What is an IP PBX? How it works and the advantages of the IP PBX system (2023)

What is an IP PBX? How it works and the advantages of the IP PBX system (1)

Thinking of installing a new phone system? You have many options, and IP PBX is just one of them.
If you already have a private telephone exchange (PBX), switch to a cloud-based onelink providerfor a PSTN connection it is worth it.
It's not as easy as you think. After all, you don't want to inherit a new set of problems with incoming calls. In this guide, you'll learn more about IP-based telephony solutions and how they differVoIP, and some limitations you should be aware of.

(Video) How an IP PBX works and its Benefits

  • What is an IP PBX?
  • How does an IP PBX work?
  • Advantages of IP PBX system
  • Limitations of IP PBX
  • VoIP phone system vs. IP PBX
  • Our recommendations

What is an IP PBX?

IP PBX is a telecommunications device that enables voice connection with desk phones in the building. Tracks outgoing and incoming calls over your phone network via an Internet connection.

Let's analyze this definition further.

  • IP– Internet Protocol (IP) is a way of transferring data to another server. This technology makes it possible to make calls via the Internet.
  • PBX– A private telephone exchange is known as a PBX, which is an internal telephone network. The PBX is on-site or you can host it securely from the cloud.

An IP PBX phone system can make and receive phone calls over the Internet, and analog phones can be maintained throughout the office.

(Video) IP PBX - What is it? How does it work? What are the benefits?

What is an IP PBX? How it works and the advantages of the IP PBX system (2)

You can set up a PBX using open source solutions that require knowledge of Linux. You should also know about call routing and comfortable management of Asterisk based PBX servers. This approach has many advantages and disadvantages. It's not for everyone.
But first, let's see how we got here.

History of PBX

UPBXworks as a board trader. Switchboards first appeared in 1878, two years after the telephone was invented.
Selected employees had access to a telephone line. When an outside call came in, the operator answered and transferred the call to your line. Offices have separated their telephone system from the rest of the public telephone network (PSTN).
Back then, tolls were a big deal. The cost of initiating phone calls with colleagues and clients (including personal calls) has skyrocketed. This era was long before cell phones.
Fast forward to 1970 and the PBX has evolved in its functionality. You could automate call routing. Incoming phone calls were answered and "dialed" when the callers could reach the phone numbers. Also at this time, mail-order catalogs with toll-free telephone numbers encouraged an increased number of calls for business purposes.
By the early 1990s, automated telephone systems were the standard in business. Businesses have embraced advanced features such as Interactive Voice Response (IVR), call forwarding, caller ID, and Voice over Internet Protocol (VIP).VoIP).
Not long after administrators installed the PBX, they saw the features of the next generation of telecommunications hardware. Born out of the frustration of replacing my own gearhost PBXgrew in popularity.
Call centers in the early 2000s introduced today's PBX features such as headsets, softphone applications, and call routing. Innovations like these have provided significant cost savings for analog phone systems.
Related:33 must-have call center phone system features

How does an IP PBX work?

IP PBX phone systems make and receive phone calls over the Internet. It does this by converting analog voice signals into digital ones. From there, it routes calls to the VoIP service provider to manage the initiation and termination of each call.
Essentially, IP-based voice service uses a session initiation protocol (SIP). This universal protocol has become the standard for VoIP phone systems. For a PBX, you would use SIP trunking, which offers multiple voice channels.

(Video) What Is IP PBX & How Is It Different From Traditional PBX?

What is an IP PBX? How it works and the advantages of the IP PBX system (3)

It remains unchanged within the PBX. Users can call each other, check voicemail and create call groups as before. It's designed.
Outside of the PBX, the VoIP provider will provide a set of credentials for one or more SIP trunk accounts. Once approved, incoming calls are presented to your PBX for acceptance. Users can also automatically access an outside phone line through their SIP line.
The PBX itself decides whether calls will be handled internally or forwarded to the PSTN.
You should be aware of its limitations, but first here are the benefits of adding a VoIP gateway to your PBX.

