What is an IP PBX system?

What is an IP PBX system?
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Before the internet, all phone calls went through the phone companyís network, which required analog phones on each end. Then, beginning in the 1990s, developers created the ability to channel calls through the internetís data network. This is known as Voice Over Internet Protocol (VoIP).

VoIP works in the following sequence:
1. Analog telephone calls are converted to digital signals.
2. The digital signals are translated into Internet Protocol (IP) packets.
3. The IP packets are converted back to telephone signals, and received by a telephone on the other end.
VoIP makes voice and data networks converge: users had access to the internet, analog phone calls, and VoIP phone calls all through the same line.
This new system was revolutionary for many businesses, but it was still an investment. Companies had to once again replace their equipment and software, this time with expensive IP systems and phones. Despite the expense, the IP PBX system was an advantageous option for many businesses. Since it was less costly than a PBX system, an option only affordable to large corporations, any company could use an IP PBX system. The system wasnít cheap, but it saved on overhead costs and provided certain features which made it a valuable investment for companies of all sizes.
The evolution of VoIP technology
As the internet continued to develop, new possibilities arose. Instead of restricting calls to IP PBX equipment, VoIP systems allowed communication between computers, phones, and IP phones. This new system was cloud-based and hosted by an outside provider. It functioned as an application, offering multiple channels of communication. Users could video chat, share data, instant message, and more. They could do so from anywhere, as long as they had on hand a device connected to the internet.
The VoIP system also allowed companies to integrate their communication with other applications. Salespeople could now track calls within CRM systems and use notes from previous conversations. Communication became connected and the possibilities endless.
Pros and Cons of PBX, IP PBX, and VoIP technology
In todayís digital world, many would expect VoIP systems to be more popular than PBX and IP PBX systems, but that isnít always the case. Each system has its advantages and disadvantages, which make
them better suited for certain situations. These pros and cons will help you understand which system would be best for your company.
PBX Pros:
Reliability: PBX systems still operate through phone lines, which can protect your communications from power outages and internet failures. Some phone lines still operate during power outages, allowing you to keep your phone lines up.
Accessibility: Companies that use PBX systems house their own equipment and employ their own IT staff to maintain and run the system. This gives them full control and access to the equipment and software.
Sound Quality: Calls travel through landlines, which makes for the best sound quality and reliability over time.
Convenience: Because PBX systems existed for so long, many companies already have the equipment they need. Instead of paying for and installing new hardware, these companies can continue to use what they have. For companies without internet access, a PBX system is the best option.
PBX Cons:
Availability: Though PBX systems still subsist, digital technology has almost completely replaced analog. Unless a company already has a PBX system in place, this option isnít available.
Cost: The cabinets that house PBX systems are expensive, but necessary for operation. Even after paying for the equipment, companies also have to pay IT salaries and monthly charges.
Limitations: PBX systems have a limit of phone numbers and lines, and any additional ones can be costly. Moreover, calls can only go through specific devices within the system, instead of allowing for flexible call options.
IP PBX Pros:
Usability: IP PBX systems require less technical knowledge to use and maintain. Companies wonít need dedicated IT departments or sophisticated training to use and update their systems.
Cost: PBX systems can have high monthly subscription charges. IP PBX systems can lower monthly operating costs, even if there are a high number of users. Support, upgrades, and maintenance are usually inexpensive and companies donít have to sign contracts with a hosting company.
Phone Mobility: IP PBX systems are IP based, which allows users to move phones to different connections without issue, much like PCs.
Extensions: To add a remote or branch extension to a system, users just need another IP phone and internet connection. This allows companies to have phone access from home and other locations.
IP PBX Cons:
Unreliability: An IP PBX system is only as reliable as the internet connection it uses. If a company loses power, has equipment malfunctions, or loses their internet connection, the telephone system canít work.
Sound Quality: Similarly, if a companyís internet signal and broadband strength is low or faulty, calls will lose sound quality. If the internet network provider is unable to support a high quality of sound on the local network, communication will be unreliable.
Limited Options: An IP PBX system is hosted onsite. Though this gives the company more control, it also limits them to the resources they can access and afford.
Equipment: Companies still have to use IP phones to operate this system.
VoIP Pros:
Cost: The lack of required equipment and maintenance reduces costs. Calls (even long-distance and international) donít incur additional charges. Fixed monthly subscription fees allow companies to budget appropriately.
Flexibility: Receive calls from any location on any device. Calls can go to a cell phone or computer when the user is out or at home. Therefore, scheduling and communication become a simpler matter.
Disaster recovery: Calls wonít go through without internet, but the system can still operate in an emergency. Because of remote hosting, calls are accepted and sent to voicemail.
Features: These include conference calling, caller identification, call waiting, voicemail options, call transfer, call queues, and interactive voice response.
Size: Bandwidth limits the maximum amount of numbers and users. Companies can also use multiple local and international numbers on the same system.
Sound Quality: Though sound quality relies on a good internet connection, fiber optic cables eliminate any quality issues.
VoIP Cons:
Instability: Like an IP PBX system, VoIP systems are dependent on the internet. In the case of an internet or power outage, calls wonít go out.

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