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Not long ago, a glossary for a treatise on Small Business Office Phone Systems consisted of only a few code letters – the main ones being PBX – meaning “Private branch exchange” – a telephone system which routed external phone calls through a multiline in-house system — until the arrival of IP-based phone systems in the late 1990s. That addition of “IP” (Internet Protocol or Internet Platform) to the alphabet soup was transformational to the industry. Recently two more letters have been added as a prefix, creating the commonly encountered “VoIP,” meaning “Voice over Internet Protocol,” a method of sending voice calls over the IP data network. This can apply to the public Internet or private IP networks.

     A   VOIP System/ IP PBX system consists of one or more  SIP phones/VOIP phones,  an IP PBX server and optionally includes a VOIP Gateway. (By the way, SIP means “Session Initiation Protocol” – a signaling protocol used to establish a session in an IP network, from a simple telephone call to a multimedia conference session with many participants).   The IP PBX has a directory of all phones/users and their corresponding SIP address and thus is able to connect an internal call or route an external call via either a VOIP gateway or a VOIP service provider.  This process, of course, is entirely automated.

PBX is a system that connects telephone extensions of a company to outside public telephone network as well as to mobile networks. An IP (Internet Protocol) PBX (Private branch exchange) is a PBX that provides audio, video, and instant messaging communication through the TCP/IP protocol stack for its internal network and interconnects its internal network with the Public Switched Telephone Network (PSTN) for telephony communication.

     VoIP (Voice over Internet Protocol) gateways can be combined with traditional PBX functionality enabling businesses to use their managed intranet to help reduce long distance expenses, enjoy the benefits of a single network for voice and data and advanced CTI features or be used on a pure IP system which in most cases gives greater cost savings, greater mobility, and increased redundancy.  An IP-PBX can exist as a hardware object, or virtually, as a software system.

     Because a part of PBX functionality is provided in software, it is relatively inexpensive and makes it easy to add additional functionality, such as conferencing, control of live calls, Interactive voice response (IVR), (text to speech/automatic speech recognition), Public switched telephone network (PSTN) and  interconnection ability supporting both analog and digital circuits.

     Telephony experts are not reluctant to preach the benefits of replacing an old PBX system with an IP PBX system.

First of all, it is much easier to install and configure than a proprietary phone system, because it runs as software on a computer and can leverage the advanced processing power of the computer and user interface. It is also easier to manage because of web-based configuration interface, allowing you to easily maintain and fine tune your phone system. There are also significant cost savings using VOIP providers for long distance and international calls. The monthly savings are significant.

     An IP Telephone system allows you to connect hardware phones directly to a standard computer network port (which it can share with the adjacent computer), thus eliminating the need for wiring.  Software phones can be installed directly onto the PC.  Another obvious benefit of using IP PBX’s is that you eliminate vendor lock in!

     IP-PBX systems are scalable.  Proprietary systems are easy to outgrow: adding more phone lines or extensions often requires expensive hardware modules. In some cases you need an entirely new phone system. Not so with an IP PBX: a standard computer can easily handle a large number of phone lines and extensions – just add more phones to your network to expand!

    With an IP PBX Phone System you can deliver better customer service and better productivity and you get twice the phone system features for half the price.  There is also better phone usability, because SIP phones are easier to use. With an IP PBX, office changes and desk mobility are easy, as the user simply takes his phone to his new desk.  Users can roam, too, including working from home.  Calls can be diverted anywhere in the world because of the SIP protocol characteristics!

     Investing in a software-based IP PBX makes a lot of sense, not only for new companies buying a phone system, but also for companies who already have a PBX. An IP PBX delivers such significant savings in management, maintenance, and ongoing call costs, that upgrading to an IP PBX, should be the obvious choice for any company.