Being at the center of the modern communication scene, VoIP has come a long way, evolving and taking many forms. One of them includes its hosted form, which includes everything a business needs regarding telecommunications.

One more thing: We all use it daily, especially for business, with barely a thought, and we have made it a major part of our daily lives. Well, you may already know about Voice over Internet Protocol (VoIP) as a whole concept. So what’s so different with ‘Hosted VoIP?’

Here we are with this article; you will learn everything about hosted VoIP, its benefits, what factors to look for when choosing, and how it is different from its on-site version.

Let’s get started.

What Is Hosted VoIP?

What Is Hosted VoIP

A simple explanation would be: Hosted VoIP refers to an internet-based telephony communication service made available and operated by a third-party provider to a business or client. As a service, it provides communications solutions using hardware located outside of the users’ environment, allowing users to access the service without needing to install expensive on-premises equipment.

How Does Hosted VoIP Work?

To understand the workings of a hosted VoIP phone system, you first have to grasp that, unlike traditional telephony systems, these do not require any dedicated hardware or wired infrastructure; hosted VoIP solutions completely rely on the Internet to allow telecommunication through them.

Now, back to the main point: When a call is made through a hosted cloud telephony phone system, it is first converted into digital data packets and then sent to the receiver via the Internet. The server of the VoIP provider processes and manages the call, routing, and connecting it to its appropriate recipient all by itself.

Here, the users do nothing except make and receive calls, just like making regular calls, as the phone system does the hard work in the background, as always. All that is needed for it to work is a decent Internet connection and a softphone (app) to access business VoIP services.

Hosted VoIP vs. On-Premise VoIP

Having learned all that, you might be thinking, well, that’s what all VoIP phone systems do! The truth is there is a huge difference, and to make you familiar with every aspect, here is a comparison table between hosted and on-premise VoIP systems:

FactorsHosted VoIPOn-Premise VoIP
DeploymentServers and software hosted by a third-party providerServers and software installed and maintained on-site
Upfront CostLow (only monthly subscription fees)High (hardware and software purchase or lease)
Ongoing CostPredictable monthly feesCan vary depending on usage and maintenance needs
ScalabilityEasy to add or remove users and features on the flyRequires additional hardware and configuration for scaling
MaintenanceProvider handles all updates and maintenanceIT team or third-party service provider responsible for maintenance
ControlLess control over server and network configurationMore control over server and network configuration
SecurityRelies on the provider’s security measuresCan implement custom security measures on-site
ReliabilityDepending on the provider’s network and infrastructureCan implement redundancy and backups on-site
FeaturesWide range of features offered by providerCan choose specific features to install on-site
MobilityUsers can make and receive calls anywhere with internet accessLimited to the on-site network unless the additional configuration is done
Cost-effectivenessIt can be more cost-effective for low-volume users or businesses with limited IT resources.It can be more cost-effective for high-volume users or businesses with existing IT infrastructure.

With all the similarities and differences between hosted VoIP phones and on-premise VoIP phones outlined in this table, we hope you have been able to gain some clarity. Moving on!

How Can Your Business Phone System Benefit from Hosted VoIP?

If you are a business owner looking to upgrade your business phone system and thinking of switching to a hosted phone system, you should do it now! Why?- the answer is simple: all because of the benefits it has to offer to businesses of all types and sizes.

How Can Your Business Phone System Benefit from Hosted VoIP

To make you a bit more familiar with this concept, here’s how a hosted voice-over-Internet phone system can benefit your business:

Cost Effectiveness

It is said that hosted cloud phone systems can help significantly reduce phone costs, with the potential of saving up to 50% in communication bills for businesses. And for small firms, it becomes even better by giving them an opportunity to reduce implementation costs by up to 90% compared to traditional landline solutions.

Easy to Use and Implement

Using hosted virtual telephony solutions is fairly easy and requires nearly no installation of additional hardware, pieces of equipment, or on-site maintenance, as it handles much of the support and maintenance. To use a hosted virtual phone system, all you need is a subscription plan and a device that supports softphone technology.

