What is IP PBX?

An IP PBX is a telecommunication device that provides voice connectivity to desk phones within a building. It oversees the outgoing and incoming calls across its telephone network using an internet connection.

  • IP – Internet Protocol (IP) is the method of transmitting data to another server. This technology means that calls are established over the internet.
  • PBX – A Private Branch Exchange is known as a PBX, which is an internal telephone network. A PBX exists on-premises, or you can host it from the cloud securely.

An IP PBX phone system can make and receive phone calls over the internet while maintaining analog phones throughout the office.

How does an IP PBX work?

IP PBX phone systems place and receive phone calls over the internet. It does so by converting analog voice signals into digital. From there, it directs calls to a VoIP service provider to manage the initiation and termination of every call.
At the core, IP-based voice service uses Session Initiation Protocol (SIP). This universal protocol has become the standard for VoIP phone systems. For a PBX, you would use SIP trunking, which offers multiple voice channels.

SIP Trunking Diagram - SIP trunking connects existing communications hardware to the telephone network.
SIP trunking connects existing communications hardware to the telephone network.

On the inner side of a PBX, that remains unchanged. Users can call each other, check voicemail, and set up call groups as they could before. It’s by design.
On the outer side of a PBX, a VoIP provider would give a set of credentials for one or more SIP trunking accounts. Once authenticated, incoming calls are presented to your PBX to accept. Users can also reach an outside phone line by way of your SIP trunk automatically.
The PBX itself determines if calls are handled internally or relayed over to the PSTN.
You should know its limitations, but first, here are the advantages of adding a VoIP gateway to your PBX.

Benefits of IP PBX systems

Adopting an IP PBX in your business can come with some perks. Here are some reasons why it’s a wise investment.

  1. Lower communication costs – Internet-connected PBXs can provide much higher cost-savings than their analog predecessors. VoIP providers like Nextiva offer both metered and unmetered trunking services.
  2. Cloud-based reliability – Connect your existing PBX to the proven reliability of the cloud.  will have multiple data centers for dependable performance. Even if your PBX goes down, they can route calls elsewhere.
  3. Keeps existing hardware – You can keep everyone productive and keep your hardware costs low by using the same hardware that’s already attached to your PBX. The only thing you need is your SIP address, password, and domain, and you’re set.
  4. Minimal change – Change can be intimidating to many businesses. Look to SIP trunking as a gateway to experiencing the value of a VoIP phone system. As your company grows, you can scale up the number of voice channels with minimal configuration.

Suppose you or your IT staff are already familiar with PBX phone systems. In that case, an IP PBX could be a smart stop-gap solution. Additionally,  are location-agnostic, so you can get up and running in record time if you move offices.