PBX stands for Private Branch Exchange, which is a private telephone network used within a company or organization. The users of the PBX phone system can communicate within their company or organization and the outside world, using different communication channels like Voice over IP, ISDN or analog. A PBX also allows you to have more phones than physical phone lines (PTSN) and allows free calls between users. It also provides features like transfers, voicemail, call recording, interactive voice menus (IVRs) and ACD call queues.
PBX phone systems are usually much more flexible than proprietary systems, as they are using open standards and interfaces. Modern PBX phone systems are based on standard hardware, which is cheaper and can easier be replaced than a closed systems. There are two kind of PBX system.
A Conventional Small Business PBX
Traditionally, a small business PBX (Private Branch Exchange) is a telephone switching system that manages incoming and outgoing calls for a company's internal users. A PBX is connected to the public phone system and automatically routes incoming calls to specific extensions. It also shares and manages multiple lines. A typical small business PBX system includes external and internal phone lines.
IP-Based Small Business PBX
An IP PBX can do everything a traditional small business PBX can do and more. It performs the switching and connecting of Voice over IP as well as landline calls.
A conventional PBX requires two networks, one for data and another for voice. An IP PBX system runs on an IP data network, which saves costs and minimizes network management.
You can use IP phones, soft phones (which don't require any phone hardware beyond a computer and a microphone headset), and landline phones on an IP PBX phone system.
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