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Hosted PBX generally provides the same features and services as a traditional private branch exchange system, but hosted PBX eliminates the need for building and managing an in-house PBX system. The service provider, typically a telecommunications provider, Internet/cloud service provider builds and hosts the PBX system on its premises. The hosted PBX is connected with customer/client telephone systems through IP-based networks and/or the Internet. Once a call is received, the hosted PBX routes that call to the corresponding client. Similarly, the client/customer connects to the hosted PBX using IP-based phones in order to make a call.

Hosted PBX is often confused with virtual PBX but the former provides more call control features and services than the latter, particularly in the sense that it’s able to make both inbound and outbound calls.

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