What is hosted VoIP?

Hosted VoIP technology has been used for many years, but it's only recently that businesses have adopted it en masse. As we'll explain, part of this is due to BT announcing it will switch off its PSTN and ISDN telephone networks in 2025, but perhaps more importantly, are the benefits and cost savings it affords.

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What is a hosted VoIP solution?

A hosted VoIP (voice over internet protocol) solution is a business telephone system located (hosted) in the cloud. That means all the call processing and management takes place in your VoIP provider's data centres, not on a physical piece of hardware in your office.

As the phone system is hosted on the internet, you can connect to it via your broadband or WiFi. When you start a call, your handset, mobile phone or laptop will convert your voice into data packets and then transfer them in real-time to your hosted phone system. From there, your phone system will route the call out to the wider world and connect you to your destination.

As with many internet-based services, hosted VoIP is far cheaper than traditional phone lines and systems, with businesses receiving savings of anywhere up to 37% on their telecoms.

The most significant advantage of hosted VoIP is the flexibility it gives you as a business. You and your team can work from anywhere, as long as you have an internet connection.

ISDN switch off - signalling the end for legacy phone systems

In 2015, BT announced that from 2020 you would no longer be able to buy ISDN services, and they are targeting a switch-off date for existing phone services in 2025. That gave businesses a decade to transition over to VoIP phone systems at the time, but companies now have only a few years to make the switch.

With hundreds of thousands of businesses using ISDN 2 and ISDN 30, the clock is ticking and now is the time to switch to VoIP.

How does a hosted VoIP phone system work?

As we've mentioned, with a hosted VoIP phone system, all of the call processing and management takes place offsite in remote data centres, so the only equipment you will have in your office is handsets, mobile devices and desktops. Here's a diagram showing how it works:

Diagram showing how hosted works for a business
With hosted VoIP all of your calls are managed in the cloud.

Benefits of a hosted VoIP service

Depending on the hosted VoIP service provider and system you opt for, the benefits you receive will be subtly different; however, some overall benefits will apply regardless of the solution you choose.

1. Cost savings

You'll immediately benefit from significant savings when switching to a VoIP phone system.

Firstly, you can cancel your costly ISDN line and replace it with a simple broadband connection.

Secondly, as you no longer have equipment in your office, there's nothing to maintain, upgrade and support. Gone are the days of needing a telecom engineer to visit your office to maintain your servers and systems.

You may think that switching to a hosted VoIP system will mean replacing all of your desk phones, but that isn't always the case.

With a hosted VoIP phone system, you don't need desk phones; you can make and receive phone calls from your mobile devices and/or your computers. This dramatically reduces the setup cost, especially for larger businesses that might need hundreds or thousands of handsets.

Finally, most of the best VoIP service providers include a substantial amount of free phone calls in their packages, so unless your company has exceptionally high usage, you'll likely pay little or nothing for your business phone calls.

2. Flexible working

In recent times flexible working and the ability to work from anyway have become increasingly important. While not all businesses have bought into remote working, and many would prefer their teams to be in the office, there is no doubt that having the option to work remotely is a massive benefit.

Before VoIP, the only way for companies to have their teams work remotely would be to forward business phone calls to mobile devices, incurring costs and limiting the functionality available to employees. For example, there was no way to quickly transfer people back to the office or conference with colleagues.

With a hosted VoIP phone system, your team get the full power of your cloud-based VoIP system regardless of where they are.

As long as they have a mobile device with a decent internet connection, phone calls to their extension will go directly to them. If they're in a hunt group, their phone will ring when everyone else does, and if you use functionality like call recording, that'll also work.

3. Extensive features

It used to be the case that unless you invested heavily into a business communications system and various other servers and systems, the functionality you'd receive would be limited. Things like music on hold, call recording, virtual receptionist and more were only available to big businesses.

As we'll explain further in this post, that's not the case anymore. With a hosted VoIP system, businesses of all sizes can access advanced features and functionality for a simple monthly fee.

4. Unified Communications

Please forgive using some telecoms jargon, but Unified Communications is an essential benefit of hosted VoIP that we need to highlight. In simple terms, Unified Communications means linking up numerous communications systems under a single platform.

Think of things like your email, website live chat, video conferencing, internal team messaging and more. Most of the best VoIP phone systems will allow you to connect these systems, improving efficiency and minimising costs further.

5. Improved efficiency

One of the often-overlooked benefits of switching to a hosted VoIP phone system is that it'll improve your business efficiency. To give you some examples, with an Auto Attendant or IVR, callers choose options from a menu system to reach the correct destination, removing the need for a receptionist and ensuring employees only answer calls that are meant for them.

Another example would be integration with tools such as your CRM so that when people answer a call, the contact record for the person on the phone automatically pops up. It sounds small, but it saves time over a year, especially if you have a lot of employees it adds up.

