What is Hosted VoIP? A Quick Guide to Everything You Need to Know

Posted on April 19, 2023

Topics: Office Technology

What is Hosted VoIP? A Quick Guide to Everything You Need to Know

A phone system is critical to the operations of your business, but what is the best solution to invest in? If you have been looking into different phone systems, you may have come across the term hosted VoIP. 

Hosted VoIP, which offers a range of benefits over on-premise phone systems, can be the right solution for organizations of all sizes, but it depends on your unique needs and requirements. 

But not many know what it is or why it is gaining so much traction. That’s where this guide comes in. If you are new to the world of hosted VoIP, keep reading to find out everything you need to know:

What is Hosted VoIP? 

Hosted VoIP, or Voice over Internet Protocol, is a type of telephone service that is hosted by a third-party provider and delivered over the internet. It is a technology that has revolutionized the way businesses communicate, making it more efficient and cost-effective than ever before.

Unlike traditional phone systems that rely on physical hardware, hosted VoIP works by using the internet to transmit voice signals. The technology converts analog voice signals into digital data packets that can be transmitted over the internet. This means that businesses can make phone calls from anywhere in the world as long as they have a stable internet connection.

View our VOIP Offers

The Benefits of Hosted VoIP

There are many reasons businesses are switching to hosted VoIP: 

1. Cost Savings 

One of the biggest advantages of hosted VoIP is that it eliminates the need for businesses to maintain and upgrade physical hardware. Instead, the third-party provider is responsible for managing and maintaining the system. This not only saves businesses money, but it also frees up their IT staff to focus on more critical tasks. Additionally, because VoIP is transmitted over the internet, long-distance and international calls are often significantly cheaper than with traditional phone systems.

2. More Features 

Another significant benefit of hosted VoIP is that it offers a range of features that are not available with traditional phone systems. For example, businesses can use features such as call forwarding, voicemail transcription, and auto-attendant to streamline their communications and enhance their customer service.

3. Scalability

Hosted VoIP is also highly scalable, meaning that businesses can easily add or remove lines as their needs change. This makes it an ideal solution for small and medium-sized businesses that may have fluctuating communication needs.

4. Flexibility 

Hosted VoIP allows you to work from anywhere with an internet connection, as your phone system is hosted in the cloud. This means that you can use your office phone number no matter where you are and even transfer calls between your office phone and your mobile device.

5. Reliability 

Hosted VoIP systems are typically more reliable than traditional phone systems, as they are less prone to hardware failures and are backed up by redundant systems in the cloud. This means that you can be confident that your phone system will be up and running when you need it.

The Disadvantages of Hosted VoIP

There are some disadvantages to using hosted VoIP. These include:

1. Dependence on Internet Connection

Hosted VoIP relies on a stable and reliable internet connection to function properly. Any disruption in internet connectivity can cause call drops or poor voice quality.

Solution: If you have access to quality internet, this should not be an issue. 

2. Limited Control

With hosted VoIP, the service provider is responsible for managing the system, which means that users have limited control over the infrastructure and configurations. This can lead to restrictions on customizing features or implementing certain applications. 

Solution: This can be avoided by working with a trusted provider who works with their customers to optimize their hosted VoIP. 

3. Security Concerns

VoIP systems can be susceptible to hacking and cyber attacks, which can result in data theft, unauthorized access to confidential information, and call interception.

Solution: As is the case with any service or system, implementing strict security protocols and keeping systems up to date can prevent security breaches. 

4. Integration With Legacy Systems

If a business already has an existing legacy phone system, it may be challenging to integrate it with a hosted VoIP system, which can lead to additional costs and downtime.

Solution: Every business has unique needs. Vet your service providers and ask about integrations to be sure you are working with a team and a system that will provide you with the best possible service. 

5. Dependence on Service Provider

Hosted VoIP requires reliance on the service provider for support, maintenance, and updates, which can be problematic if the provider has poor customer service or goes out of business.

Solution: Find a trusted service provider with a history of great customer service. 

Features Available Through Hosted VoIP

In the benefits section, we mentioned that hosted VoIP has more features than traditional phone systems. Some of the many features available include: 

Sophisticated call management is one of the most important features of a hosted VoIP system. This includes call routing, which allows businesses to route calls to specific extensions or departments, ensuring that customers get connected to the right person quickly.

Call screening allows users to screen incoming calls, so they can decide whether or not to take the call.

Unlimited calling allows businesses to make as many calls as they want to anywhere in the world without worrying about per-minute charges or usage limits.

Auto attendant is a virtual receptionist that answers calls and directs callers to the appropriate department or extension. This helps businesses to improve customer service by ensuring that calls are answered promptly and efficiently.

Extension numbers and number changes allow businesses to set up extension numbers for different departments or employees, which makes it easier for callers to reach the right person. If a business needs to change its phone number, this can be done quickly and easily without any disruption to service.

Instant messaging is another feature that is becoming increasingly popular with hosted VoIP systems. This allows users to send text messages to each other within the system, which can be especially useful for businesses that need to communicate quickly and efficiently.

Voicemail is an essential feature of any phone system, and hosted VoIP systems are no exception. With hosted VoIP, voice mail messages can be delivered via text or email, making it easier for users to access and respond to messages.

Video conferencing is another feature that is becoming increasingly popular with hosted VoIP systems. This allows users to conduct face-to-face meetings with people in other locations, which can be especially useful for remote teams or businesses with multiple locations.

Online fax services are also commonly included in hosted VoIP systems. This allows businesses to send and receive faxes without the need for a physical fax machine, which can be more convenient and cost-effective.

Important Terms You May Come Across When Researching VoIP

Here is a list of terms you may hear while researching VoIP. 

Hosted VoIP: A cloud-based phone service that allows users to make calls over the internet using Voice over Internet Protocol (VoIP) technology.

VoIP: Voice over Internet Protocol is a technology that allows you to make voice calls using the internet rather than traditional phone lines.

SIP: Session Initiation Protocol is a signaling protocol used to control multimedia communication sessions, such as voice and video calls, over the internet.

PBX: Often used interchangeably with VoIP, Private Branch Exchange is a private telephone network used within a company or organization. A hosted PBX is a virtual PBX hosted by a service provider.

Softphone: A software application that allows users to make phone calls over the internet using a computer, smartphone, or tablet.

Auto Attendant: A feature that automatically answers incoming calls and routes them to the appropriate extension or department.

Call Queue: A feature that puts incoming calls on hold and places them in a queue until an available representative is ready to take the call.

Call Recording: A feature that allows calls to be recorded for training, quality control, or legal purposes.

Virtual Number: A phone number that is not tied to a specific physical location, but can be routed to any phone or device.

DID: Direct Inward Dialing is a feature that allows external callers to dial a specific extension or department directly, without going through a receptionist or auto attendant.

Encryption: A security measure that scrambles data to prevent unauthorized access or interception.

Web Conferencing: A feature that allows multiple participants to join a virtual meeting or conference call using audio, video, and screen sharing capabilities.

Quality of Service (QoS): A mechanism that prioritizes and optimizes network traffic to ensure that voice and video calls are delivered with high quality and minimal delay.

Interested in learning more about hosted VoIP and how it can improve communication within your business, all while saving money? Get in touch with OT Group today. Our team of IT experts would love to answer your questions. 


OT Group 2023 Trends eBook COVER-2

Your Ultimate Guide to the Top Business IT Trends in 2023

In this new OT Group guide, we take a look at the hottest IT trends that will help Ontario-based small and medium-sized businesses grow over the coming year.

Download Free Guide

Related posts

Subscribe to our blog

Blog Subscription


  • There are no suggestions because the search field is empty.