‘Hosted’ and ‘cloud-based’ phone systems are not the same but this can get confused as sometimes these terms are used interchangeably and therefore, misleadingly.

What are the differences?

Hosted telephony

With a hosted telephony system a business utilises software and hardware that’s set-up and reserved for their use only. This means no external call traffic will disrupt performance and the bandwidth can be altered for that company’s needs. It’s a bespoke system solely for them.

As part of this, a business pays for the software and hardware. If the resource reaches capacity there may be extra charges and if not all the resource is used, it cannot be carried over into the next month.

Typically with hosted systems, they are managed by the provider but you can also get non-managed hosted systems.

Cloud phone system

Alternatively, cloud phone systems utilise shared resources that multiple businesses may be able to access. Software on a server will run for several businesses and excess capacity can be shared across all tenants when usage peaks. Businesses can also easily scale up or down by adding and deleting users and applications.

In this system, businesses rent the cloud system, meaning all maintenance and management costs and responsibilities fall with the provider. This can often provide great peace of mind for companies as they’re provided with 24/7 support.

What does this mean for my business?

When you’re deciding which option best suits your own infrastructure and finance plans, it’s important to understand the differences between hosted and cloud-based phone systems and to discuss this with your provider.

The hosted system was implemented before the popularity of cloud-based systems and for many is still the most appropriate option because of its ease of use, capabilities and the ongoing service and support available from the provider.