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Pros and Cons of Hosted Phone Systems

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Remember when you had to allocate capital expenditure for private branch exchange systems? Well, guess what, those days are over. The virtual network can practically do anything and everything a physical system can without the need to be IN the office to use it. The hosted phone system will sit in a data center (or more, depending on who the supplier is) and only require an internet connection to access the service.


Small businesses enjoy significant cost savings by just shifting to a virtual system. First off, you don’t need to buy any physical equipment. It is ideal for all the smaller organisations and companies for whom a PBX installation on site might not be affordable, or practical.

Also, the fixed monthly costs for telephony services help the budget efficiently with minimal set-up costs for administrative or additional users and maintenance fees. The service agreements usually cover repairs. You no longer have to pay for costly office premises to present an expert image to the clients since hosted systems can also be used remotely from offices and homes, giving the impression of larger organisations. Not to mention a local number can help with your marketing strategy and targeting for specific areas. Buying local is a thing, right?


One of the drawbacks of a hosted system is the low call quality caused by time lag and signal interference when a call transfers to mobile phones. A VoIP system needs internet access to operate, which means that you may have to experience a disruption of your services beyond the control of a service provider in cases of any outages. These products do run over Wi-Fi, 3G and 4G – but the quality of the call does depend on the strength of the service in the area, perhaps the condition of the device itself, or even the specific location of it being used – anyone had to hang out of a window to get signal because of the walls?

When you agree with a service provider, you can even arrange for the initial contract period. While some service providers waive this requirement, you usually get a better estimate if you sign up for a fixed term. A set monthly cost is quite beneficial, but only in the short term. Over time the total costs of ownership can increase because you never acquire full possessions of the system if you opt for a license/hosted based subscription model.

We all know how convenient Office 365 is with keeping teams efficient, managing costs & keeping the software up to date – this also applies to the hosted license model.

More information on our 8x8 hosted solution
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