Hosted PBX Market Size, Share and Trends 2024 to 2034

Hosted PBX Market Size and Forecast 2024 to 2034

The global container security market size is worth around USD 13.17 billion in 2024 and is anticipated to reach around USD 62.20 billion by 2034, growing at a CAGR of 16.79% over the forecast period 2024 to 2034. The North America container security market size reached USD 4.29 billion in 2023.The increasing demand for the hosted PBX by industries to improve the quality of internet calls in organizations is driving the growth of the market.

Hosted PBX Market Key Takeaways

• North America dominated the market with the largest market share of 56% in 2023.
• Asia Pacific is expected to grow at a notable CAGR of 18.82% during the forecast period. 
• Europe is projected to expand at a double digit CAGR of 16.93% during the forecast period. 
• U.S. is expected to expand at a remarkable CAGR of 15.5% during the forecast period. 
• By component, the solution segment contributed the biggest market share of 56% in 2023.
• By component, the services segment is expected to expand at the double digit CAGR of 17.2% during the forecast period.
• By application, the unified communication and collaboration segment recorded more than 39% of market share in 2023. 
• By industry vertical, the healthcare and life sciences segment is expected to be the fastest-growing segment in the market during the anticipated period. 

U.S. Hosted PBX Market Size and Forecast 2024 to 2034

The U.S. hosted PBX market size was exhibited at USD 3.21 billion in 2023 and is projected to be worth around USD 17.96 billion by 2034, poised to grow at a CAGR of 16.94% from 2024 to 2034.

North America dominated the market with the largest share in 2023. The growth of the market is attributed to the rising development of industrial development and the demand for the modern medium for telecommunications for efficiency in the overall communications operations in the organizations, which are driving the growth of the hosted PBX market. The rising penetration and continuity in the remote and hybrid work culture by several large, medium, and small organizations are also contributing to the adaptation of the hosted PBX network. The strong availability of broadband plays an important role in the efficient operations of cloud-based communications, and the increasing penetration of high-speed internet users accelerates the growth of the market. Additionally, the development of IT infrastructure is boosting the growth of the hosted PBX market.

• About 19.5% of employees are working remotely or working from home for pay in August 2023. The number of remote workers increased from 17.9% to 20.0% between October 2022 and August 2023 in the United States.
• 21.6% of the women are working remotely, higher than men, accounting for 17.7% as of August 2023.
• Remote work is more common among Asians, with 31.2%, Whites, 19.3%, Blacks, 15.4%, and Hispanics, 9.9%.

Asia Pacific is expected to have significant growth during the forecast period. The growth of the market is attributed to the rising development of IT infrastructure, and other industrial developments are driving the growth of the market. The rise in the remote and hybrid work culture during and post-pandemic is accelerating the growth of the hosted PBX market. Hosted PBX is the technology that enhances the overall telecommunications in organizations and boosts the growth of the market in the region.

• 28.2% of the full-time Indian employees are working on a hybrid model, and 12.7% are working from home as of 2024.
• It is anticipated that 60-90 million full-time employees will work remotely by 2025.
• 93% of the employees are preferring the remote job interviewing process.
• There is about 16% of the Indian companies are adopted fully remote operations.

Market Overview

Hosted PBX, also known as the private branch exchange, is hosted by the private service provider. The increasing demand for an efficient medium of communication between employees and clients is driving the adoption of the hosted PBX, which helps make and receive calls via the Internet. The hosted PBX plays an important role in replacing the traditional PBX networks that use landline phones and PBX. The hosted PBX has various beneficial features that improve the quality of communication in the organizations. Many IT and other industries are adopting the hosted PBX over the traditional PBX due to the cost reduction, accessibility to telecommunications, and maintain their operations. There are several major tech giants and other industries are shifting from traditional, on-premise PBX to hosted PBX due to the lower setup cost, low operational costs, no downtime, lower cost of maintenance, enhanced telephonic features, ability to connect to remote workers, and enhanced flexibility. Several businesses are gaining benefits from the hosted PBX, including call centers, startups, remote employees, and multiple offices. Thus, the rising industrialization is boosting the growth of the hosted PBX market. 

