The world of telecom/VoIP terms is an overlapping muddle of "same same however different." PBX, IP PBX, hosted PBX: They're as similar as their names indicate but unique. Many people charged with discovering a new service phone system aren't knowledgeable about these terms, let alone the specific differences that affect their buying choice.

And why would anybody keep up with telecom specs? Once you have a phone system in place, it's hopefully something you hardly ever think deeply about again. The exception, naturally, are the lucky market folks who dive into the mess to bring you tech-to-English translations like this OnSIP blog site. So let's get into it.

IP PBX

You might understand the term PBX: private branch exchange. PBX systems are bulky and expensive, and standard analog systems link directly to PSTN copper lines. Modern PBX systems-and by "contemporary" here we mean post-Internet-are IP PBX to deal with digital traffic. Basically, IP PBX is where PBX satisfies VoIP capabilities. IP PBX systems are still on-premises, so they're not the less expensive hosted PBX from a VoIP service provider like OnSIP.

Onsite PBX systems need a lot of space and a devoted IT group. For corporations, they can work well, however they're fantastic for cash-strapped startups and SMBs that may not have the office for a telco-only server room, let alone the budget plan for the needed IT folks.

VoIP Gateways: Bridging PSTN & VoIP

PSTN calls send voice signals along copper wiring. VoIP calls break voice signals down into little digital packets for travel across the Internet. In other words, the PSTN is analog, while VoIP is digital. A VoIP entrance is the piece of hardware that bridges the 2 systems by changing call traffic from analog to digital and vice versa. Without it, the signals would get stuck trying to switch from one to the other.

VoIP to VoIP calls resemble e-mails or instant messages: They comprise data packets travelling through cyberspace. This is why VoIP to VoIP calls are nearly always totally free. For VoIP to PSTN calls, the signals require a converter. Think about the VoIP entrance like your outlet converters when taking a trip worldwide. Your electronics work fine-they just require a translator for different voltages and outlet shapes.

Which Do You Choose?

At the start of this blog site, we pointed out that all of this tech is essentially the exact same but different. This is a great way to sum it up, however it's not as useful when you actually need to choose one. Do you want IP PBX or a VoIP gateway? Cloud or on-premises? Add in SIP trunking questions and you'll feel you're back to square one.

This may help clear some things up: All hosted PBX systems are VoIP, however not all VoIP is hosted PBX. An IP PBX system is more detailed to the legacy PBX systems, simply upgraded for IP compatibility. The system still lives onsite, with all of the associated costs, much of which are up front. Hosted PBX, on the other hand, is handled by a provider, and consists of hardware, staff, and maintenance. All you require to do is have a decent Internet connection and VoIP phones.

If you're aiming to upgrade your existing PBX system, IP PBX might be the ideal move. Otherwise, hosted VoIP has all of the tools and quality you need for smooth business operations.