Hosted PBX

What is Hosted PBX?

First off, when it comes to business telephone systems, it’s important to keep in mind that business environments most often require the existence of multiline telephone systems, which can include everything from private branch exchanges of a large – scale to very small key systems. If one were to take PBX systems into consideration, the first thing that would probably come to mind is what does “PBX” stand for in the “Hosted PBX” term? Well, PBX is an abbreviation for Private Branch eXchange, which is a term used to describe a telephone exchange that has the role of an office or a business. On the other hand, a telephone exchange operated for numerous businesses or the public by a telephone company or even a common carrier is the opposite of a Hosted PBX, or in other words – the generally accepted means of establishing a business telephone system. There are also a few other terms for a PBX that are in use:

  • Private Automatic Branch eXchange or PABX;
  • Electronic Private Automatic Branch eXchange or EPABX;
  • Computerized Branch Exchange or CBX.

How does it work?

The PBX functions by using trunk lines to connect the internal telephones belonging to a private business or any other type of organization to the PSTN or public telephone switched network. In addition to this, a PBX also connects all of the organizations internal telephones to each other, thus creating a private internal network of business telephones. “Extension” is a term used to describe any and every end point located on the branch due to numerous types of devices that are commonly included in a PBX, such as modems, fax machines, telephones etc.

There is a need to separate the understanding of a PBX and a “key system”. The largest and main difference that has benefited the development and popularity of PBXs in the past is the fact that a PBX is designed to automatically select the outgoing line, meaning that there is no human input whatsoever. On the other hand, it is a requirement for the users of key systems to use manual outgoing line selection, which logically, requires a slight effort and some time, as well.

Who does it have to thank?

PBX systems wouldn’t be as developed and popular as they are today if it hadn’t been for two major and unexpected developments in the 1990s:

  • A focus on core competence;
  • Packet switching understanding and data networks growth.

The first development focused on the realization that handling one’s own telephony is simply not one’s core competence and this realization was wide spread among relatively smaller companies. Smaller companies have always had problems arranging personal PBX services, which is why the hosted PBX concept was originally created.

The second development refers to the fact that companies felt that the internet increased the attractiveness of packet switched communications immensely, in addition to the fact that using packet switched networks for telephone calls was incredibly tempting, since they already needed such networks for data. The VoIP PBX has these two factors to thank for its present existence.