• TOLL FREE 888-808-6111

How Hosted VoIP Actually Works

What's happening at Telesystem

How Hosted VoIP Actually Works

Accessing and using a virtual service via resources that are hosted elsewhere is not a new practice. In fact, it predates the cloud and even the internet itself, going all the way back to the time-sharing systems of the 1960s and the invention of ARPANET, a breakthrough in packet-switched networking.

But this usage model didn't become practical at significant scale until relatively recently. It really ramped up with the launch of many general cloud computing services and more specific applications like hosted VoIP from 2000 onward.

In any hosted or cloud-based service, something that would once have required local physical infrastructure is instead accessed virtually, usually over an IP network. With hosted VoIP solutions in particular, the shift applies to how telephony and accompanying applications like voicemail are handled.

While we've delved into some of the advanced functionality of business phone systems on this blog, we haven't looked as much at how hosted VoIP works at a basic level and why its distinctive structure gives you a lot of operational advantages. So today let's explore the ins and outs of hosted VoIP.

From circuits to packets: Understanding the key shift from PBXes to hosted VoIP

When someone in your organization makes an old-fashioned phone call, they're using a circuit-switched network, namely the public-switched telephone network (PSTN). PSTN consists of dedicated channels, or circuits, that remain open for the duration of a call. Time Division Multiplexing technology repeatedly samples the voices on the line and sends them over the single open channel. 

In contrast, VoIP runs on packet-switched IP networks. Data is broken down into packets and sent over the internet, just like traffic from any other application, and assembled in proper sequence upon arrival at its destination. It can pass through many channels, be prioritized with Quality of Service (QoS) features in specialized routers and leverage any internet service plan, meaning you don't have to maintain separate networks for voice and data. 

VoIP lets you simplify your network architecture, but it still requires its own specific infrastructure, including compatible phones and routers as well as servers and software for supporting the system at-large. That might sound complex, but this is where the "hosted" in hosted VoIP makes a difference.

Infrastructure on-demand: The benefits of working with a managed VoIP provider

With hosted VoIP, all of these key assets are overseen by the service provider. You don't have to deal with the overhead of procuring and maintaining all of the necessary supporting equipment. Plus, you don't have to operate your own data center or implement security mechanisms such as DDoS mitigation, since all of that is taken care of by your VoIP partner.

This setup makes hosted VoIP much more cost-effective than an on-premises PBX. The total savings and added convenience can be even more substantial than the benefits companies typically see when transitioning their services to the cloud, since they're getting a better deal on:

  • Long-distance calling: The economic model and technical infrastructure of PSTN-based PBXes lead to relatively high long-distance charges. Hosted VoIP can deliver better rates thanks to its packet-switched structure, in addition to – in the case of a Telesystem hosted VoIP deployment – free calling to other customers.
  • Reliability: Less downtime is necessary when upgrading a hosted VoIP system, since most of the changes are simple software updates being applied. There's also the peace of mind from having geographic redundancy and proven failover mechanisms to fall back on.
  • Scalability: Because the end customer doesn't have to directly manage much infrastructure, modifying the system is relatively simple, often just a matter of changing a few settings in a web interface. Costly on-site vendor visits for moves, adds and changes can become things of the past.
  • Upfront capital expenditures: Most of the costs of hosted VoIP are operating expenditures from subscriptions. You don't have to spend a lot of money right away just to get started.

Telesystem offers a synergistic portfolio of voice, security, dedicated internet access, managed Wi-Fi and SD-WAN services. Take a look at our resources page to learn more about how making the switch to hosted VoIP can take your business communications to the next level.


Request a quote.

Fill out this form or call 888-808-6111.

Click Next below to submit more details about your request.