Hosted PBX Market Growth Factors 

• The increasing industrialization, the rising shift towards technological advancements in industrialization, and the rapid shift towards the 5G connection are driving the growth of the hosted PBX market. 
• The rising penetration of internet-based services and the demand for efficient internet calling with enhanced features like video chats, messaging, and others with better audio and video quality are driving the growth of the market. 
• The shifting preference towards the hosted PBX solution over traditional PBX networks due to its cost-efficiency, enhanced internet quality, and other features is driving the market's growth. 
• The increasing demand for enterprise mobility and the rising adoption of remote and hybrid work cultures post-pandemic are driving the demand for effective communication mediums, contributing to the expansion of the hosted PBX market. 
• The rising popularity of unified communication and collaboration and communication as a service in enterprises and further investment in research and development activities to expand internet communication technologies are driving the growth of the hosted PBX market.  

How Artificial Intelligence is transforming the hosted PBX market?

Integrating artificial intelligence with private branch exchange systems offers enhanced features like call forwarding, voicemail, and conference calling in modern business communications. AI-driven PBX systems improve the ways of handling customer queries by identifying their tones and needs and providing suitable assistance services. AI-powered virtual assistants and chatbots aid in managing routine tasks and offering 24/7 support through voice calling or text messaging features.

Predictive analytics can identify customer behavioral patterns and estimate call volumes, which ultimately helps improve customer engagement plans and decisions. Biometric authentication is also enabled by AI-powered voice recognition to optimize security levels through customers' unique voice patterns. AI-driven real-time translation for effective business communication supports overcoming the language barriers between people from different countries with enhanced connectivity and productivity.

• In January 2024, Telviva, in collaboration with Vodacom Lesotho, announced the launch of Vodacom One Connect Lesotho, a cloud-based efficient working system. It has diverse applications in healthcare, agriculture, corporate, telecommunication, etc. It aims to overcome the PBX system utilization barriers for organizations.

Market Scope

Market Dynamics

Drivers

The rising number of remote workforce employees

The adoption of the remote working pattern in the pandemic and post-pandemic by several organizations is boosting the demand for the internet-based communication system for coordinating with the remote workers that drive the growth of the hosted PBX market. Many organizations are still adopting fully remote and hybrid working in their working pattern. The adoption of a remote and hybrid work culture minimizes infrastructural expenses and cuts the other overhead tasks. Telecommunication technologies are essential elements in remote working. The hosted PBX simplifies the communication process with internet accessibility. The hosted PBX is essential to keep the remote workforce connected and further promote collaboration with traditional office environments.

The hosted PBX has properties such as cost-effectiveness, user-friendliness, and a number of other features that make it a perfect fit for remote workers to stay connected, productive, and collaborate in organizations. The hosted PBX is beneficial for remote workers in several ways, such as enhancing their productivity, flexibility, mobility, and control over employees, customers, and companies. Thus, continuing remote work in organizations is driving the growth of the hosted PBX market.

Restraints

Data security

Data privacy and security is the major concern in the hosted PBX network due to the availability of the vast amount of data associated with the employees and organization, and the increasing cases of cyberattacks, hacking, or data breach cases that have become one of the potential threats in the expansion of the hosted PBX network. Additionally, the quality of services, such as poor-quality video and audio calls, poor troubleshooting tools, and the inability to resolve issues, are some of the factors that also negatively impact the growth of the hosted PBX market.

Opportunity

Rise in mobile connectivity

The increasing adoption of the hosted PBX in mobile devices is driving growth opportunities in the market. Mobile devices are continuously growing in their communication and working capabilities. Remote workers are increasingly adopting mobile devices to receive and make calls and access all the hosted PBX features on mobile phones. Thus, the hosted PBX in mobile devices is essential for remote workers and on-the-go business operations. The advancements in mobile technologies over the period, as the evolution of smartphones, enable the seamless integration of the hosted PBX in mobile devices and allow users to access calls, voicemail, and conferencing through mobile phones. The increasing 5G infrastructure is also one of the impacting factors in the growing installation of the hosted PBX in mobile devices that drives the opportunities in the growth of the hosted PBX market. 

Component Insights

The solution segment dominated the market with the largest market share of 56% in 2023. This is due to the hosted PBX solutions play a key role in providing comprehensive and integrated systems for businesses. These solutions provide various features, such as video conferencing, call routing, unlimited calling, call recording, and SMS/MMS texting, facilitating seamless communication between teams from remote locations. Cloud PBX system provides real-time data recording and is easy to integrate, scalable, and cost-effective, thus boosting the segment.

