Hosted VoIP is another term for a hosted private branch exchange (or PBX) that uses voice over internet protocol (VoIP) technology. The term ‘hosted’ refers to the fact that the hardware to implement this is at an off-site location provided by a third party, often using cloud technology. An office can have VoIP telephone service that power the phones in their office while the PBX can be hosted at their VoIP provider’s data center, thus the term: hosted VoIP.
There are many benefits to hosted VoIP rather than using a traditional phone system or an on-premises VoIP system. The main benefit is cost since a hosted system costs much less than implementing an on-premises system. Usually there are no set-up fees for a hosted system and the user is only charged a monthly usage fee thus they become operational expenditure rather than capital expenditure which make them an attractive option for businesses.