Advantages of IP PBX system

Adopting an IP PBX in your company can have some advantages. Here are a few reasons why it's a good investment.

  1. Lower communication costs– Internet-connected telephone exchanges can provide much greater savings than their analog predecessors. VoIP providers like Nextiva offer capped and unmetered connection services.
  2. Cloud-based reliability– Connect your existing PBX with proven cloud reliability. ONEreliable VoIP serviceyou will have more data centers for reliable operation. Even if their PBX fails, they can route calls elsewhere.
  3. Keep existing hardwaree – You can keep everyone productive and reduce hardware costs by using the same hardware already connected to your PBX. All you need is your SIP address, password and domain and you're good to go.
  4. minimal change- Changes can scare many companies. Look to SIP trunking as a gateway to experience the value of a VoIP phone system. As your business grows, you can increase the number of voice channels with minimal configuration.

Let's assume that you or your IT staff are already familiar with PBX phone systems. In that case, an IP PBX could be a smart temporary solution. besides thatSIP trunksThey are location-independent, so you can get started in record time if you move offices.
Related:12 benefits of SIP trunking that you probably didn't know about

(Video) How IP-PBX Works and Benefits

IP PBX System Limitations

Not all companies are in a good position to use an IP PBX. Here are some disadvantages you should consider before making the switch.

  1. Technical abilities- Managing a local telephone exchange is not for the faint of heart. System administrators must be familiar with installing and configuring Linux operating systems. experience withfree central officeoEstrellaOpen source software is essential.
  2. I can't work remotely– Even with IP connectivity, most on-site PBX phone systems cannot be operated from home. In 2021, this option is essential for remote workers. This functionality can be as simple as downloading an app for your Android or iPhone and logging in.
  3. Limited scalability– IP PBX is as scalable as there are users who need to answer phone calls. As your team expands beyond what your PBX can handle, you'll encounter challenges along the way, such as busy signals.
  4. fewer features- Traditional office phone systems lack the features seen in unified communications (UCaaS) platform. Videoconferencing, mobile softphones and instant messaging are separate. Most small businesses don't have the time or additional resources to set them up one by one.

VoIP phone system vs. IP PBX

Which business phone system to choose? Here's a comparison of three types of phone systems you might want to consider.

WorkVoIPPower plant IP
Initial costs$$$$$$$
Monthly expenses$$$$$
Easy to useLeaveVery
call functionsVoice, PSTN connectivity, video conferencing, mobile device compatibility, unified communications and call encryptionVoice and PSTN connection
MaintenanceYesOperating system updates, software updates and network settings
reliabilityRedundant data centers, automatic call routingOne way calls, dropping results in busy signals
scalabilityUnlimitedLimited to PBX capacity
remote workYes, desktop applications and mobile communicationsYes

From the comparison table above, IP PBX provides more value than a traditional analog phone system. However, Voice over IP offers users the most options at a lower price.
It depends on your business needs, but based on overall value, features and price, a cloud-based VoIP phone system is ideal.
Related:VoIP vs. Landline: Which Phone System is Right for You?

(Video) What is PBX?

The point

Just like people get an email address from Google, you can get yours.telephone services for companiesfrom Nextiva, a trusted VoIP provider.
Voice over Internet Protocol upravlja i SIP trunk icloud phone system. Both options are significantly better than analog landlines.
While an IP PBX server seems cheaper, you may have to pay maintenance fees and technical bottlenecks. Is this a cost you are willing to bear?
Cloud PBXs allow you to take advantage of new communication features faster. Let's say you need to expand your customer support team. Your VoIP service provider can provide you with a fully featured voice solution. This power allows you to focus on your customers and not have to set up a Linux-based PBX server.