We'll get into more of the features later in this guide to hosted VoIP solutions, but as we say, you can expect to save time and money by using one.

6. Scalability

With legacy telephone systems, the only way you could add more users would be to expand your servers and add channels to your ISDN service.

With a hosted VoIP environment, you tell your hosted VoIP provider that you need to add more users, and in a couple of clicks, your system and service are expanded. You can grow your team exponentially, and your hosted system will be able to keep up.

7. Unlimited phone numbers

Phone numbers used to be pretty expensive, and companies, therefore, limited the amount of them they had. However, that's not the case anymore, you can get as many VoIP phone numbers as you need, and it'll cost you very little, if anything.

Not only that, but you'll be able to get phone numbers anywhere in the UK and the world. You might decide to start selling your services in another country and be thinking about opening a remote office.

You needn't do that with a hosted VoIP; you can get international VoIP telephone numbers and connect them directly to your UK-based system.

The two different types of hosted VoIP phone systems

When you look at hosted VoIP as a replacement for your existing business phone system, there are two distinct types you can choose from.

The first, fully managed cloud phone systems, require the least management and maintenance, and there are tons to choose from.

The second, a privately hosted VoIP system, will give you all of the benefits of VoIP but will allow you to have much more control over your company telecoms.

Fully managed cloud VoIP phone systems

If you search the internet for VoIP services, 97% of those you'll see are fully managed services. You subscribe to a service, much as you do with things like your email or website hosting, and everything is taken care of for you.

Your business VoIP service provider will get things set up, and you don't need to think about things like SIP trunks. While a perfect option for many businesses, with a fully managed system, you can be restricted by the solution you choose; for example, many will only allow you to use compatible handsets with their service.

Private hosted VoIP solutions

The alternative to a fully managed service is getting your VoIP phone system and hosting it wherever you choose. The market leader in this regard is 3CX, and as we explained in our recent 3CX review, it's hugely powerful and cost-effective hosted VoIP. The benefit of 3CX is that you maintain as much control over your busines system as possible without sacrificing features and functionality.

With 3CX, you can use any VoIP phone, host it wherever you like and choose your SIP trunk provider. The downside of this hosted solution is that it requires more management, and therefore you typically need a business telecoms company that'll support you with it.

Top hosted VoIP features

As we've already explained, a significant benefit of a hosted VoIP system is all of its features, so before we get to the best VoIP providers currently in the market, we want to share with you some of the top features to look out for.

1. Advanced call management

Hosted VoIP solutions come with advanced call management features that'll improve your business's efficiency and customer experience. You can efficiently distribute VoIP calls to the correct destinations and minimise the time spent manually passing calls around the office.

2. Auto attendants

A significant cost in most businesses is having a receptionist handling incoming calls. For many, it's a full-time role, just taking calls and being at the front of the house for the company.

Large businesses have for many years used "virtual receptionists" or auto attendants to better distribute calls. "Press 1 for sales or 2 for technical support" is the type of thing these multi-level menu systems can do. Best of call, most of the top hosted VoIP providers include an auto attendant.

3. Internal team messaging

Most of the best-hosted VoIP solutions include internal messaging systems to allow your team to chat easily without needing to write an email or pick up the phone. 3CX, one of the best systems available, even comes with free live chat for your website, which links directly into the internal messaging platform.

4. Call recording

It's not just financial services companies deciding to record their calls; businesses in many different industries are increasingly too. There are numerous benefits of call recording, from training to dispute resolution. If you'd like to know more about how call recording and VoIP work, click here.

5. Custom music-on-hold

Before you think "elevator music" (please forgive the Americanism), customisable music-old-hold is much more. With this VoIP feature, you can play pre-recorded messages to people while they wait. That could include advertising, important notices, policies and procedures, etc.

All the best VoIP systems include this feature, so set it up.

6. Softphone

A softphone is simply an app on your computer or mobile phone that allows you to make and receive calls as you would with a desk phone. Assuming you have a microphone, you'll be able to make calls from your existing devices without needing to buy a desk phone if you don't need them.

It's softphones that enable remote working with a hosted VoIP service; as long as you have an internet connection, you'll be able to make VoIP calls like you were in the office.

Some of the best cloud-based phone systems even allow you to make calls from a web browser, so you can still make business calls if you don't have a personal device.

7. Voicemail to email

With a hosted VoIP phone service, all your voicemails will be delivered to your email for you to listen to at your convenience. The best VoIP services even do voicemail transcription, so if you prefer reading over listening or want to ensure the accuracy of the message is captured, it's a great option.

8. Video conferencing

In the past few years, we've all become accustomed to video conferencing, but did you know you don't need to pay for extra service? All of the market-leading hosted VoIP providers include video conferencing. Most VoIP services will do it too.

