IP PBX: What It Is and How Does It Work? A Complete Review

Are you looking to take your business communications to another level? If so, have you considered IP PBX?

In this age of digitization, where all systems are being moved online, many organizations too have started to adopt cloud-based communication solutions for their businesses. There are many pros and cons to this technology, and so one should research well before making any commitments.

Hence, in this article, we shall look at what an IP PBX technology is, its pros, its cons, and how it is much better than a traditional phone system.

What is IP PBX?

An IP PBX (Internet Protocol Private Branch Exchange) system is a type of PBX phone system that uses IP technology to manage large and small business communications over a network.

The most commonly used types of IP PBX systems are:

1. On-premise IP PBX
2. Hosted IP PBX (Cloud-based IP PBX)
3. Hybrid IP PBX
4. Software-based IP PBX
5. Virtual IP PBX
6. Open-source IP PBX
7. Mobile IP PBX

An IP PBX is an advanced telephone-switching system that is mainly used by IT administrators, network engineers, customer support representatives, sales teams, remote and hybrid workers, front desk staff, administrative assistants, and others.

It is highly beneficial for any organization looking for a flexible, cost-efficient, and scalable communication system that leverages Internet connectivity for business operations.

How does an IP PBX work?

An IP PBX uses modern data networking technology such as VoIP (Voice over Internet Protocol) to manage business phone calls over the company’s data network and the internet rather than on traditional telephone lines.

Here is a step-by-step explanation of how an IP PBX system works.

1. Conversion of call signals

The calls are made either through an IP phone or a normal phone. Initially, the voice signals are converted into digital data packet signals for transmission over the Internet. This is done by using an analog-to-digital converter (ADC) or through SIP trunks and gateways. This also enables VoIP to make calls using traditional phones.

2. Transmission of data packets

IP PBX systems utilize VoIP protocols such as SIP (Session Initiation Protocol) and RTP (Real Time Protocol) to transmit calls via the company’s local area network (LAN) or the Internet.

3. Call routing

The IP PBX server acts as a control hub, handling call routing for both internal and external calls. The internal calls are routed through the internal network, whereas the external calls are routed over the internet to the PSTN (public switched telephone network) or directly to another IP phone whose recipient is also using VoIP. This is done by communicating with a SIP trunk or VoIP provider.

4. Call handling

IP PBX then handles various call features, such as call transfer, call conferencing, hold, and voicemail. IP PBX also manages the call setup, maintenance of call quality, and termination of calls.

5. Interface management

IT administrators and authorized personnel manage IP PBX systems through an intuitive web-based interface. The employees can configure user settings, add/remove extensions, set up voicemail boxes, manage call flows, and monitor call performances. 

Top features of IP PBX

Now, let us look at some of the top unique features of an IP PBX system that sets it apart from its predecessors.

1. Voice messaging

IP PBX enables companies to send voicemail messages as audio files into a user’s email inbox. This kind of voicemail feature allows users to easily access and manage messages from any device.

2. Call conferencing

Multiple people can attend virtual meetings at the same time from various locations due to the integrated video conferencing tool present in IP PBX systems. 

3. Unified communications

IP PBX system enables users to combine voice calls, video conferencing, and instant messaging into a single platform, facilitating efficient unified communication across different media channels.

4. Remote working capabilities

IP PBX systems come with features such as fixed/mobile convergence and remote IP extensions that enable users to make and receive calls from any internet-connected device, even while working remotely. 

5. Reporting and analytics

Most IP PBX systems now come with an analytics and reporting tool to offer detailed reporting and analytics on call volume, call duration, and user activity. This helps large as well as small businesses to significantly optimize and improve their communication strategy.

What are the benefits of IP PBX systems?

Some notable advantages of an IP PBX system are as follows:

1. Cost efficiency

IP PBX systems require less hardware infrastructure compared to traditional PBX systems. The cost to set it up and maintain it is also very low.

Further, IP PBX uses the internet to route calls to various geographical locations. This significantly reduces the cost of long-distance and international calls.

2. Scalable and reliable

IP PBX systems do not require any major physical infrastructural changes during business expansion. These systems can be seamlessly scaled based on the number of growing users and communication needs. Companies can reach remote locations without needing to pay for new phone lines. 

The data gathered from an IP PBX system is stored on the cloud or in the servers and data centers of the service providers. This ensures that the system is constantly providing services even when one server goes down.

