Which System Will Work Best For Your Business: Hosted PBX or SIP Trunking?

hosted PBX vs SIP Trunking

Hosted PBX and SIP trunking are two of the most common terms that we hear when we talk about business VoIP (Voice Over Internet Protocol). In this blog, you will get to know about hosted PBX and SIP trunking and which option will be the best for your business. 

Hosted PBX

The traditional PBX (Private Branch Exchange) system is the one that relies on premise-based equipment to manage internal and external calls through the PSTN (Public Switched Telephone Network). On the other hand, a hosted PBX system is a telephone switching system that is accessible over a network in the cloud. Since hosted PBX is a cloud-based system, access to this telephony solution takes place completely over the internet, thus eliminating the costs related to hardware and software purchase, expensive infrastructure, training, and maintenance costs.  Moreover, cloud PBX platforms can be deployed swiftly without additional configuration.

Hosted PBX system simplifies and streamlines standard PBX phone systems by managing calls via on offsite, third-party Internet Telephony Service Provider, (ITSP).

Benefits of hosted PBX

As mentioned above, hosted PBX can be deployed quickly and easily, most often within a day. Also, all the services and maintenance are offered by a third-party Internet Telephony Service Provider (ITSP). To start using hosted PBX VoIP communications services, users just require: 

  • IP connectivity
  • Internet connection

The key benefits of hosted PBX can be described as:

  1. With hosted PBX, there is no need for on-premises PBX (Private Branch Exchange) equipment. 
  2. Users need not worry about maintenance costs, PBX software upgrades, or service downtime.
  3. Hosted PBX offers various standard VoIP (Voice Over Internet Protocol) services, such as:
  • Managing and routing incoming calls
  • Handling call transfers and holds
  • Voicemail
  • Call recording
  • Conference calling
  • Automated messages

SIP Trunking

SIP or Session Initiation Protocol Trunking allows users to make their business’s existing, on-premise hardware function as a cloud-based phone system. It means that SIP trunk users can have access to advanced VoIP features. SIP trunking is a platform that directly links an existing on-site PBX system to the virtual network, bringing all the advanced VoIP features to the business phone system.  If you want to use SIP trunking, you need to buy its own on-site PBX and other relevant hardware. Besides, you have to take care of all the maintenance, upgrades, and restoration services related to your premise-based PBX system. These advanced responsibilities require an in-house IT staff and the purchase of additional hardware. 

Today, most of the companies that own on-premise PBX equipment make the switch to SIP trunking.  It allows users to add several telephone lines and access numerous communication channels concurrently without being dependent on separate structures for different types of communication. 

Benefits of SIP trunking

Without SIP (Session Initiation Protocol) in place, business communications don’t have to rely on separate structures of voice and data communication. Relying on an old system that can’t handle a large volume of calls can break down a company’s continuity. SIP trunking makes communication much faster and more reliable by offering several benefits, such as: 

  • Video conferencing
  • Instant call routing and recording
  • Multimedia messaging
  • Instantaneous data exchange

If a business already has PBX equipment in place, switching to SIP trunking becomes much easier. A switch to SIP trunking allows businesses to enjoy more features and improved telephone service as compared to traditional phone systems.

Difference between Hosted PBX and SIP Trunking

Below-mentioned are some of the key differences between hosted PBX vs SIP trunking, which will help you to understand the right option for your business. 

  1. One of the key differences between hosted PBX and SIP trunking is that hosted PBX is a business phone system that is managed and handled completely by an offsite third-party provider, while SIP trunking allows users to enjoy advanced VoIP phone system capabilities with their existing on-premise PBX equipment. 
  2. SIP Trunking works well with all the equipment and hardware that a business has already purchased, installed, and relies on their in-house IT team to upgrade and maintain. SIP trunking allows users to enjoy all the benefits of VoIP while using their physical phone system. On the other hand, Hosted PBX system offers an entirely new cloud-based VoIP phone system that is managed by an off-site third-party service provider. Hosted PBX users don’t need to have any existing physical on-premise PBX equipment. They also don’t require a dedicated in-house IT team to connect, upgrade, and maintain their VoIP phone service. 
  3. If we talk about the security factor, in the case of the hosted PBX, businesses usually rely on the quality of the third-party providers for security and privacy practices. On the other hand, with SIP trunking, businesses have total control over security strategies and privacy policies. 
  4. A hosted PBX system is the best option for SMBs with 50 or fewer employees that don’t require or can’t afford expensive premise-based PBX hardware and prefer hiring services of a third-party provider to manage their business phone system. Whereas, SIP trunking is the best suitable option for enterprise-level companies having more than 50 employees and having their own premise-based PBX hardware that needs more control over the business phone system. 
  5. When talking about geographical flexibility, hosted PBX systems are highly flexible and self-reliant. On the other hand, SIP trunking largely depends on licensing and support of the PBX platform.


Now as we know the difference between hosted PBX vs SIP Trunking, it’s time to choose the right service. Don’t get confused. Both services offer an advanced and reliable VoIP network. Also, both come with numerous features and benefits. Based on certain key conditions like the current size of your business, business expansion plans, whether you already have PBX equipment in place or not, the level of flexibility you require with your phone system, and other key requirements, you can choose either hosted PBX or SIP trunking.

Recent Posts