9. Call park and pickup

With call park and pick up, you can place a call on hold with one device and then pick it back up on another. Rather than calling the person back from your mobile, you can park it using your desk handset, pick it up, and continue with your mobile. This is especially useful if you are on a lengthy call and need to go out of the office.

10. Call presence

The final feature we want to draw your attention to when it comes to hosted VoIP phones is "Call presence". This allows others in your company to see who is already on a call or away from their desk to avoid unnecessarily transferring calls. It's a small thing, but it's a time saver and helps improve customer experience.

Top five hosted VoIP systems for UK businesses

1. Gamma Horizon

Feature-rich hosted VoIP platform is an excellent fit for companies from one user up to hundreds. It has all the functionality businesses need and is scalable and will support you as you grow.

Perhaps the only disadvantage of Gamma Horizon is that you can't use any IP phones, you have to choose from specific models that are supported by Horizon. That said, the phones they support are market-leading in their own right (Polycom and Cisco), so it's not too much of a disadvantage.

Key benefits:

  • Extensive range of features
  • Generous free calling allowance
  • Excellent for small businesses
  • Unlimited VoIP phone numbers
  • Excellent reliability
  • Work from anywhere with mobile and desktop apps
  • Integrates with popular CRMs
  • Professional and responsive support (via partners)
  • UK-based business VoIP provider
  • Options to include call centre functionality

2. 3CX

Incredibly powerful and versatile hosted VoIP system, it's a piece of software you can install anywhere.

The brilliant thing about 3CX is that you have complete control over it which is rare for a hosted VoIP system. 3CX is particularly good for more than 20 users and tends to be more cost-effective than others mentioned here the bigger your company is. Smaller businesses however may benefit more from a fully managed hosted VoIP provider.

Key benefits:

  • More control over your telecoms
  • Choose your hosting
  • It supports all IP phones
  • Often costs less than other VoIP services (20+ users)
  • Excellent iOS and Android apps
  • Browser-based video conferencing
  • Conference call from any device
  • Internal messaging and live chat for your website
  • Integrates with leading CRMs
  • Excellent support from 3CX partners
  • Widely seen as one of the best on the market

3. Mitel MiCloud

A leading cloud VoIP phone system from a company with decades of experience delivering business telephony.

The only significant drawback of the Mitel platform is that it doesn't have quite as many features as 3CX and Gamma Horizon, but it can still be a good choice for some companies.

Key benefits:

  • Lots of useful features and options
  • Award-winning telephone system
  • Good for small businesses
  • Stable and secure service
  • Mobile integration as standard
  • Excellent handset selection
  • Low-cost international calls
  • Lots of options to manage phone calls
  • Relatively low-cost

4. bOnline

One of the highest-rated business phone service providers, promoting a small business-friendly approach to telecoms.

They are the first VoIP provider we've chosen to include that delivers their services directly to businesses, rather than via a network of partners. Usually, it's the case that by going direct support levels tend to suffer, but that isn't the case with bOnline.

Key benefits:

  • Fair and transparent pricing
  • Excellent reviews on Trustpilot
  • Tons of features
  • HD voice calls
  • Call reports (ideal for call centres)
  • Video meetings
  • Call forwarding and call queuing
  • Call calls made over IP (internet protocol)
  • No need to connect to a private branch exchange

5. 8x8

8x8 is a global hosted VoIP provider whose system is comprehensive and excellent for larger businesses.

The system boasts lots of useful features and as you might expect for a global provider, can support international businesses. Perhaps the only drawback of 8x8 is customer support levels, as small businesses tend to not get dedicated account managers and a single point of contact.

Key benefits:

  • Voice calling, video calls and team chat
  • Embeddable platform which is developer-friendly
  • Integrates with CRMs and Microsoft Teams
  • Secure platform with end-to-end encryption
  • Create AI-powered workflows
  • Desktop, mobile and browser-based apps
  • Unlimited Calling, SMS and fax
  • Runs using voice-over-internet protocol
  • A market-leading cloud phone system

Choosing the right business phone system platform

There are many things to consider when looking at hosted VoIP systems which is why it's always worthwhile speaking to us so we can help you identify the right one for your company.

Simplify the process of choosing your business communications system by speaking to us first. When you request a comparison quote, our in-house telephony team will review your requirements and come back to you with recommendations on the VoIP telephone system that best fits your needs. The service is entirely free of charge, as is the advice we provide.

Lee Clarke
Sales Director

Having worked for T2k for nearly 25 years, it's fair to say that Lee is an expert when it comes to all things telephony and business communications. Overseeing the commercial side of the business, he has helped the company evolve and grow through the decades. In recent years, and with the advent of VoIP and hosted telephony, Lee has made sure that T2k is at the forefront of technological developments. With a firm interest in helping businesses navigate the world of telecoms, Lee is responsible for the majority of the content on this website.

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