When evaluating the network for your IP Telephony deployment, you need to be aware of some of the differences between a hosted PBX and an onsite-PBX.

In order to simplify this, we will break the network down into two separate concepts: The Local, onsite network (or LAN), and the wide-area, external network (or WAN, typically provided across the Internet).


Hosted PBX

In the case of a hosted PBX, all of the PBX intelligence will be located offsite. The only things located at the site will be the telephone sets, and the network components required to connect those sets through the internet to the hosted system.

Advantages of a Hosted PBX

  • No server onsite to maintain
  • Higher-quality server environment (redundant power, HVAC, internet, etc)
  • Software updates usually included
  • OPEX generally more popular with C-level execs
  • Onsite requirements can usually be handled by network team

Disadvantages of a Hosted PBX

  • Recurring costs – more expensive in the long term
  • Bandwidth requirements – desk-to-desk calls still have to pass through data center


On-site PBX

An on-site PBX provides all the services to the phone sets from the premises. Sets do not even require internet access, as all their requirements (provisioning files, time and date, firmware updates, security) can be handled through the PBX system.

Advantages of an On-site PBX

  • Once it’s paid for, it only needs to be maintained
  • Physical control of hardware
  • Easier termination of legacy PSTN circuits
  • Typically lower long-term costs
  • Lower bandwidth requirements

Disadvantages of an On-site PBX

  • Requires available technical team to maintain system
  • Server environment may require construction and other costs
  • CAPEX not always an easy sell to C-level execs


In both cases—Hosted or On-site—the underlying technologies are essentially the same. We use the LAN to replace the traditional telephone wiring, and the WAN to replace the traditional carrier circuit (PRI, POTS lines, etc). For hosted, we additionally handle PBX connections from the sets in the WAN as well.

If you have any questions about making sense of IP Telephony, please feel free to reach out and speak to us.

The next blog in this series will look at the onsite network environment, and the considerations for a Converged versus Dedicated LAN.

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