Mobility and Scalability

Hosted VoIP systems, their features & functionalities can be easily scaled up or down based on needs. That is what businesses have always desired, and voice-over IP systems give them that. Additionally, these solutions are extremely mobile as their work depends entirely on the Internet so that anyone can use them from anywhere. Thus making it remote-work friendly.

Better Features and Functionality

The last form of its benefits is the potential to provide better functionality and features. Hosted VoIP offers a wide range of additional features, such as voicemails, call recording, video calling, instant messaging, and more, which can improve productivity. With hosted VoIP providers, businesses can obtain virtual numbers to set up customer support centers or just to simplify communication between remote teams and departments.

Essential Factors to Look for in a Hosted VoIP Solution for a Business

Essential Factors to Look for in a Hosted VoIP Solution for a Business

When choosing a hosted business virtual phone system, there’s a multitude of things you need to go through, and looking for the essential features is one of the primary ones. As a way to assist you, here is a list of all the essential elements to look for:


As a business owner, you should definitely look for must-have features for business phone systems and make sure the service provider offers all of those. Some of the primary ones are call routing, call forwarding, call analytics, ACD, IVR, and call transfer. These features can enhance your organization’s communication capabilities and improve overall productivity.


The next thing to take into account is the reliability of the solution provider. For this, build a list of providers you deem good enough, go to review sites to read real customer reviews about each, and then choose one. A reliable VoIP solution from a good provider can undoubtedly enhance the level of interactions within a business.


The next thing is to go over the security details, as they are the most important considerations when choosing a VoIP solution. This is a no-brainer; simply opt for a solution with robust encryption protocols and data storage practices to protect your sensitive business information. Be sure to do this correctly, as this can literally make or break partnerships.

Customer support

The final step is to get an in-depth insight into the customer support of the provider offering the VoIP solution. It is one of the most crucial factors to consider beforehand. Just prioritize providers with strong credibility for responsive and helpful customer support to ensure smooth sailing throughout your VoIP journey.

Closing Thoughts

Summing everything up, in this blog, we covered all about hosted VoIP solutions and their working. We also discussed how they differ from on-premise alternatives, how they can be beneficial for businesses, and what factors to look into when choosing one.

Hosted VoIP systems are one of the many contributing factors that are revolutionizing the telecommunication landscape through their benefits and capabilities, especially for companies. And for that reason, businesses should and must consider employing these in their communication systems.


Should I use VoIP for my business?

As a business owner, you should definitely consider switching to a VoIP service for its benefits, like exceptional cost savings, enhanced flexibility & scalability of the telephony system, ease of use, reliability, and access to new innovative features that far outweigh its few and inconsiderable drawbacks.

Can I host my own VoIP?

Yes, of course, you can host a VoIP on your own! However, you must be aware that it is not like setting up a website or email server, and it is not a simple task; it requires some technical knowledge.

If you are able to invest time and money in the software, hardware, and other things, it can prove to be a rewarding experience, giving you complete control over your communication infrastructure and potentially saving you money.

Why are companies turning to hosted VoIP?

Hosted VoIPs present a huge number of benefits that companies just cannot ignore. Here are some of the compelling factors behind that reason:

  • No need for traditional wired connections for local phone numbers.
  • It offers significant cost savings as no hardware installation is required.
  • VoIP as a platform can handle all your communication needs: calls, texts, videos, you name it.
  • With VoIP, your data is protected with encryption and security features.
  • Its usage can be scaled as per needs.
  • It can be used on almost all platforms.

Why is VoIP important to a business?

Considering modern requirements, Voice over Internet Protocol has become an important part of the communication systems of almost all businesses to fulfill all of those. That is for many reasons, the first one being Cost Savings, the second one being enhanced Flexibility and Mobility of the telephony system, the third being its innate Scalable and Secure nature, and the last one being its advanced features that it always has had.

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