VoIP PBX Overview

Updated: April 15, 2011

A Public Branch Exchange (PBX) is the technology that replaced the manual switchboard: think of the classic imagery attached of operators physically patching lines. VoIP PBX systems are now beginning to replace traditional PBX systems. Yes, technology changes that fast.

Many companies are still using their legacy PBX systems as they made a large investment on it within the last 15 years, but the bulk of PBX systems purchases were about ten years ago. Now, as systems begin to age IT departments are beginning to replace the decaying technology with the more modern VoIP PBX alternative.

Hardware vs. Software

An IP PBX runs mainly on software, and not hardware like its PBX counterpart. For this reason IP PBX systems are significantly more flexible than traditional PBX systems, as you can have an unlimited and ever-changing number of extensions. Also, with advances in microprocessor technology IP PBX has become significantly faster and cheaper to implement.

The scalability options of IP PBX are limitless, as the addition of new features simply requires a software update from the manufacturer, and not a new hardware rollout.

IP PBX systems can exist as a software-based system, hardware-based system, a mix or as a virtual/hosted system.

Hosted vs. Non-Hosted

When choosing an IP PBX you have the choice of running all the hardware and software onsite, or the choice to have it hosted. Companies who want to avoid the initial investment in hardware opt for the hosted solution, whereas companies more interested in keeping their data protected within their own security protocols will opt for an onsite IP PBX.


IP PBX technology offers significantly more features than PBX hardware-based technologies, mainly due to the fact that IP PBX feature additions can be done through a simple software update. While features differ with configuration and Internet service providers, the main features of an IP PBX include:

  • Call transfer
  • Conference calling
  • Live Monitoring
  • Unlimited auto attendants

Unlimited extensions
Unlimited voicemail boxes
Extension groups
Direct inward dialing (DID)
Call pickup
System diagnostics
Cell phone integration
Find me/follow me
Call return
Voicemail to Email
Voicemail web access
Inbound call description
VoIP compression
Integration with Outlook
Announcement interface
PA system
Remote phones
Advanced user interface
Call parking
Dial by name directory
Reporting/analytics tools
Integration with CRM and SAP
System admin console (sometimes web-based)
Conference calls
Multiple hold music
Digital failover
Unified messaging
Analog phone support
Call screening
Fax to Email and fax PDF support
And more

As aging PBX technologies begin to degrade companies are updating their phone systems to IP PBX. IP PBX has better benefits and ROI as they are faster, more effective, offer better analytical controls, have richer features, are scalable and are extremely cost effective.

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