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PBX vs. VoIP: Why are PBX's Becoming VoIP-Based?

Traditional phone systems sometimes referred to as TDM (Time Division Multiplexers) or PBX (Private Branch Exchanges), have come a long way. They have morphed into a digital delivery of voice communications and multimedia sessions known as VoIP (Voice over Internet Protocol) networks. Industry experts say two growing trends are the elimination of hardware and transformation of IP communications to be more application-oriented.

If you’re a business still using analog phones with a dial tone, you’re far from alone. Many are using a hybrid model, PBXs that incorporate both analog and VoIP endpoints to reduce cost. A cloud PBX may be able to support a hybrid cloud model with analog terminal adapters (ATA’s).

“Even if companies are buying IP PBXs for new employees or executives, they’ll maintain a lot of the old [analog] phones, so there still is quite a large installed base,” says Diane Myers, principal analyst at research firm Infonetics. “I know anecdotally from talking to vendors that there are still a lot of analog PBXs being used.”



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Myers said the software application driven features of VoIP are the biggest advantage over TDM. Using analog systems, users can’t benefit from features like call blast or simultaneous ringing. An IP phone can be programmed to ring on a cell phone when an external call is received, but route to voicemail for other calls. Another popular feature is receiving voicemail transcribed in an email or text message. Users can also video chat in VoIP in a softphone client on a desk or video phone without the need for a complex telepresence system.

And, voice can be integrated with other business applications. For example, a salesperson connects their phone to a customer relationship management system and can access their notes from previous conversations when talking to a customer.

VoIP for business is becoming more application-based, transitioning from hardware systems to software that is leased in a cloud model.

“Think about VoIP as an application, rather than a piece of equipment, if you don’t have the data center infrastructure but a cloud available to lease space from,” said Haskins. “It’s a huge change in turn up timeframes and disaster recovery.”

An IP-based PBX service can view the user from anywhere based on IP protocols, so the user has a virtualized experience and distributed voice calls. An IP service associates a user with a phone number and can register any number of devices.

“As far as the PBX is concerned they just need to know who you are and where to send the application,” said Haskins. “It’s a huge benefit to take your phone with you and work from home or an airport.”


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IP-based PBX systems are ideal for any kind of company, especially if it is distributed, Haskins and Myers said. VoIP can also save money: if a company pays for TDM circuits for the PBX to plug into, they incur on-going maintenance costs.

Hosted VoIP allows you to minimize PBX hardware and eliminates the need to maintain idle telecom circuit capacity. A PBX with VoIP means that other apps can interact with it in the same service. A cloud-based PBX takes this concept yet further, removing the central hardware infrastructure from the premise and leaving behind a small footprint of VoIP phones and adapters, and providing a standard API for application access.

“It’s evolving PBX past voice,” said Haskins. “Now that it’s an app, I can view it in multiple ways to communicate: instant messaging, data sharing, video and voice. The universe explodes and you can get very creative here.”


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A business that desire to upgrade their communications may be in an old building without the proper wiring, said Myers.

“Most businesses have Ethernet cabling now, but if they didn’t, you wouldn’t be able to have an IP phone and would have to keep supporting analog phones,” she said.

To understand where the technology is going, it’s helpful to see where it’s been and to examine the business implications of using it. The analog PBX/TDM system does one thing: sending voice from point A to point B. That’s because it has the advantage of a fully controlled ecosystem –communication protocols, devices, and networks are purpose-built to deliver a guaranteed, high-quality voice call, says Bill Haskins, senior analyst at unified communications firm Wainhouse Research.

“Moving to VoIP means you must look at your data network with a different eye,” said Haskin.

Enterprises have generally done a good job at building excellent data networks, he says, but enterprises should assess their network when adopting a VoIP solution.



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