What is an IP PBX?

VoIP is the hottest new enterprise technology these days. Quite a few organizations have already upgraded to VoIP while others are in the process of switching. Terms like SIP, IP PBX, jitter and latency that were unheard of a few years ago are now on everyone’s lips. The earliest adopters of VoIP where consumers and households but now businesses have also embraced the technology with enthusiasm.

VoIP comes in two different flavors – hosted VoIP services and on premise SIP deployments. As a general rule of thumb, small and medium enterprises prefer hosted services by larger corporations prefer premise-based installations. This is not a hard and fast rule though and you’ll find many organizations go the opposite way.

Hosted VoIP service works in conjunction with the cloud to provide phone services for organizations. Companies can benefit from the latest phone features without having to purchase, maintain and invest in their own hardware. Premise-based deployments typically involve replacing the existing PBX system with an IP PBX.

What does that entail for an organization? Before we dive into the definition and how exactly an IP PBX system works, let’s take a look at the traditional phone set up for a business.

What Is a PBX?

PBX stands for Private Branch Exchange and is a central part of any enterprise phone system. It allows an organization to use its phone lines more effectively. Instead of buying a separate line for each employee who needs a phone, you can share a handful of lines among all the staff. A PBX routes internal calls between workers as well as handling external calls.

Traditionally companies installed the PBX in a separate room or closet since it needs to be on the premises. The PBX is connected to the phone service provider through ‘trunks’ which are a collection of lines made from copper wires. Offices needed experts to manage the PBX since it required extensive configuration each time you make a change. A change could be something small like adding a new number or much bigger issues like moving your office to a new location.

How does an IP PBX Differ from a PBX system?

The essential difference boils down to VoIP technology. An IP PBX used VoIP protocols to handle calls over an Internet connection. This eliminates the need for physical wires and a separate connection to the phone carrier’s location. The IP PBX within the company is connected to the ITSP (Internet Telephony Service Provider) through a virtual connection using the standard SIP protocol. Though you don’t have a physical connection anymore, these SIP lines are still called trunks.

Another difference between the two is that an IP PBX doesn’t have to be located inside your offices. This is the basis for hosted VoIP services. The vendor purchases and maintains the IP PBX instead of the client. They provide the PBX features over the Internet or any other data connection. In a typical on premise deployment however, the IP PBX is usually present somewhere in the company.

Ease of Use

IP PBX systems are much easier to setup, configure and maintain than a traditional box. You can even get free software that provides all phone features and use it with your hardware. SIP is the most widely used protocol in the VoIP industry. As long as your equipment supports SIP everything should work well together.

Any moves, additions or deletions don’t take as much time with an IP PBX either. You can add a new number or turn off a feature through a dashboard interface. You can easily maintain the entire system with fewer employees than before. You can thus reassign them to other, more productive tasks.

Save Money

Since an IP PBX uses VoIP technology, you can benefit from all its advantages. For one thing, all internal calls are free with an IP PBX system. No matter where your employees are sitting, all their calls to colleagues within the organization are free. This can offer you huge savings if you have multiple offices in different countries. Why pay long distance charges if you can avoid it?

International calls become much cheaper as well. You only have to pay for the portion of the call that travels over the PSTN. Quite a few service providers offer unlimited international calling along with the usual pay per call plans. Depending on volume and frequency of calls, you can save quite a bit.

The Foundation for UC

Many companies use their IP PBX deployments as a stepping stone for future unified communication suites. This allows you to bring all your communication channels under one roof so to speak. Everything from videoconferencing to instant messaging will be cohesive and connected through a common interface. An IP PBX is an integral part of any modern VoIP enabled enterprise phone system. Get the right system for your needs and see the effect it can have on productivity!