The services segment is expected to grow at a CAGR of 17.2% during the forecast period. The rising demand for hosted PBX services by several end-use industries is driving segmental growth. Professional and managed services help integrate PBX systems with essential business tools. These services ensure that communication tools work in harmony with other software, thus enhancing data flow and operational efficiency. They also monitor and optimize PBX performance, significantly avoiding disruptions in communication.

Application Insights 

The unified communication and collaboration segment dominated the hosted PBX market and is expected to hold the largest market share during the forecast period. The increasing demand for unified communication and collaboration by several organizations owing to its several benefits is driving the demand for the segment. The hosted unified communication and collaboration overcome the challenges of telecommunication in businesses. It allows the employees to have overall access to all the communication channels, including video chat, web conferencing, phone calls, and messaging. Organization IT departments can maintain every communication channel easily, and employees are required to learn how to use the system. 

Unified communication and collaboration help the organization's IT teams manage and maintain the security of their employees with a single platform instead of managing several services and applications. The unified communication and collaboration deployment in the organization improves efficiency, reduces operational costs, rapid upgrades and provisioning, requires less space, and can be operated without installing on-premise. There are the basic foundations hosted by unified communication and collaboration, including unified messaging, cloud infrastructure, voice over IP (VoIP), and real-time communications. Additionally, there are several benefits associated with unified communication and collaboration, such as enhanced productivity and performance, easier project tracking, simple document management, and access to expertise from anywhere. 

Industry Verticals Insights

The healthcare and life sciences segment is expected to be the fastest-growing segment in the hosted PBX market during the anticipated period. The increasing adoption of the hosted PBX by several healthcare and life science institutions for getting timely assistance, high-quality telecommunication systems, and reliable sources of communication during medical emergencies are boosting the growth of the hosted PBX in the healthcare industry. The hosted PBX is gaining rapid popularity in several industries. The hosted PBX helps in covering the several communication challenges that come with manual or traditional types of communication technologies. There are some advantages that rely on the adoption of the hosted PBX in the healthcare industry, such as providing real-time response, enhancing customer satisfaction and scalability, reducing costs, increasing staff productivity, and increasing communication and collaboration. The rising advancements in healthcare technologies and trends like telehealth that provide medical services remotely are highly contributing to the expansion of the hosted PBX market in the healthcare and life sciences industry. 

Hosted PBX Market Companies

• Verizon Communications
• AT&T
• Cisco Systems
• RingCentral
• Comcast Corporation
• Sangoma Technologies
• Mitel networks
• Lingo Telecom
• Telesystem
• Ozonotel
• TPx Communications
• OneConnect
• NoVoLink Communications
• InterGlobe Communications
• Datavo
• CloudTalk
• Nexge Technologies
• AstraQom International

Recent Developments

• In January 2024, Zoom Video Communications (Zoom) will be introduced with its cloud-based phone service Zoom Phone in India soon. “In India, Zoom Phone is in beta and approaching final steps before launch,” said the president of Product and Engineering at Zoom, “Velchamy Sankarlingam.”
• In April 2024, Access4, a Melbourne Communication-as-a-Service (UCaaS) wholesaler, introduced Flex for Microsoft Teams. The launch helps the company's partners integrate Access4’s Teams Basic Channel services and Teams Enhanced Users in the same customer tenancy.   
• In June 2023, RingCentral will launch cloud telephony services in India. The launch has been approved by the critical regulatory verifications of the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DOT) India for offering fully compliant cloud phone services. 
• In July 2023, Alcatel-Lucent Enterprise (ALE), a leading communications and networking provider, launched the Rainbow™ Hub in the United Kingdom. The launch is the innovative cloud-based Unified Communications as a Service (UCaaS) solution

Segments Covered in the Report

By Component

• Solution
• Services 
  • Professional services
    • Deployment and integration
    • Training, support, and maintenance
  • Managed services

By Application

• Unified communication and collaboration
• Call center
• Mobility
• Other applications

By Industry Verticals

• Banking, Financial Services, and Insurance (BFSI)
• Retail and eCommerce
• Manufacturing
• Healthcare and life science
• IT & ITeS
• Telecom
• Travel and hospitality
• Education
• Government and public sector
• Other verticals 

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa