What are the differences between a hosted PABX and an onsite PABX?

A PABX is a Private Automated Branch Exchange and you will often find it referred to as simply a PBX. In its most basic form, a PABX is simply a system that acts like a switchboard where a call is received on the main access number (or a direct number) and then routed to the correct receiver within the company. Once upon a time, this was done by a person in front of a physical switchboard, but today that system is automated (hence the A in PABX). A PABX can be a very effective solution for companies, especially larger companies that can also benefit from the other features that can be part of a system, like Auto Attendant, Call Recording, and more. A big decision you have to make when you start to invest in a PABX system is whether it will be onsite or hosted as there are some important differences between the two.

Location and equipment

The name already indicates a big difference. An onsite PABX system means that you are installing your own physical hardware at your premises. Hosted PABX is the opposite and the system you are using is hosted on hardware in a data centre. Your service provider will be maintaining the system to ensure that you have a working PABX for your office telephony solution. You don’t need to invest in the actual PABX hardware, but you will need to purchase phones or headsets, and you will need to have a stable internet line.

Capital investment

The difference in equipment leads straight into the next difference, which is the capital that you invest into the system. With an onsite PABX, you could be looking at a rather big Capital Expenditure (CapEx) as the equipment you need to buy upfront can be pricy. A big company might be able to make that investment once and buy the equipment outright, but a smaller company might have to pay it off over a number of months or years. When it is paid off, the asset is yours. Remember though that it is an asset depreciating in value and what you’ve got is what you’ve got (more on that later).

With the hosted PABX, your CapEx can be kept very low, but you will have a constant Operational Expenditure (OpEx). You will be paying your service provider a monthly fee for the hosting of your PABX and any additional features that might be included in your agreement. Over several years the OpEx might be much more than the CapEx, but you will always have the latest PABX technology.

Updated technology

We have already said that what you’ve got is what you’ve got with an onsite PABX. Your hardware and features can be updated over time, but as with any hardware, there are limits and it will become outdated. The number of lines you have will also be limited to what your hardware and internet can handle.

With a hosted PABX your service provider should be updating the system continuously. You always have access to the latest PABX technology and features, and the system is scalable to your company’s needs. Your internet quality can still limit the number of calls and active extensions available to you, though.


An onsite PABX system also means you need an onsite PABX expert and team available at any time to monitor your system. This includes fixing any issues with the system, monitoring call quality, etc. A hosted PABX system means that your service providers are the experts that will be monitoring the system for you and fixing any issues that come up. You don’t need someone to physically check on your hardware, you just need internet access, and it can all be done virtually.

When you decide to invest in a PABX system for your company, you will first have to choose whether onsite or hosted is the right option for you. Onsite is more secure and cheaper in the long run, but hosted is always updated and you don’t need in-house expertise.

If you are still unsure which one will be best for your company, get in touch with SPOC at sales@spocsa.co.za to help you make the most informed choice you can.

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