Business phone system made for 2021

It's the perfect time to upgrade your Private Branch Exchange. We understand; Not everyone can snap their fingers and switch to VoIP overnight. There is an alternative.
switch to oneSIP Trunk Providerit's an attractive opportunity to get the best of both worlds. You get better uptime and reliability in the cloud with endless cost savings. This Voice over IP technology is a great way to get more out of your hardware without disturbing your employees.
Let's say you're ready to ditch your on-premises PBX. In that case, Nextivascloud headquartersdirects communication and improves teamwork. You'll also appreciate the resiliency that unified communications offers.
With Nextiva, you become a friend24/7 customer serviceand innovative tools to help your team succeed.
Related:10 Signs It's Time to Upgrade Your Business Phone System


What is an IP PBX? How it works and the advantages of the IP PBX system? ›

An IP PBX system is a system that allows users to share several phone lines and switches call between VoIP (voice over internet protocol) users. An IP PBX system can also switch calls between traditional telephone users and VoIP users in the same way as its legacy counterpart.

What is IP PBX and how it works? ›

An IP PBX system is a system that allows users to share several phone lines and switches call between VoIP (voice over internet protocol) users. An IP PBX system can also switch calls between traditional telephone users and VoIP users in the same way as its legacy counterpart.

What is the advantage of IP PBX? ›

Lower communication costs – Internet-connected PBXs can provide much higher cost-savings than their analog predecessors. VoIP providers like Nextiva offer both metered and unmetered trunking services. Cloud-based reliability – Connect your existing PBX to the proven reliability of the cloud.

What is IP PBX in networking? ›

An IP PBX ("Internet Protocol private branch exchange") is a system that connects telephone extensions to the public switched telephone network (PSTN) and provides internal communication for a business.

What is the main function of PBX? ›

A private branch exchange (PBX) is a private phone network used within a company or organization. The primary function of a private branch exchange (PBX) is to allow employees to connect with each other internally as well as make and receive external phone calls.

What is a PBX for dummies? ›

PBX handles calls between fax and phone machines by being physically connected through copper wiring. Calls can be transferred between company phones via the PBX, and incoming or outgoing calls are routed through the PBX.

What are the two main functions of a PBX system? ›

PBX systems perform four main call processing duties:
  • Establish connections between the phone sets of two users.
  • Maintain connections as long as the users require.
  • Disconnect a connection per the user's requirements.
  • Provide information to the organization for accounting and analytics.

What are the advantages and disadvantages of IP telephony? ›

We wrote the full guide weighing the advantages and disadvantages of VoIP phone systems.
Make the Switch to VoIP Today.
• Lower costs• Reliable internet connection required
• Increased accessibility• Latency and jitter
• Complete portability• No location tracking for emergency calls
• Higher scalability
4 more rows

What are 2 benefits of an IP based network? ›

Advantages of an IP Network

One main benefit of creating a private IP Network for your office is security. Your private network connects only the computers within your office and keeps viruses and hackers out. You also have the advantage of only relying on your network to function.

What are the types of IP PBX? ›

There are three types of PBX systems: analog, digital and cloud-hosted. Cloud-hosted PBX has become the most popular type in recent years and offers nearly unlimited flexibility.

What are the features of IP PBX? ›

The combination of VoIP phones and an IP PBX connected to one or multiple SIP trunks can do more than replace a traditional business phone line. This setup has all the features of an analog phone system, including call routing, call forwarding, call queueing, and voicemail.

What does PBX mean in it? ›

PBX stands for private branch exchange, which is a private telephone network used within a company or organization. More and more modern companies are opting for cloud PBX systems for small businesses.

What is the structure of a PBX? ›

The basic structure of a PBX consists of lines and stations. Lines are simply connections to the PSTN that are supplied by a service provider. Stations are endpoints such as desk phones, fax machines or credit card terminals.

What is the difference between PBX and IP PBX? ›

What is the difference between PBX and IP-PBX? IP PBX is another way of referring to VoIP phone systems and is an internet-based phone service. PBX is the original phone system, using landlines to allow outbound and inbound calls. PBX systems also allow employees to make internal calls to each other.

Why do companies use PBX? ›

It allows users to make, receive, and transfer calls via traditional phone lines and over the Internet. A VoIP service provider is needed to be able to make calls over the Internet. Do companies still use PBX? Companies still use PBX because it's much more cost-efficient than a traditional phone setup.

