The world of telecom/VoIP terms is an overlapping muddle of "same same however various." PBX, IP PBX, hosted PBX: They're as similar as their names imply but unique. Many people charged with finding a new business phone system aren't acquainted with these terms, let alone the specific distinctions that impact their purchasing choice.
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And why would anyone stay up to date with telecom specifications? Once you have a phone system in place, it's hopefully something you seldom believe deeply about once again. The exception, obviously, are the fortunate industry folks who dive into the mess to bring you tech-to-English translations like this OnSIP blog site. So let's enter into it.

IP PBX

You might the term PBX: private branch exchange. PBX systems are large and costly, and conventional analog systems connect directly to PSTN copper lines. Modern PBX systems-and by "modern" here we suggest post-Internet-are IP PBX to manage digital traffic. Basically, IP PBX is where PBX fulfills VoIP abilities. IP PBX systems are still on-premises, so they're not the less expensive hosted PBX from a VoIP provider like OnSIP.

Onsite PBX systems require a lot of area and a dedicated IT group. For corporations, they can work well, but they're terrific for cash-strapped startups and SMBs that might not have the office for a telco-only server room, not to mention the spending plan for the essential 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. Simply put, the PSTN is analog, while VoIP is digital. A VoIP entrance is the piece of hardware that bridges the two systems by changing call traffic from analog to digital and vice versa. Without it, the signals would get stuck trying to change from one to the other.

VoIP to VoIP calls resemble emails or immediate messages: They consist of data packages travelling through the online world. This is why VoIP to VoIP calls are almost always complimentary. For VoIP to PSTN calls, the signals require a converter. Think of the VoIP gateway like your outlet converters when traveling worldwide. Your electronics work fine-they just require a translator for different voltages and outlet shapes.

Which Do You Choose?

At the beginning of this blog, we discussed that all of this tech is essentially the very same but various. This is a fantastic way to sum it up, however it's not as useful when you really have to choose one. Do you desire IP PBX or a VoIP gateway? Cloud or on-premises? Include SIP trunking questions and you'll feel you're back to square one.
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This might help clear some things up: All hosted PBX systems are VoIP, however not all VoIP is hosted PBX. An IP PBX system is better to the legacy PBX systems, just updated 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 dealt with by a service provider, and consists of hardware, staff, and maintenance. All you need to do is have a good Internet connection and VoIP phones.

If you're looking to update your existing PBX system, IP PBX might be the ideal move. Otherwise, hosted VoIP has all of the tools and quality you require for smooth service operations.