Can Hosted PBX Reduce Your Capital Expenditure?

The short answer: absolutely.

But reducing your company’s capital expenditure can be painful if you don’t have the right tools or solutions in place. That’s why Hosted PBX (private branch exchange) is gaining so much traction in the IT industry, as a low-cost, reliable alternative to traditional “on premise” services.

First, let’s get some top level benefits of adopting hosted PBX out of the way: 

  • Reduce and easily maintain operational costs.
  • Avoid expensive hardware and maintenance fees.
  • Utilize feature-rich phone services and capabilities.

So, of course, hosted PBX is an attractive solution for MSPs, VARs (Value-added Resellers), IT Solutions Providers, and Interconnects, because it allows these companies to utilize the cloud for their communications needs.


Traditionally, businesses would use premise-based PBX systems, which are maintained inside your company’s phone closet. But are you really willing to dish out more money for a product that may become obsolete in a year or two’s time? Probably not.

In fact, hosted PBX is more cost effective and scalable than traditional alternatives, without the significant investments and up-front costs of the top on-premise PBX solutions. And because hosted PBX utilizes VoIP, it allows your customers to work from the office, home, the road, or through their smartphone.

No one wants to waste capital by endlessly upgrading and replacing hardware, software, and professional services every time there’s a new advancement in the tech or telecom industry. And for a while, that was the only option. Even after cloud communications services like hosted PBX first hit the market, businesses were wary of adopting these new technologies due to concerns over quality, reliability, and business continuity. 

But today, hosted PBX rivals on-premise PBX in nearly every category, from call quality to phone features—and it can do something those on-premise solutions can’t: reduce your capital expenditure.


With hosted PBX, you aren’t spending the same amount you would to maintain your system. That’s because you’re no longer responsible for a multitude of operational costs that add up over time. With hosted PBX, it’s not just about short-term savings—it’s about reducing your costs for the long term too.

Your business can scale up or down as needed, meaning you pay for the services you use…as you use them. This helps you maintain your costs while enabling your business to expand as your needs do. Many businesses that employ on-premise PBX systems are used to over-paying for services and hardware they’ll never use, which is one of the major reasons your capex is higher than it needs to be.

Reducing capex is one of the major motivating factors behind the industry's switch to hosted PBX and VoIP. It's far less workand less complexthan your company's other options, and as you can see, the benefits are plenty. It doesn't matter if you're a small business or enterprise, having the right communications solution in place is vital to your business' growth.

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