A Hosted IP Phone System, also known as a cloud-based or VoIP (Voice over Internet Protocol) phone system, is a modern communication solution that modernizes how businesses manage their telephony. Unlike traditional landline systems, where physical phone lines are required, hosted IP phone systems utilize the power of the internet to transmit voice and data.

In this system, the phone system's hardware and infrastructure are maintained by a third-party provider and hosted in the cloud. This eliminates the need for businesses to invest in expensive on-premises equipment and the associated maintenance costs. Instead, companies can access advanced communication features through a subscription model, scaling up or down as needed without the constraints of physical infrastructure.