In the past, when you call an office building or business, you would either be transferred to the department you want to talk to, or given their extension number. This extension is usually a 2-3 digit code that when dialed, transfers you automatically to the particular person or department you want to speak with. The reason why this code works is because it is programmed into a PBX system.
So what are PBX systems, then? PBX stands for public branch exchange, and is essentially a big telephone switchboard used for commercial or business purposes. It is wired in such a way that it can transfer calls or be programmed to recognize extension numbers. Traditionally, business telephone systems like this were kept in the basement under lock and key, but as time passes and technology keeps getting better, things change.
The type of PBX that is most commonly recognized as the best is known as IP PBX, or internet protocol public branch exchange. This differs from traditional PBX systems in that it is done entirely by software—there is no hardware besides the phones and telephone lines themselves required to power the system. This has lead to huge advances in the PBX industry, and has even spawned open-source free PBX programs for use by anybody.
What is hosted PBX?
There are two major types of IP PBX, hosted, and non-hosted. Non-hosted PBX is something that needs to be powered by a computer in the business's building. Naturally this requires you to maintain and manage the system in house, and can incur some extra costs because of this. This option is usually better for really small or really large businesses. Examples of a non-hosted PBX system include Panasonic PBX devices and software, along with NEC PBX.
PBX that is hosted by another company is widely used for mid to large businesses. The main reason for this use is because of the fact that these businesses often have a lot on their plate. Having to manage PBX in house is something that a lot of companies simply do not want to do. Luckily, hosted PBX allows you to sit back and relax while another company manages the software for you. You're simply a phone call away from fixing problems and implementing upgrades, and for some businesses, this can be the difference between frustration and prosperity!