What each option includes

Both approaches use SIP to carry calls over IP. The difference is where the phone system runs and who operates it.

SIP trunking

You run the PBX, whether on site, in a data centre or on a cloud server you manage. The SIP trunk is the connection between that PBX and the public telephone network: it carries calls in both directions and delivers your numbers. Extensions, menus, queues, voicemail, call recording and the dial plan all remain on your system, under your control.

Hosted PBX

The provider runs the phone system on its own platform and you use it as a service. Phones and softphone apps register directly to the hosted platform over the internet. Connectivity to the public network is normally part of the service, so there is no separate trunk to manage. You configure users, menus and call flows through a portal or by request. Hosted PBX is sometimes called cloud PBX or hosted telephony.

Neither is better in general. The right choice depends on what you already own, who will run it and how much you need to customise.

Comparison at a glance

SIP trunking and hosted PBX compared

  • SIP trunking (your PBX)

    Who runs the phone system
    You or your IT partner
    Control over configuration
    Full: dial plan, integrations, software version
    Skills needed in-house
    PBX administration, SIP, networking and security
    Existing PBX investment
    Reused
    Adding users
    Licences and capacity on your PBX, plus trunk channels
    Resilience
    You design it: PBX redundancy, connections, failover
    Security of the PBX
    Your responsibility
    Cost model
    PBX costs you own, plus channels, numbers and calls

  • Hosted PBX

    Who runs the phone system
    The provider
    Control over configuration
    Within the options the platform offers
    Skills needed in-house
    User and call-flow administration
    Existing PBX investment
    Replaced; compatible handsets may be reused
    Adding users
    Add users on the platform
    Resilience
    Platform resilience is the provider’s responsibility; your site still needs a working connection
    Security of the PBX
    Provider secures the platform; you manage user credentials and access
    Cost model
    Usually per user, plus numbers and calls as agreed

Control and customisation

Running your own PBX gives you complete control. You choose the software and version, write the dial plan, decide when to upgrade and connect the system to anything that speaks the right protocol: a CRM, a contact-centre platform, a voice application or an in-house database. If a requirement is unusual, you can usually build it.

A hosted platform offers a defined set of features configured through its interface. That is sufficient, and often simpler, for most organisations. It becomes a constraint when you need behaviour the platform does not support, or when you need to control exactly when changes are made.

In-house skills and responsibilities

The most practical question is often who will run the system day to day. With SIP trunking, someone must be able to:

  • Administer the PBX: extensions, routes, menus, queues and software updates.
  • Configure and troubleshoot SIP: codecs, keypad tone methods, NAT and firewall rules, and SIP response codes.
  • Secure the system against toll fraud and unauthorised access, and monitor for unusual call patterns.
  • Maintain backups, hardware or virtual servers, and a recovery plan.

That person can be an internal team or an IT partner. With a hosted PBX, most of this moves to the provider, and the remaining tasks are adding and removing users, adjusting call flows and looking after handsets and the local network. If no one is available to manage a PBX properly, a hosted system is usually the safer option.

Existing investment

If you have recently bought or upgraded a capable IP PBX, SIP trunking lets you keep it and replace only the lines. Users keep their extensions, handsets and menus, and the change is largely invisible to them.

If your PBX is nearing the end of its supported life, or would need significant hardware or licence upgrades to support SIP, the comparison changes. Replacing it with another on-premises system is one option; moving to a hosted platform avoids the next hardware cycle altogether. Handsets can sometimes be reused on a hosted platform if they are standards-based SIP phones and are supported by it, which should be confirmed per model.

Features and integrations

Core features are similar on both: extensions, ring groups, menus, queues, voicemail, call transfer, time-of-day routing and call recording. The differences tend to appear at the edges.

  • Your own PBX suits deep integrations, custom call flows, specialised contact-centre or dialler software, and voice applications that need direct control of call handling.
  • A hosted PBX suits organisations that want standard business telephony with mobile and desktop apps, central management and features maintained by the provider.

Before deciding, list the features you rely on today and the integrations you plan to add, and check each against the options you are considering.

Scalability and resilience

Scalability

With SIP trunking, growth has two parts: capacity on your PBX (licences, processing and storage) and channels on the trunk. Trunk channels are quick to change; PBX capacity depends on your platform. With a hosted PBX, adding users is normally an administrative change, and the provider handles platform capacity.

Resilience

With your own PBX, resilience is yours to design. Typical measures include inbound failover on the trunk to a second site or mobile numbers, a standby PBX, a second internet connection and backup power. With a hosted PBX, the platform’s resilience is the provider’s responsibility, and phones at any site with a working connection can continue to operate. Each office still needs a reliable connection, and a local outage still affects the people at that site.

Cost model

The two options spread costs differently, which matters as much as the total.

  • SIP trunking combines the costs of owning and running a PBX (hardware or hosting, licences, support, staff time) with trunk costs: channels, numbers and calls. Costs scale mainly with concurrent calls rather than headcount.
  • Hosted PBX is usually charged per user or per extension, plus numbers and calls as agreed. Costs scale with headcount, and there is little upfront investment.

As a general pattern, organisations with many users but relatively few simultaneous calls, or with an existing PBX and the skills to run it, often find SIP trunking efficient. Organisations without those skills, or with dispersed users who mainly need standard features, often find a hosted PBX simpler to budget and manage. Compare both against your own user count, peak concurrent calls and support costs.

Making the decision

Which option fits your situation

  • You already run a capable IP PBX and want to keep it

    Your PBX is end-of-life, or you do not have one

  • You have internal or partner staff who can manage and secure it

    No one is available to administer and secure a PBX

  • You need custom call flows, deep integrations or specialised software

    Standard business telephony features meet your needs

  • Your concurrent calls are low relative to the number of users

    You prefer predictable per-user costs and little upfront spend

  • You want to control software versions and change windows

    You want the provider to maintain the platform and its updates

Questions to answer before deciding

  1. Who will administer the phone system in two years’ time, and what happens when that person is unavailable?
  2. How many users do you have, and how many calls are in progress at your busiest moment?
  3. Which integrations and call flows are essential, and does each option support them?
  4. When does your current PBX hardware, software or support contract reach end of life?
  5. What must keep working if one site or internet connection fails, and how quickly?
  6. Do you need to keep existing numbers, and can they be ported to the option you choose?

Written answers to these questions usually make the choice clear, and they form a useful brief for any provider you ask to quote.

Combining the two

The options can also be combined. Some organisations keep an on-premises PBX at headquarters, where integrations matter most, and place smaller offices or remote staff on a hosted platform. Others move to a hosted system in stages, keeping SIP trunks on the existing PBX until the move is complete.