What is the disadvantage of IP system? ›

The main con is that obtaining a patent, registering a trademark, and maintaining those protections can be expensive. Costs associated with protecting your IP rights include: Lawyer fees.

What is the main disadvantage of using your IP? ›

One of the main disadvantages of using a dedicated IP address is the increased cost. Dedicated IP addresses are typically more expensive than shared IP addresses, as they are not shared among multiple users. This can make them less affordable for small businesses or individual users.

What is the major advantage of Internet telephony? ›

Internet Telephony offers many advantages compared to traditional telephony as it makes business communication smarter, more flexible, more comfortable and more cost effective. One of its main benefits is that is allows multiple device integration including smartphones and desk phones.

What are the three benefit of IP security? ›

Data origin authentication—identifying who sent the data. Confidentiality (encryption)—ensuring that the data has not been read en route. Connectionless integrity—ensuring the data has not been changed en route.

What is IP and why is it important? ›

An IP is an internet protocol address. Essentially, it is a numeric value assigned to a network device, and it is used for the identification and location of a network device. IP addresses are assigned to every type of network device.

What are 3 advantages provided by a home network? ›

Faster and more reliable connection to the Internet. Increased security, as no outside users can access your network. Easier set-up and troubleshooting than wireless connections.

Why is it called PBX? ›

A PBX is a Private Branch eXchange, a hardware system that handles routing and switching of calls between a business location and the telephone network. Originally, the PBX was not a thing but a switchboard operator; their name originates from the way they interact with the public switched telephone network (PSTN).

What are the four main IP types? ›

Patents, trademarks, copyrights, and trade secrets are valuable assets of the company and understanding how they work and how they are created is critical to knowing how to protect them.

How do I set up an IP PBX? ›

This basically involves following a few simple steps:
  1. Plug the telephone cord into the 'telephone line' input on your PBX console.
  2. Connect the other end into a wall jack (allowing it to make and receive phone calls)
  3. Insert the PBX plug into the console, and the other end into the wall outlet.
Jan 24, 2023

Is PBX a software? ›

PBX, or Private Branch xChange, refers to inbound and outbound call management software and is similar to a switchboard operating system for routing calls.

Is IP PBX a VoIP? ›

VoIP PBX also referred to as IP PBX, is a business telephone system that transmits phone calls over an IP network rather than through PSTN (Public Switched Telephone Network), or the traditional circuit-switched telephone network. VoIP PBX can be deployed on-premises or in the cloud (cloud-based PBX or hosted PBX).

Is IP PBX same as VoIP? ›

The key difference between PBX vs VoIP (Voice over IP) is that a standard PBX system uses landline telephones to send/receive calls over the PSTN network, while VoIP sends/receives phone calls over the Internet.

What is the difference between VoIP server and IP PBX? ›

Some IP PBX installations convert the digital signals on-site and use phone lines connected directly to the PSTN. VoIP is an approach to transfer calls over the internet. With VoIP, the phone sends digital call data to the VoIP provider. Then, data centers translate the signals to analog and send them to the PSTN.

What is the difference between hosted PBX and IP PBX? ›

The fundamental difference between these types is: the hosted IP PBX software can be operated online and therefore no installation is necessary, while the onsite IP PBX requires an installation of PBX hardware at the workplace.

What is the difference between a PBX and a phone system? ›

Basically, a PBX is an on premise phone system which is not connected to a data network. VoIP (Voice over Internet Protocol) is another form of phone system technology. VoIP means the voice is converted to data, packetized, and transferred over data network. VoIP can be on premise or it can also be hosted.

Are PBX systems still used? ›

Do companies still use PBX? Companies still use PBX because it's much more cost-efficient than a traditional phone setup. There are no extra charges for long-distance, multiple calls can be made and received at once, routing is available, and internal and external transfers are available.


1. What is IP PBX? How does IP PBX works?
2. IP PBX - how it works
3. What is a PBX?
4. What is PBX? How it Works
(GetVoIP - Expert Tutorials, Reviews, Top Providers)
5. What is a PBX (& How it Works)
6. How an IP PBX works and its Benefits
(Kenneth Bishop)


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