What is an IP PBX?

ip pbx in a hall

An IP PBX is a private branch exchange (i.e. a telephone switching system within an organization), which allows calls to be placed and received over the internet. It uses an IP-based architecture to convert analog voice signals into digital, and routes calls to a VoIP Solutions Provider that is responsible for initiating and terminating each call. 

Key Benefits of an IP PBX

There are seven key reasons why a growing number of organizations across all sectors — health care, manufacturing, legal, financial services, IT, retail, logistics, etc. — have made the switch from a conventional on-premises PBX to an IP PBX:

1. Significant Cost Savings

With an IP PBX, organizations do not have to purchase, maintain, upgrade, and eventually replace an on-premises PBX. This enables significant up-front (CapEx) and ongoing cost savings.

2. Scalability

An IP PBX scales as an organization grows. Adding employees to the system is easy and affordable, and there are no copper wires to install. All voice communications run on the data network that is already in place for internet access, email, and file transfers.  

3. No Vendor Lock-In

An IP PBX conforms to the universal and open SIP standard. Subsequently, this means organizations can freely use any SIP-compliant phone (including web-based “softphones”). This is not the case with most conventional PBX systems. These solutions often force organizations to use proprietary phones and other equipment. This limits choice and increases costs.

4. Control and Management

An IP PBX can be configured and managed through an easy-to-use web-based interface. Unlike proprietary on-premise PBX systems that typically have complex interfaces that can only be accessed and changed by outside technicians.

5. Unified Communications

As mentioned earlier, IP PBX combines voice and data on the same network. This enables organizations to access a range of enhanced unified communications (UC) features and functions, such as video, instant messaging, shared calendars, online faxing, and more.  

6. Total Mobility

With an IP PBX, employees can easily take advantage of “hot desking” (i.e. shifting between desks/workstations based on the task at hand). They simply remove their phone from the old location and plug it in at the new location. This works even if it’s in an entirely different building. There is no need for extensions or re-patching. In addition, employees can make/receive calls and access various collaboration features using a smartphone, or a desktop/laptop in their home office. This is ideal for organizations that have a remote/hybrid workforce.

7. Reporting and Analytics

An IP PBX provides organizations with reporting and analytics data. This allows decision-makers to optimize the system, identify training opportunities, enforce best practices, and ensure compliance. This business intelligence is especially valuable for call centers that need to monitor and meet performance standards.

IP PBX: Hosted or Cloud?

Finally, there are two types of IP PBX deployment models: hosted and cloud. In a hosted PBX model, the hardware that powers the phone system is housed by the VoIP Solutions Provider. But, in a cloud PBX model, hosted services are delivered via the internet.


Both of these deployment models deliver the advantages and benefits described above. However, a hosted IP PBX model is superior in a critically important area. The quality of service is uniformly reliable and consistently excellent. This is not necessarily the case with cloud IP PBX. This can be subject to degraded service caused by demand spikes (e.g. multiple employees participating in bandwidth-intensive video conferences at the same time). Additionally, it’s easier than ever to run out of allotted storage space when a large number of employees are using this solution.

Additionally, with respect to security, in a hosted IP PBX model the VoIP Solutions Provider can establish strong physical security at the data center, such as concrete barriers, security cameras, fences with barbed wire, and so on. 

The Bottom Line

An IP PBX delivers several significant advantages vs. a conventional on-premises PBX. A hosted deployment model is superior to a cloud deployment model with respect to the quality of service, storage, and security. 

Learn More

With over 20 years of experience, Carolina Digital Phone is a recognized hosted IP PBX leader. We ensure that our customers reap all of the benefits and advantages — from cutting costs to enhancing collaboration. Plus, we back our all-in-one system with the industry’s BEST LOCAL SERVICE! 

Schedule your free consultation and in-depth demo now. We can connect with you in-person at your location, or over-the-web. Call us now at (336) 544-4000.

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