So, your small business needs a new phone system with some features to bring your company out of the stone age. Just something simple, like having your calls follow you to your mobile phone, would make a huge difference in productivity! If this is the boat you find yourself in, chances are that it's also a good time to evaluate the service from your phone company too. Are you really getting the most bang for your buck?
Let's take a step back and define what we're talking about when it comes to small business communications.
What is a business phone system, anyway?
The most common words you'll hear used to describe a business phone system are PBX, which stands for "Private Branch Exchange;" and "key system," which is like a PBX's little brother. If you push a button for line 1 or 2 to get a dial tone, or pick up a call ringing on a specific line, you've got a key system. If you've got an extension on your phone and you can get multiple calls on that same extension, you've got a PBX. A PBX shares all the phone lines coming into it between all the phones in the office, where a key system has a 1 to 1 map from phone lines to lines on the system- a human- you, need to choose which line you wish to interact with. On a PBX, the PBX handles all of that.
But no matter which one you're dealing with, the phone system is the "brain" that all the phones in your office are connected to. It's the thing that handles your voicemail, your automated greetings, and what happens when you put a call on hold.
Alright, I get the business phone system, but what is phone service?
The phone system "brain" needs to be connected to the outside world, and that happens with phone service. Without phone service, a phone in an office with a phone system would be able to call other phones in the office, but it wouldn't be able to call out for pizza. And that's no fun. So businesses have contracts for service with voice service providers.
Image courtesy of flickr user Maxwell GS
VoIP phone service just means that instead of traveling over telephone lines, the phone call is carried over the internet. There are voice service providers that specialize in VoIP service. Among other things, VoIP can save you money because internet is generally cheaper than traditional phone service.
Tying it all together with a Hosted PBX
A hosted PBX means that instead of the phone system "brain" being at your office, it's hosted "in the cloud" (fancy marketing speak for "internet.") and since you're not going to be plugging phone lines from your phone company into a brain you don't have physical access to, the guys hosting the PBX also provide your phone service via VoIP.
Because the service and system are bundled, you can save a lot more money- you're not initiating a contract with 2 companies- and your support is often better since the hosted PBX provider controls and clearly understands both the features of the phone system and the service that's dealing with your phone calls.