hosted Phone System – What Is It? How It Works And Why Do You Need It?

Talking about a business phone system, there are several choices that every business needs to consider. While some prefer sticking to the legacy-based traditional phone lines, others seek solace in a modern cloud-based phone system. The fact that traditional phone lines are limited in features and functionality, organizations are now switching to unified communication solutions.

One of the commonly adopted phone systems is a hosted phone system. Many leaders confuse the term with VoIP phone systems, yet in reality, these two are mildly different in definition and approach. A VoIP phone system indicates routing calls over the internet technology.

Unlike the traditional forms of telephony that use switching networks to transfer calls, communication using the VoIP system is transferred over the internet.

Hosted phones act like an enterprise phone system and similar to VoIP service, are routed over the internet. The difference between the two is in the fact that hosted systems do not require the installation of dedicated hardware in the enterprise infrastructure. What this implies is that the entire setup is located in a data center apart from your office location.

How Does Hosted Phone System Work?

In its simplest form, a hosted phone system suggests that the architecture is situated over the cloud, and organizations are like subscribers to this system. Depending upon the chosen plan, they can lease a certain amount of service on a monthly basis. All you need is a business phone, which could be any business phone which is virtually connected with the server.

It could either be a plug and play or simply an app that logs you inside the server. All of the backend maintenance and monitoring work is executed and taken care of by the service provider, easing enterprises to focus on other important tasks.

So, you as a leader have nothing to worry about server failure or network interruption. It is the provider who would adhere to all the problems and provide a solution at the earliest.

Advantages of Hosted Phone System

  • Saves Money

Earlier, when setting up a business phone system, you required a telephone, some wires, and additional hardware to map the setup. All of this mandated you to spend a handful amount of money just to get the phone started. Also, a dedicated workspace was a must as you had to install your hardware.

With a cloud-based phone system, you no longer need to buy cords or cables, let alone a phone. These systems are hosted on a different platform and the only thing needed is a mobile phone with internet connectivity.

For organizations that fail to bear the installation cost, virtual phones are an ideal option.

  • Facilitate Cross Border Communication

With traditional phone lines, calling your customers beyond boundaries and overseas might cost you much. Not to mention the poor call quality that would become the cause of missed deals. Hosted systems use a virtual phone number that is purchased on a monthly basis.

No matter what is the location of the receiver, you will never have to pay more from your pocket. Also, the call quality is a lot better as compared to the in-house legacy telephone lines.

  • Remote Connectivity

Gone are the days when employees had to serve the 10-hour period accepting and answering calls of leads and customers. The enterprise phone system is so designed that it can be accessed anywhere and at any time of the day. Agents need to log in to the system and start working right there. Whether in a can or at home, as long as you possess an internet-connected device, communicating through such phones is pretty easy.

  • Employee-Driven

Hosted phones sway off the need to remain attached to the devices throughout the day. Instead, it gives your employees and sales agents the ease to work at their own convenience. Imagine a situation when a customer agent is on the field and there is a customer calling the agent.

Had there been the age-old telephone systems, there wouldn’t be anyone to address the concerns of the customer. It might so happen that the company loses a potential lead. On the other hand, with modern communication tools, the agents can remotely connect to customers and solve their queries at the earliest.

  • No Technical Assistance Needed

With a hosted phone system, organizations no longer need to hire experts to manage and monitor their phone system. In fact, the service providers offer a 24/7 support facility to cater to the network problems rendering significant solutions without being detrimental to organizational interaction.


Apart from the above, a hosted phone system is a blend of features. Right from IVR facility to emailing voice messages, forwarding and transferring calls to fax, the hosted phones encompass all. In case, you are a manager or a leader and looking for solutions for your organization’s communication, considering a hosted phone system might serve your purpose.

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