Telephone Systems, PBX

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A Private Branch eXchange (also called PBX, Private Business eXchange or PABX for Private Automatic Branch eXchange) is a telephone exchange that serves a particular business or office, as opposed to one a common carrier or telephone company operates for many businesses or for the general public.

Overview

PBXs are differentiated from "Key Systems" in that users of Key systems manually select their own out-going lines while PBXs select the out-going line (trunk) automatically. Hybrid Systems combine features of both.

Initially, it was private since in general it served a user company, which wanted to have its own branch to save some money in, for example, internal calls. This was done by having the exchanging or switching of circuits done locally, inside the company. Because fax machines, modems (though the PBX may degrade line quality) and many other communication devices can be connected to a PBX, extension developed to a generic term describing all devices connected to a PBX. The PBX's are connected to the outside world by a number of lines called trunk lines.

After the PBX business took off, PBX's started offering services to small businesses and home users that were not available in the operator network. The status quo was changed after several decades by two significant developments during the 1990's. One was the massive growth of data networks (and the concept of packet switching entering public consciousness) and the other one was the trend of focusing on your core competence. Data networks meant that companies had to have packet switched networks anyway, so putting the telephone calls there was tempting as it was. The Internet - and its low price on global communications - was the final straw, and the VoIP PBX was created. Technically nothing was being eXchanged anymore, but the term PBX was very well recognized, and there apparently were no major pushes for a different acronym.

On the other hand, most companies realized that handling their own telephony was in fact not their core competence. Not to mention, PBX services had always been hard to arrange for smaller companies. These combined to create the concept of Hosted PBX, where the PBX was actually managed by the telephone company, and the customer company just had to sign up for a service rather than buy an expensive piece of hardware and then maintain it. This essentially removed the branch from the private premises, making it centrally managed. Some simply gave up the PBX for Centrex service.

The Private Branch eXchange has gone full circle as a term. Originally having started as an organization's manual switchboard or attendant console operated by the telephone operator or just simply the operator, they have evolved into VoIP centers that are hosted by the operators or even hardware manufacturers. These modern IP Centrex systems offer essentially the same service, but they have moved so far from the original concept of the PBX that the term hardly applies at all.

Read more at Wikipedia.org