What is a PBX?

PBX stands for Private Branch eXchange. It is essentially the telephone system, private telephone network, switch or exchange that serves a particular business or office. The name "PBX" originated at a time when live operators still ran company switchboards and connected calls manually. In its most basic form, a PBX connects the telephone sets (extensions) within the office to each other and to the public telephone network. An extension is any endpoint within the PBX, which could be a telephone set, modem, fax machine or voicemail box. A PBX is akin to a telecom carrier's switches, but on a much, much smaller scale and with different features.

PBX systems come in many different flavors, depending on the size and features required. Most include call hold, call transfer, conference call and voicemail boxes as standard features. Other features may include trunk-hunting, call holding queues, music on hold, call forwarding, auto-attendants, extensions and multi-layered and/or interactive voicemail menus.

Traditional hardware-based PBX systems generally require hefty capital investments to install initially and remain expensive to upgrade. Some are only able to support a finite number of phones, or require separate upgrades in order to be able to support more telephone sets. These cost considerations often kept fully-fledged PBX systems out of the hands of smaller businesses and home-based businesses, but in the 1990s more economical, smaller-scale options came on the market. In the past ten years the advent of VoIP has increased the number of affordable PBX choices and features for both individuals, small businesses and medium-size organizations.

VoIP and Hosted PBX Systems

VoIP, or Voice-over-Internet-Protocol, is a communications tool which has enabled any-size business to get a telephone system with all the bells and whistles enjoyed by larger organizations. Hosted VoIP PBX services provide feature-rich, versatile call processing without the high equipment and installation costs of your traditional PBX. In addition, the flexibility of business VoIP technology enables features that were beyond the scope of on-site telephone systems, which were limited to the immediate location. With business VoIP and hosted PBX services, the scope of your telephone system is expanded beyond the realm of one office to include telecommuters, cell phones and secondary locations.