Hosted PBX

Diagram & Operation



In a hosted PBX, incoming business calls are answered on the service provider's hosted PBX equipment. Because the cost of this equipment is shared over many users, hosted systems can have some of the most complete and feature-rich systems available in the market. Callers place calls from any phone, and the calls are routed over the Public Switched Telephone Network (PSTN) to the hosted PBX system. The hosted system answers the calls with a recorded greeting, plays a menu of connection options to the callers, and then routes the call to appropriate employee extension or to a holding queue (ACD queue or hunt group) for a department, such as sales or support.

As the call is routed forward from the hosted PBX equipment, an outgoing call is made over the PSTN to the specific phone number of the employee that the caller is trying to reach. In a premise-based PBX system, each extension in the system is associated with a specific telephone, usually a desk phone somewhere in the office. In a hosted system, each extension is associated with a particular person. This person can take the call on any phone, anywhere in the world. Employees typically can manage their own extensions, and enter any phone number - or even a list of phone numbers in systems with follow-me calling - where they can be reached. This allows employees to work anywhere - in the office, at a branch office, on the road, or from a home office - and seamlessly receive business calls as though they were in a single office location. This ability to empower distributed employees is the single biggest difference between hosted PBX systems and premise-based equipment.

An incoming call to a company employing a hosted PBX service is made up of two separate calls (legs) over the PSTN. The first (incoming) leg occurs when the call is answered by the hosted PBX equipment. The second (outgoing) leg happens when the call is routed out of the PBX system and picked up by an extension owner. Calls to voice mail or kept on hold are made up of only the incoming leg. Per-minute charges for incoming phone calls have to account for both of these call "legs," although some vendors are now offering "single-leg" billing plans for which only the incoming leg is billed.

Callers that know the extension number of the employee they want to reach simply enter that number and the system places a call to the phone number(s) that the employee has currently designated as the place where he wants to receive calls. Usually, the employee can change this designation at any time and work from an alternate location.

When callers know what department they want but don't have the name or extension number for a particular individual, they usually have the option to be sent to a holding queue to wait for the next available agent (employee) to take the call. Many low-end systems do not offer any type of holding queue, and callers must know who they want to speak with before they call. Other low-end systems send callers to a "hunt group" - a list of phone numbers to try and find someone available. Hunt groups usually have the drawback that every phone number must be tried, in the same order each time, in an attempt to find an employee that can take the call. In such cases, the first extension on the hunt list usually gets swamped with calls while other extensions are used only when there is a heavy load. Another disadvantage of hunt groups is the time it takes to try each extension to find one that isn't busy and has someone ready to pick up the phone.

Higher-end hosted PBX systems employ a variety of techniques to assure that calls to a holding queue are answered more efficiently. The most prevalent approach is through the use of Automatic Call Distribution (ACD) queues. A system with ACD queuing keeps track of which employees are already taking calls and how long it has been since each person finished prior calls. Incoming calls are put into the queue waiting for the next available employee and are routed automatically to the employee that has been off the phone the longest. ACD queuing evenly distributes calls to employees while insuring a minimum wait time for each caller on hold. ACD queuing typically adds little or no cost to the deployment of a hosted PBX, as the hosting company either has this technology in its systems or it does not. However, most hosted PBX providers claim they have ACD queuing when all the really have is hunt groups, sometimes modified to randomize calls but not really ACD queuing. Serious businesses usually need the advantages of true ACD queuing, whether in premise-based equipment or in a hosted PBX.

Other definitions - creating market confusion

As the market continues to evolve, several other terms have been confused with the term "Hosted PBX" - here are a few other definitions you should know:

Hosted PBX Strengths