3. Enhanced features and integration

Traditional PBX system only provides the users with common call features such as call forwarding, call waiting, etc. IP PBX system offers features such as voicemail-to-email, video conferencing, call recording, call analytics, etc. 

These features can easily be integrated into existing business applications such as chat tools, email software, CRM software, etc., for more effective unified communication.

4. Mobility and remote access

IP PBX systems allow users to use more than one type of device to make a call. The device can be a computer, laptop, traditional phone, or softphone (a special kind of VoIP phone). All one requires is access to the Internet. This makes it much more suitable for employees and companies who work offsite or remotely to be connected to each other effectively. 

5. Easy maintenance

IP PBX system requires minimal configuration efforts during setup. Since most IP PBX systems are cloud-based or software-driven, there is no need for on-site tech support. All the issues and updates are handled by the service provider.

Further, the IT staff can easily manage, monitor, and troubleshoot IP PBX systems remotely through an intuitive web-based interface. 

Drawbacks of an IP PBX system

Although IP PBX is highly advanced compared to its counterparts, it still has some disadvantages. The cons of an IP PBX system are as follows:

1. Internet dependency

IP PBX systems greatly depend upon the strength and bandwidth of the internet connection. Poor internet connection and lack of sufficient bandwidth can cause issues while performing data-intensive tasks and can also lead to poor voice quality, jitters, and calls being dropped.

2. Security issues

Since IP PBX systems use the internet for data transmission, they are highly vulnerable to cyber security threats such as hacking, call eavesdropping, phishing, and denial-of-service (DOS) attacks.

To protect the enterprise from these threats, the system administrators and tech teams must be highly skilled in configuring strong firewalls, encryption softwares, and regular security updates into the existing business phone systems.

3. Infrastructural costs

Although the long-term operational costs of an IP PBX system are lower, the initial infrastructural setup requires a high investment. Not only does it require the installation and configuration of hardware such as IP phones, switches, routers, and internet network infrastructure, but it also requires excellent staff and expertise.

4. Power dependency

Since business communications from IP PBX depend upon the internet, a power outage can take down the whole system. However, this doesn’t seem to be a problem for traditional PBX systems that use PSTN lines for calls.

5. Reduced quality of call

For long-distance and international calls, the quality of calls might be unsatisfactory.

6. Emergency calls

Emergency services cannot trace the location of a call made from an IP PBX system. Thus, the people might not receive help on time.

What is the difference between IP PBX and traditional PBX?

The differences between a traditional PBX and an IP PBX are:

Final Words 

Traditional telephony comes with many drawbacks. Thus, a business that decides to rely solely on it will eventually be at a competitive disadvantage due to constant upgrading needs.

A business without an IP PBX will lack a centralized platform that provides seamless, unified communication. It would also miss valuable insights into customer interactions due to which they will miss opportunities to improve their customer strategies.

In short, a business that doesn’t include an IP PBX system in its business phone system infrastructure will be less adaptable to modern communication needs and will cost companies a significant amount of time, money, and other valuable resources. 

Thus, using an IP PBX system would be more flexible, scalable, and feature-rich for businesses, with lower long-term costs and easier maintenance.

FAQs

1. Is IP PBX a server?

Yes, IP PBX is a centralized server that manages and routes phone calls over a network using VoIP technology. It can be hosted either on-premise or on the cloud.

2. Is PBX a VoIP?

No, PBX (Private Branch Exchange) is not the same as VoIP (Voice over Internet Protocol). PBX is a telephone switching system that makes calls over the Internet using VoIP, whereas VoIP is the technology that assists in the transmission of voice calls over the Internet.

3. What are some popular IP PBX systems?

Some popular IP PBX systems are:

• HoduPBX
• 3CX
• NCH Axon
• CISCO
• Digium
• Xorcom
• Sangoma

4. Can I use an IP phone without PBX?

Yes, you can use an IP phone without a PBX, but its functionality will be highly limited compared to using it with an IP PBX system. 

You can only call someone using an IP phone without PBX. However, if you use an IP phone with PBX, you would also be able to route calls, conference calls, and so on.

5. Does PBX require internet?

Yes, PBX requires a reliable internet connection and high bandwidth to make calls.

6. What is the IP address for PBX?

The address assigned to the IP PBX server on your computer network is the IP address for a PBX. These static IP address assigned by the network administrator allows devices such as IP phones to be connected to the PBX server.

If the PBX is hosted on the cloud, it will have a public IP address or domain name provided by the service provider for external access.