Image of a person hand holding a phone and other technology devices
April 16, 2015
by Dror Mei-Tal

When it’s time to upgrade your phone system, the first thing you need to decide on is whether to buy another legacy (“premise”) box or convert to a cloud-based, “hosted” PBX solution.

A legacy phone system is a computer box located at the company’s office and is connected to the individual phones. Companies with multiple locations require multiple devices. Premise devices are dependent on the number of users and the number of outside lines required to make outbound calls. In addition, legacy phone systems require expensive hardware cards, depending on the size of the company. Any increase in the number of users after the initial purchase may require an additional costly upgrade.

What's different about Hosted PBX?

Contrary to the legacy phone system, the hosted PBX solution does not require a premise box. Phone units connect to the carrier’s server though a special connection or through the Internet. Features provided through the phone provider are usually equal or better than those on the legacy phone system. Additionally, companies can start with only a few phones and add more as they grow without expensive costs to upgrade.

Costs of maintenance

Another important consideration is the cost of maintenance plans on the legacy phone system.  Any modification to the settings on the legacy system may also require a technician to visit your site. It is estimated that legacy phone system owners require at least two of these kinds of service visits a year.

Difference in features

Legacy phone systems usually come with a basic set of features. Many times during the life of the system, new communications features become available. Unfortunately, most legacy system owners are stuck with the original software version and will not enjoy the new features until they buy a new system or upgrade the existing one. Also, unless you have an expert on staff, it is not easy to manage this system, especially for companies with multiple locations.

Hosted PBX has automatic upgrades

In contrast, the hosted PBX solution is managed by the provider. All software updates are transmitted to the phones by the provider on a regular basis. Users can benefit from new features that become available after the initial purchase of the system and throughout the full term of the service.  The hosted solution also provides an easy to use web interface that can be managed from any location.

Business continuity

Business continuity is another benefit of the hosted PBX service. Since the phones are not dependent on a local box, for instance in case of a power outage, the business continues to receive calls from customers.


By the year 2020, more than 50% of the business market is expected to convert from a legacy phone system to a fully managed hosted PBX solution. The ease of use, lower total cost of ownership and the great features make the hosted PBX an ideal solution for small to midsize companies. 

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