What is hosted telephony?

Posted by SAS on Jan 7, 2019 03:44:00 PM

What is Hosted Telephony?

Hosted Telephony refers, quite simply, to a telephone system hosted in the cloud. It will be IP based and will support traditional functionality such as transferring calls, call diversion and perhaps more enhanced collaboration functionality.

Let’s get to grips with the common aliases of hosted telephony. Below are examples of other names that hosted telephony is known as. It’s easy to feel uncomfortable when digesting all these new terms. Luckily, they all mean the same thing. Here’s just a few to get you started:

  • Cloud PBX
  • Cloud Phone System
  • Hosted Voice
  • Hosted PBX
  • Cloud Telephony
  • VoIP
  • Hosted VoIP
  • Various other in-house favourites

By telephony, we are referring to traditional phone system functionality such as transferring calls, call diversion or more enhanced functionality like call flipping to a mobile. The hosted element refers to, quite simply, a telephone system hosted in a cloud.

Types of Phone System

Over time, we’ve seen telephone systems installed on-premises, hosted in a data centre by a client or more commonly hosted by a vendor in their secure cloud infrastructure. It’s important to understand the history and benefits of each type of deployment before progression into hosted telephony.

On-Premises: installed in a customer’s location, usually a comms cabinet, and attached to analogue or ISDN lines installed by a BT Openreach engineer. Typical players in this market were Avaya, Mitel and Cisco. Largely expensive due to the phone line rental and lack of scalability when installed on-site, on-premises installations are being phased out.

Customer Hosted: rather than connecting to physical phone lines, phone systems could be installed into a data centre, if a customer owned or rented one, and were attached to SIP trunks which carried the call traffic over the internet. This provided cost savings on the phone line rental but was reliant on customer’s budgeting for data centre space and investing in specialist technical resource. Like on-premises solutions though, customer hosted solutions are less common with a more cost-effective, scalable solution available.

Hosted Telephony: removing the need for on-site equipment, or the need for a data centre, the phone system is hosted in the cloud by a vendor with their own core infrastructure supporting any number of service providers or direct clients. As cloud technology has become tried and tested, innovation has led to software integrations with phone systems to transform buying a new phone system into transforming a business. You can add on functionality to apps like Salesforce and Skype for Business to introduce click to dial, screen popping and automatic record updating.

This type of phone system implementation is viewed as the primary deployment model for any new phone system.  

How does Hosted Telephony work?

Removing the need for telephone lines, hosted telephony runs over SIP trunks. Think of SIP trunks as virtual phone lines. Instead of routing over copper cables underground, call traffic is transmitted over the internet as data. That data either travels from IP source to IP destination or breaks out to the PSTN for non-IP calls.

This could be another handset on your hosted telephony estate (IP). It could be a landline in another country (non-IP).  The concept of a phone call doesn’t change. It simply gets routed over the internet, in a secure, efficient manner.

The SIP trunks themselves are configured within the infrastructure by the vendor. This removes the need for a customer to install or configure any equipment. You could think of it as a data centre housing everything on one huge telephone system, with a separate partition for each customer.

Why use Hosted Telephony?

Unlike traditional on-premises deployments, hosted telephony can scale up and down as you require it to. This removes the need for installation or a site visit. This makes rapid configuration and flexible “as-a-Service" models. The SIP technology powering hosted telephony, gets configured for the desired number of concurrent calls. This ensures you are never overpaying for unused telephone lines.

Scalability and cost are just the tip of iceberg when it comes to exploring the benefits of hosted telephony. Without going into all the reasons why you should use hosted telephony, headlines items include:

  • Flexibility
  • Scalability
  • Cost Reduction
  • Hundreds of Telephony Features
  • Free Calls Between Sites
  • Security
  • Productivity

Customers are no longer talking to us about phones, features and buttons. They’re now focussing on strategic decisions and working out how to get the benefits.  That means there are several new topics that we’re now talking about.

We dig much deeper into things like HD audio quality, web conferencing and Unified Comms in other posts about Why Hosted Voice and Cloud Phone System features to look out for.

As with most cloud technologies, you are making a long-term investment. This means it’s crucial that the purchase is scalable, and scalable cost-effectively. You’ll need to consider a few cost implications, including considerations around how many licences and channels you will need and whether there are things you can discard.

Where to start with Hosted Telephony?

Part of being an IT owner of hosted telephony is intimately getting to know your end users. The process of meeting their needs has changed considerably over the last few years. Understanding the business goals, individual departments’ quirky ways of working and the ins and outs of the tech support queue are part and parcel of implementing hosted telephony. It’s usually unhelpful to wait until you’ve chosen a vendor before you kick off conversations about these topics with the business and the supplier.  It’s best to start them early and keep them focussed on the business and the end users.

With hosted telephony, there is a lot to learn and many different options available. The best place to start with hosted telephony, like most things, is at the beginning.

  • Have you captured your requirements, involving representation from all stakeholders in your business?
  • Do you know the defined budget you are working to?
  • Have you conducted an audit of the absolute must-have features that are mission critical and in use all day, every day?

At this stage, the answer to these questions is often no. And that’s okay. We’ll be continuing this blog series and answering these questions for you, and you can view the next blog in the series here.


If you would like to find out more, then you may like to read one of our other blogs or downloads, or request a conversation with one of our consultants. We are always happy to discuss, without obligation.