Hosted PBX vs cloud PBX: what is the difference?

Who this guide is for

Audience: Business decision-makers comparing phone system deployment models.

Understand how VoIP calling works — SIP, PBX, codecs, trunking, DID numbers, STIR/SHAKEN, and the protocols behind business phone systems.

Use this guide when you want the setup to be correct the first time and easy for another admin, manager, or supervisor to verify later.

What this workflow helps you accomplish

Hosted PBX and cloud PBX are often used interchangeably, but they describe different deployment architectures. Hosted PBX means the provider manages the PBX infrastructure in their data centre and you connect via SIP. Cloud PBX is a specific type of hosted PBX built on multi-tenant cloud infrastructure with shared resources.

This workflow matters because numbers, routing, access, and reporting in CallOrbit are connected. Skipping one setup detail usually creates avoidable support work later.

• Step 1: Understand the three deployment models: On-premise PBX has hardware in your office. Hosted PBX has dedicated virtual infrastructure managed by the provider in their data centre. Cloud PBX uses shared multi-tenant cloud infrastructure where resources are pooled across customers and billed on consumption.
• Step 2: Evaluate hosted PBX for dedicated control: hosted PBX gives you a dedicated PBX instance with custom configuration, isolated resources, and predictable pricing. This suits organisations with specific compliance requirements or custom IVR logic that needs a dedicated platform environment.
• Step 3: Evaluate cloud PBX for scalability: cloud PBX shares infrastructure across tenants, which means adding users or features happens instantly through a self-service portal without provisioning dedicated hardware. Cloud PBX typically offers per-user monthly pricing with lower upfront costs.
• Step 4: Check where the PBX intelligence lives: in hosted PBX, the call control, IVR, routing, and voicemail all run inside the provider's data centre. In cloud PBX, these functions are distributed across a cloud platform with built-in redundancy and geographic failover between regions.
• Step 5: Plan for migration between models: hosted PBX to cloud PBX migration involves moving configuration from a dedicated instance to a multi-tenant platform. Cloud PBX to hosted PBX migration requires provisioning dedicated infrastructure and reconfiguring SIP trunks and endpoints.

Setup checklist

• Understand the three deployment models: On-premise PBX has hardware in your office. Hosted PBX has dedicated virtual infrastructure managed by the provider in their data centre. Cloud PBX uses shared multi-tenant cloud infrastructure where resources are pooled across customers and billed on consumption.
• Evaluate hosted PBX for dedicated control: hosted PBX gives you a dedicated PBX instance with custom configuration, isolated resources, and predictable pricing. This suits organisations with specific compliance requirements or custom IVR logic that needs a dedicated platform environment.
• Evaluate cloud PBX for scalability: cloud PBX shares infrastructure across tenants, which means adding users or features happens instantly through a self-service portal without provisioning dedicated hardware. Cloud PBX typically offers per-user monthly pricing with lower upfront costs.
• Check where the PBX intelligence lives: in hosted PBX, the call control, IVR, routing, and voicemail all run inside the provider's data centre. In cloud PBX, these functions are distributed across a cloud platform with built-in redundancy and geographic failover between regions.
• Plan for migration between models: hosted PBX to cloud PBX migration involves moving configuration from a dedicated instance to a multi-tenant platform. Cloud PBX to hosted PBX migration requires provisioning dedicated infrastructure and reconfiguring SIP trunks and endpoints.

Operational follow-up

After you complete this flow, confirm the live experience from both the agent and customer side so ownership, routing, permissions, and reporting all match what the workspace expects.

If your team is rolling this out across multiple users, queues, or phone numbers, pair this article with the broader knowledge base and the relevant routing or numbers guides to keep deployment consistent.

• What is the CallOrbit Knowledge Base for? — It is the public help hub for how CallOrbit works, covering numbers, webphone setup, SIP, extensions, routing, users, roles, and billing basics.
• Can customers read this without signing in? — Yes. The Knowledge Base now lives on a public route so customers can read setup guidance before or after they enter the portal.
• Does the portal still have its own Knowledge Base page? — No. The signed-in portal navigation no longer carries a separate Knowledge Base page, and the old portal path now redirects to this public version.
• What is VoIP and how does it work? — VoIP (Voice over Internet Protocol) converts analogue voice signals into digital packets and transmits them over IP networks. Unlike traditional PSTN phone lines that require dedicated copper wiring per line, VoIP calls use your existing internet connection, which makes them cheaper, more flexible, and easier to scale.
• What is SIP trunking? — SIP trunking is a virtual connection that replaces traditional analogue phone lines or PRI circuits. A SIP trunk carries multiple concurrent voice channels over a single IP connection to your PBX or phone system, eliminating per-line hardware costs and monthly line rental fees.
• What is the difference between hosted PBX and cloud PBX? — Hosted PBX runs on dedicated virtual infrastructure managed by a provider, while cloud PBX uses shared multi-tenant cloud infrastructure. Hosted PBX suits organisations needing custom configuration and predictable pricing. Cloud PBX is better for instant scalability and per-user monthly billing.
• What is a DID number? — A DID (Direct Inward Dialling) number is a virtual phone number that routes directly to a specific extension, IVR menu, queue, or user within a phone system without an operator. DIDs decouple the phone number from the physical phone line, so you can have hundreds of numbers routed through a single SIP trunk.
• What are G.711, Opus, and G.729 codecs used for? — These are VoIP codecs that convert voice into digital data. G.711 uses 64 Kbps for toll-grade quality and is the PSTN standard. Opus uses 6-510 Kbps and adjusts to network conditions. G.729 uses 8 Kbps for bandwidth-constrained links. The right codec depends on your available bandwidth and call quality requirements.

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